A live bid, in auction terminology, is a bid placed during the active running of an auction sale, as the auctioneer is taking bids on a lot, rather than as an advance or absentee bid placed before the sale begins. Live bids may be placed in person from the saleroom floor, by telephone through a clerk who is in two-way contact with the bidder, or through an online live-bidding platform that mirrors the saleroom floor in real time and allows remote bidders to participate as the bidding progresses.

Mechanics

The auctioneer opens each lot at a starting price, typically below the low estimate or at any binding absentee bid that the auction house holds at a higher level. The auctioneer takes increasing bids from the available channels - floor, telephone, online live, and the auction house's order book - and announces them in real time. Increment levels are at the auctioneer's discretion within the typical scale; for major jewellery sales the increments are often 5 or 10 per cent of the current bid level. The auctioneer continues taking bids until there are no further raises, at which point the lot is hammered down to the highest bidder.

Distinguished from absentee and order bids

An absentee bid, also called a commission bid or order bid, is a maximum bid lodged with the auction house in advance of the sale; the auctioneer bids on the absentee bidder's behalf up to the maximum, but only as needed to maintain the lead position. Live bids respond in real time to the bidding pattern; absentee bids do not. A successful live bid implies that the live bidder has overtopped any absentee bids in the book at the relevant level.

Buyer's premium

The hammer price established by the live bid is not the final cost to the buyer. The auction house's buyer's premium, typically between 20 and 28 per cent of hammer for major jewellery sales, is added to the hammer to produce the total price payable. Local sales taxes, import duties and shipping costs are then added on top, and these can be material for cross-border purchases. A bidder considering a live bid should have a clear understanding of the all-in cost at the limit they are prepared to set.

Online live bidding

The growth of online live bidding platforms over the past two decades has substantially expanded the live-bidder pool at major auctions. The major auction houses run their own platforms, and aggregators such as Invaluable, LiveAuctioneers, the Saleroom and Bidsquare carry many auctions from many houses on a unified interface. Online live bidders should ensure they are registered and approved for the specific sale, that they have set up payment, and that they understand the platform's bidding lag, which is typically a fraction of a second but can affect outcomes in fast-moving lots.