Full Glossary
Pricing & Fees

Reserve Price

The minimum price a seller will accept for an item at auction. If bidding does not reach the reserve, the lot 'passes' — it does not sell. Reserve prices are confidential (not disclosed to bidders). The opposite is a no-reserve or absolute auction.

How It Works in Practice

Reserves protect sellers but create a trade-off: lots with reserves attract fewer bidders because the outcome is uncertain (the item may not sell even if they bid). Most estate auctioneers prefer no-reserve sales for general household goods and only set reserves on the top high-value items. When using reserves, set them at 50–70% of estimated value — high enough to protect against a bad day, low enough to allow competitive bidding. The reserve should never equal the estimated value.

Frequently Asked Questions

What happens if the reserve price isn't met?
The lot 'passes' — it does not sell. The auctioneer announces 'passed' or 'not sold.' The item typically returns to the consignor, though some agreements allow the auction house to re-offer the item at a reduced reserve or in a future sale. Consignors should understand this risk when setting reserves, and auctioneers should counsel consignors on realistic reserve levels.
How should I set reserve prices?
Set reserves at 50–70% of estimated market value. This protects against catastrophic underperformance while allowing competitive bidding to drive the price up. Never set a reserve at 100% of estimated value — this virtually guarantees the lot will pass. For estate auctions, use reserves sparingly (top 5–10 items only) and run the remainder no-reserve to maximize bidder participation.

Related Terms

No ReserveHammer PriceBuyer's PremiumFair Market Value
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