What is a "buyer's premium" in auction terminology?

A "buyer's premium" refers to the additional fee that a buyer must pay on top of the final bid price of an item at an auction. This fee is typically a percentage of the winning bid and is intended to compensate the auction house for its services. The premium is added to the final bid, making the total amount due higher than the bid itself.

Understanding the buyer's premium is crucial for participants in an auction, as it impacts the total cost of acquiring an item. When bidders are prepared for this extra cost, they can more accurately assess their bids and budget accordingly. This practice is common across many auction houses and serves as a means of transparency, allowing buyers to understand the total fees involved in the purchasing process.