A reserve price is the confidential minimum figure, agreed between a seller and an auction house, below which a lot will not be sold. If bidding fails to reach the reserve, the auctioneer withdraws the lot and it is recorded as unsold, sometimes described as bought in or passed.
Reserves protect consignors from seeing valuable pieces go for far less than they are worth on a quiet sale day. In British practice the reserve is normally set at or below the lower printed estimate, and auctioneers may bid on the seller's behalf up to that level, a practice that should be explained in the saleroom's conditions of business. Lots offered without reserve will sell to the highest bidder whatever the figure, which can produce bargains but also attracts competitive bidding. Buyers should remember that the hammer price is not the full cost, as buyer's premium, VAT and any resale royalty are added on top. Sellers, meanwhile, should agree a realistic reserve with the specialist, because an unrealistically high one can leave a piece unsold and make it harder to place again once the market has seen it.
