Hammer price and final price

What is the hammer price and what is the final price?

The hammer price is the sum at which the auctioneer's hammer falls and the work is sold. The final price is what the buyer actually pays: the hammer price with the buyer's premium, and possibly VAT, added. They are two different figures, even though they are closely connected.

How does the difference between them arise?

The difference arises because the auction house's commission, the premium, is added to the hammer price, and sometimes tax as well. And it is not a small difference: commonly tens of per cent. The figure you see fall in the room is therefore almost never the one that appears on the invoice.

Why does it matter to a collector?

Because it is how you plan what you will actually spend. Mistake the hammer price for the final price and you may frown considerably when it comes to paying. And likewise, when you read auction results in the papers or online, you should know which of the two figures is in front of you, or you will form a distorted picture of the market.

Can you give an example?

Imagine you win a work and the auctioneer's hammer falls at a certain sum. That is the hammer price, your winning bid. But the house's premium is then added to it, and only that total — the final price — is what actually leaves your account. With more expensive works the difference between the two figures can run into tens of millions.

What should you watch out for?

Above all, do not mix the two figures. When comparing what sold for how much, always compare like with like, final price with final price. And when bidding yourself, remember that your budget has to cover the final price, not only the one at which the hammer falls.

— Anna Pulkertová, founder of Art Part Club