Estimates, Reserves and What a Work Is Worth
Estimate vs. Reserve vs. Hammer Price: Three Numbers Collectors Confuse
Three prices govern every lot in a contemporary art sale, and only one of them is printed in the catalogue: the published estimate range, the confidential reserve agreed with the consignor, and the hammer the auctioneer finally accepts.
Three prices govern every lot in a contemporary art sale, and only one is printed in the catalogue. The estimate vs. reserve vs. hammer price sequence runs from a published guide range, through a confidential minimum agreed with the consignor, to the figure the auctioneer accepts when bidding stops. Christie's Conditions of Sale set the rule binding the first two: "The reserve cannot be more than the lot's low estimate." Orley Ashenfelter, Kathryn Graddy and Margaret Stevens, writing for the Princeton University Department of Economics in October 2000, measured that secret reserve at 70% to 80% of the low estimate on average. Only the third figure is produced by bidders, and it still excludes the buyer's premium.
Key takeaways:
- The estimate is public and non binding. Christie's bases it on condition, rarity, quality, provenance and "prices recently paid at auction for similar property", premium and taxes excluded.
- The reserve is confidential and cannot exceed the low estimate. Princeton economists measured it at 70% to 80% of that figure; Martin Gammon of Pergamon Art Group puts the band at 50% to 100%.
- The hammer price forms the contract of sale between seller and successful bidder. It excludes the premium: 28% at Sotheby's New York on hammers up to $2m since 13 February 2026, a flat 20% at LLB Auction.
- Failing to clear the reserve is ordinary. Artprice recorded a 32% unsold rate across global fine art auctions in 2025.
Estimate vs. Reserve vs. Hammer Price: the three numbers at a glance
Each figure in the estimate vs. reserve vs. hammer price sequence has a different author, a different degree of visibility, and a different function in deciding whether a lot sells.
| Number | Who sets it | Visible to bidders | What it decides |
|---|---|---|---|
| Estimate | The specialist, negotiating with the consignor | Published in the catalogue | The range the market is invited to anchor on |
| Reserve | The consignor, inside a ceiling the house imposes | Confidential | Whether the lot sells at all |
| Hammer price | The bidders | Announced when the lot closes | The contract price, before premium and taxes |
The first two are agreed before the catalogue goes live. Bidding produces only the third.
How the estimate range is set, and by whom
An estimate is a published range, a low and a high figure, that the auction house believes a lot is reasonably likely to fetch at hammer. Christie's Conditions of Sale add that estimates can change and that nobody may rely on them as a prediction of the selling price.
Six inputs shape the range a specialist finally publishes:
- Condition. The written condition report governs; LLB Auction issues a three page report on every lot.
- Rarity and quality within the artist's output. Position in a series, scale, medium and date each move the figures.
- Provenance and exhibition history. Documented ownership narrows the discount a cautious bidder applies.
- Comparable sales. The MutualArt price database carries manually verified results for more than 969,000 artists across two decades; Artnet Analytics and the Artprice indices serve the same purpose.
- The consignor's expectations. Martin Gammon, founder of Pergamon Art Group and author of Deaccessioning and its Discontents (MIT Press, 2018), describes estimates as "set by auction house specialists in negotiation with consignors" and as "a marketing tool that is often loosely tethered to this intuition of fair market value".
- Competition for the consignment. When several houses pursue the same work the published range rises, and Gammon notes that an inflated estimate "will often asphyxiate demand".
One prediction can be published three ways: Gammon's illustration expresses an expected hammer near $100,000 as $70,000 to $90,000, as $80,000 to $120,000, or as $120,000 to $180,000. The full mechanics sit in what a contemporary work is really worth, and how an estimate is built.
Who controls the reserve
The reserve is the confidential minimum below which the consignor has instructed the house not to sell. Control sits with the consignor, inside a ceiling the house imposes. Christie's Conditions of Sale state it plainly: "Unless otherwise indicated, all lots are subject to a reserve... The reserve cannot be more than the lot's low estimate."
Where inside that ceiling the reserve sits is the negotiation. Ashenfelter, Graddy and Stevens modelled it as a constant proportion of the estimated price and measured 70% to 80% of the low estimate across impressionist and contemporary sales. Gammon puts the practical band at 50% to 100%, the upper end reserved for consignors who accept the risk of a bought in lot.
Two mechanics follow from that ceiling. The auctioneer may bid on the seller's behalf "up to but not including the amount of the reserve", and makes no bid at or above it. On a lot offered without reserve, Christie's opens the bidding at around 50% of the low estimate, which explains most opening bids landing far below the catalogue range.
How the hammer relates to both
The hammer price is the last bid the auctioneer accepts. Christie's states the effect: "when the auctioneer's hammer strikes, we have accepted the last bid. This means a contract for sale has been formed between the seller and the successful bidder." The lot clears when bidding reaches the reserve, and is bought in when it stops beneath.
A worked example on a mid market contemporary lot shows the sequence. A work catalogued at €12,000 to €18,000 carries, at the Princeton average of 75% of the lower figure, a reserve near €9,000. Bidding closes at €14,500, above that reserve, so the lot sells. At LLB Auction's flat 20% buyer's premium the invoice reads €17,400 before shipping and taxes, and the consignor, charged 10% commission, receives €13,050 before other costs. The same hammer under Sotheby's New York rate of 28% would invoice at €18,560.
The estimate vs. reserve vs. hammer price chain runs in one direction: the estimate caps the reserve, the reserve decides whether a hammer clears the sale, and the hammer records what bidders were prepared to pay. Artprice states that all prices quoted in its annual report refer to public auction results including buyer's premiums, so a published result and a published estimate are not measured on the same basis.
Where buyers misread estimate vs. reserve vs. hammer price
Four misreadings recur among experienced bidders.
A low estimate read as an appraisal. Gammon is direct: absent competitive pressure, specialists "would set them as low as reasonably possible to stimulate such demand". A range well under an artist's recent comparables works as a demand generating device at least as often as a discount, and the correction is to rebuild value independently, starting from how to find comparable sales for art.
A hammer beneath the catalogue range read as impossible. The reserve sets the selling floor, and in most negotiations it sits under the lower published figure by 20% to 30%.
A hammer read as the cost. Sotheby's states that "a buyer's premium is added to the hammer price of each lot offered and is payable by the buyer", at 28% on New York hammers up to $2m, 22% to $8m and 15% above. Artprice's 2025 figures, premiums included, put the average lot at $12,820.
An unsold lot read as a verdict on the work. A miscalibrated reserve accounts for a large share of the 32% that went unsold in 2025, which is one reason why two almost identical works sell for wildly different prices.
How LLB Auction sets and discloses each figure
LLB Auction publishes its fee structure before a catalogue opens and declines roughly 40% of submissions at intake, so an estimate here sits on a work that has already cleared a threshold.
Estimates built on documented evidence. Every lot carries a three page condition report and per lot due diligence on certificate verification, ownership history and conservation records.
Reserves agreed in writing. The seller's commission is 10%, disclosed upfront, with the reserve set inside the catalogue range and held confidential through the sale.
Costs stated before bidding opens. The buyer's premium is a flat 20%, with no hidden costs, across timed online sales of 7 to 14 days on llb-auction.com and Artsy.
The Contemporary Art Spring 2026 sale of 26 May 2026 offered 25 lots and sold 23, for roughly €39,480 in gross hammer, documented in the house's records and in Artsy's. Register at llb-auction.com for catalogues and estimates ahead of the next of the four sales committed for 2026.
FAQ: estimate, reserve and hammer price
Estimate vs. reserve vs. hammer price: which of the three is public?
Only the estimate. It is printed in the catalogue as a low and a high figure, and Christie's notes that it excludes the premium and applicable taxes. The reserve stays confidential through the sale, which is why Barnebys observes that opening bids are often set deliberately beneath it. The hammer becomes public when the lot closes, and Artprice and MutualArt then publish it with the premium included.
Can a lot sell beneath its low estimate?
Yes. The selling floor is the reserve, and Christie's rule states only that the reserve cannot be more than the lot's low estimate. Ashenfelter, Graddy and Stevens measured an average reserve of 70% to 80% of that figure, so a work catalogued at €12,000 to €18,000 can clear near €9,000 on terms both parties agreed.
Why is the reserve kept confidential?
Disclosure would turn the reserve into an opening price and remove the bidding that occurs beneath it. Christie's permits the auctioneer to bid for the seller "up to but not including the amount of the reserve", a mechanic that functions only while the figure stays undisclosed. A published minimum on an unsold lot also becomes a public ceiling for the next attempt.
Does the hammer price include the buyer's premium?
No. Sotheby's states that a buyer's premium is added to every lot's hammer and is payable by the buyer, at 28% in New York on hammers up to $2m since 13 February 2026, 22% between $2m and $8m, and 15% above $8m. Christie's has charged 27% up to $1.5m since September 2025. LLB Auction applies a flat 20%.
Conclusion
The three figures answer three different questions. The estimate is what the house is prepared to publish, the reserve what the consignor is prepared to accept, the hammer what the room actually paid. Christie's cap holds the first two in a fixed relation, the Princeton measurement puts the usual distance between them at 20% to 30% of the published lower figure, and the premium separates the third from what the buyer transfers. A collector who reads estimate vs. reserve vs. hammer price as one mechanism prices a lot before bidding rather than after the invoice arrives.
Also worth reading:
- What a contemporary work is really worth, and how an estimate is built
- Why two almost identical works sell for wildly different prices
- Comparable sales: how to find and read the right precedents
- Comment une oeuvre d'art est estimée, et ce qui fait sa valeur
Sources:
- Conditions of Sale : Christie's, 2018
- Sale Rates and Prices in Impressionist and Contemporary Art Auctions : Princeton University Department of Economics, 2000
- What Auction House Estimates Really Mean : Artsy, 2019
- The Art Market in 2025 : Artprice by Artmarket.com, 2026
- Sotheby's hikes buyer's premiums : The Art Newspaper, 2026
- What is a buyer's premium? : Sotheby's, 2026
- Fine art auction sales in 2025 : Artnet News, 2026
- Art Auction Price Database : MutualArt, 2026
