A few weeks ago, I was at the Annex sale at Michaan's Auction. It is a monthly auction that runs for 2 days and has everything from jewelry to household furniture and contents (pots and pans) to collectibles.
I overhead a few people talking while looking at things, wondering how much items might sell for. I thought to myself, well, that depends. Often within their estimate, but if they are better than average, perhaps more, or not so interesting, perhaps less.
A little while later I went to look up something in the catalog only to see there were no estimates, which made me understand why the people I saw earlier were discussing values.
People truly look to the auction house to determine what price they are expected to pay (and the value) for the items they are interested in.
So what does this mean when there are no estimates? It means the item will sell for whatever someone is willing to pay that day. It lets bidders know item has no reserve and if someone bids $5 and no one bids against them, it will sell for $5.
In situations such as this, the auctioneer has to make a very quick decision as to what he or she thinks the item should sell for. For example, if they think the item is worth $100, they might open the bidding at $50, or half of whatever the value is. If they have no interested bidders at $50, they might ask for $40... eventually people start bidding, or the auctioneer will opt to pass the item and move on to the next lot.
Another thing to question at any auction is "What is the condition?" People often assume if there is no mention of an item having damage or restoration, it must be in excellent condition. This is not the case. Many auction houses do not place condition information in their catalogs. You need to ask. Request a condition report, or view the item in person before bidding. I know I have attended auctions where I previewed only the items I was interested in, only to have other items selling with low or no bids and I think "Wow, I should bid on that." Upon receipt of the item I then notice why no one was bidding!
A final thing to mention: payment. In some instances, if you plan on paying with a check, you might find the auction house keeping the merchandise until the check clears. If you do not have prior experience buying at that auction, and have not received pre-approved credit -- you will need to pay with cash if you intend to leave with the merchandise that day.
Auctions can be exceptionally exciting to attend online or live. Just make sure you have "all" the important information in hand before your paddle goes up!