The amount added to the hammer price to determine the total purchase price. The buyer’s premium is often a percentage of the high bid, added to that bid to determine the final contract (purchase) price.
Understanding the Math
A property is being sold with a Buyer’s Premium of 10% or $1,000, whichever is greater. The starting bid is $5,000. Below are three scenarios that show the auction’s results and the total contact sales price. In each scenario, the Buyer’s Premium is being added to the Purchase Price (Hammer Price). It is important to note that the property is still being sold subject to the terms of sale, including any additional costs or fees the buyer may be responsible for.
|Winning Bid||Buyer’s Premium||Total Purchase Price|