I have never been to an auction, but have seen plenty on tv. Those programmes where people get items valued and then sell them do confuse me.
Here’s an example: the person brings in an item and the expert waxes lyrical about it. “It’s worth £120 of anyone’s money.”
So, they put it into auction with a valuation of £80 to £120.
Then they set a reserve, an amount below which the item will not sell. This has to be below the bottom estimate, and since they probably go up in £10 increments, it will be £70.
This comes with auctioneer’s discretion, 10%. That is, if it gets within 10% under it will still be sold, bringing it down to £63.
The seller has to pay the auction house, maybe 18%, so it’s down to under £52. They also pay 20% VAT on this, another £2.27 off.
£49.39 is all you get for a £120 item.