If a buyer's premium is charged at an auction, what must be done?

A buyer's premium is an additional fee that is added to the winning bid amount at an auction, typically expressed as a percentage of the final price. It is essential for this information to be clearly disclosed to potential buyers prior to the auction, and one effective way to ensure this transparency is by including the buyer's premium in the signed bidder contract.

Incorporating the buyer's premium into the contract helps to establish clear expectations, allowing bidders to understand the total cost they will incur if they win an item. This requirement promotes transparency and fairness in the auction process, as all participants are aware of additional costs before they place their bids. This disclosure is not merely an administrative formality; it safeguards the interests of both the auctioneer and the participants by preventing misunderstandings and disputes over auction costs.

While other options may touch on the buyer’s premium in various capacities, they do not fulfill the need for clarity and upfront disclosure that a signed contract provides.