The commonest and most expensive misunderstanding in the saleroom is that the number the auctioneer shouts is the number you pay. It is not, and the difference is not small.
What the hammer price is
The hammer price is the last bid accepted before the gavel falls. It is the figure on which the seller's commission is calculated and the figure quoted in every published result, including ours. It is a real and meaningful number — but it is a number about the sale, not about your bank balance.
The buyer's premium
Added to the hammer price and paid by the buyer to the house. Ours is 27 per cent on the first million dollars, 21 per cent on the portion between one and six million, and 15 per cent above that. The scale is regressive because the work of selling a $6,000,000 painting is not six times the work of selling a $1,000,000 one.
The arithmetic on a $45,000 hammer is straightforward: $45,000 plus 27 per cent, which is $12,150, giving $57,150 payable to the house. On a $1,600,000 hammer it is $1,000,000 at 27 per cent plus $600,000 at 21 per cent — $270,000 and $126,000 — giving $1,996,000, a blended rate of 24.75 per cent.
Every lot page on this site prints that working out in full and lets you change the hammer price to see it move. There is no reason for it to be a surprise on the invoice.
And then the rest
Sales tax, where it applies, is charged on the hammer price and the premium together — not on the hammer alone. In New York that is 8.875 per cent of the combined figure, which on our $45,000 example is a further $5,072. It may not apply if the property is shipped out of state by the house, or if you have lodged a resale certificate.
Then shipping, packing and insurance; then, on lots marked λ, an artist's resale royalty where the sale falls within a jurisdiction that levies one; then, on lots marked ‡, import duty if the property stays in the country.
The number to bid to
Work out what you are willing for the object to cost you, all in, and then work backwards to the hammer price that produces it. Divide by 1.27 and you have your ceiling. Write it down before the lot comes up, because the room is very good at moving it.