Auction houses make money from both sides of every deal. Sellers pay commissions. Buyers pay premiums. And over the past few decades, those buyer premiums have gone from single digits to 25% and climbing. Today, they’re going higher still.
Sotheby’s raised premiums effective February 2026. Christie’s did the same in September 2025. Six months apart, same direction, same logic.
When the two biggest houses in the world move together like this, it’s not a coincidence. It’s a signal that they’ve decided the market will absorb higher fees, and that they don’t need to compete on price to keep your business.
Understanding why this happened and what it means for you is more valuable than the numbers alone.
Table of Contents
Key Takeaways & The 5Ws
- Buyer premiums are rising again—and in sync. Sotheby’s (February 2026) and Christie’s (September 2025) both increased buyer fees, signaling confidence that collectors will absorb higher costs rather than shift platforms.
- Mid-market buyers are the primary target. Premiums of 27–28% now apply to works up to ~$1.5–2M, meaning a $1M hammer can carry $270k–$280k in fees—a material jump that disproportionately affects active collectors in the $500k–$2M range.
- Flat-fee experiments failed because seller economics dominate. Sotheby’s short-lived 20% flat premium (2024) collapsed after rivals used higher buyer fees to subsidize stronger seller guarantees, proving auction houses compete for consignments—not for buyer discounts.
- Financial engineering is reshaping incentives. Sotheby’s $900M securitization of its art loan portfolio signals a shift toward predictable cash flows and institutional capital markets logic—supporting higher, more stable fee extraction.
- Alternative models are emerging—but duopoly power remains. Phillips introduced discounted premiums for early binding bids, yet Sotheby’s and Christie’s still control the prestige evening-sale ecosystem where most trophy liquidity sits.
- Who is this for?
- Art collectors, investors, and advisors navigating rising auction house buyer premiums across major global houses.
- What is it?
- A structural shift in auction fee models, with premiums climbing toward 27–28% in the mid-market and auction houses experimenting with financial tools like securitization.
- When does it matter most?
- Fee increases accelerated in September 2025 (Christie’s) and February 2026 (Sotheby’s), marking a coordinated tightening after a multi-year art market slowdown.
- Where does it apply?
- Primarily impacts New York, London, Hong Kong, and Paris evening sales, where major houses dominate high-value art transactions.
- Why consider it?
- Because auction houses compete for top consignments and institutional capital—not for buyer loyalty—meaning higher premiums fund guarantees, stabilize revenue, and strengthen financial positioning, even if collectors ultimately bear the cost.
How Failed Experiments and Market Realities Drove Fee Increases
In April 2024, Sotheby’s tried something bold. They scrapped the tiered premium structure and introduced a flat 20% fee across all price levels. The idea made sense on paper. Simpler pricing, a competitive rate below what rivals charged on mid-market works, and a transparent structure that buyers could actually understand.
It didn’t last eight months.
By December 2024, CEO Charles Stewart acknowledged the flat fee had proven less attractive to sellers. Here’s why that matters. Sellers don’t care about hammer price in isolation. They care about what they walk away with after commissions.
When Sotheby’s lowered buyer premiums to 20%, competitors kept theirs higher and used that extra revenue to offer sellers better terms. More favorable commissions, stronger guarantees, more aggressive competition for high-value consignments. Sotheby’s was losing its best property to rivals who could subsidize seller incentives because buyers were paying more on the other side of the transaction.
So Sotheby’s reversed course. The new structure charges 28% on lots up to $2 million, higher than the previous 27% rate and applied across a wider range. Then 22% on lots between $2 million and $8 million, and 15% above that. Compare that to the abandoned flat 20% and you’re looking at a 40% increase on mid-market purchases. A $1 million hammer price that cost you $200,000 in premiums now costs $280,000. Christie’s landed in similar territory with 27% on lots up to $1.5 million and 22% on the band above that.
The targeting of mid-market works is deliberate. Works between $500,000 and $2 million held up relatively well during the three-year art market downturn. Collectors kept buying at this level even as eight-figure trophy pieces stalled.
That steady demand makes mid-market buyers the ideal target for a fee increase because you’re already committed to buying. You’re less likely to walk away than someone chasing a once-in-a-decade masterpiece who can simply wait.
The math adds up fast at scale. If you buy ten works a year at $1 million hammer each, you’re now paying $100,000 more annually in premiums than you were before. That’s not noise. That’s a meaningful shift that should change how you think about where and how you buy.
Securitization and Alternative Revenue Models
A few weeks before announcing the premium increases, Sotheby’s completed a $900 million securitization of its art loan portfolio. For the first time, collectible cars were included alongside artworks in the package sold to outside investors. The timing is not coincidental.
Securitization works by pooling existing loans and selling the expected cash flows to investors who want steady returns. Sotheby’s gets capital upfront instead of waiting years for borrowers to repay. But to make this work, the underlying company needs stable, predictable revenue. Investors buying structured securities need to trust that the cash flows are reliable. Higher buyer premiums flowing directly to Sotheby’s bottom line strengthen that case and support the credit ratings that determine how cheaply the house can borrow.
The offering was significantly oversubscribed, meaning more investors wanted in than there were securities available. That’s institutional validation that art functions as legitimate financial collateral, which is good news for collectors who think of their collections as assets. But it also signals something about where auction house priorities are heading.
When a house securitizes its loan book, it captures value upfront and reduces its long-term incentive to maintain deep borrower relationships. Combined with higher premiums, this points toward a model that extracts more from you in the short term rather than building loyalty over decades.
Not every house is moving in the same direction. Phillips launched an alternative in September 2025 that rewards buyers who submit binding written bids 48 hours before auction at the minimum low estimate. The fees are significantly lower for these early commitments. If you’re confident about a lot and would bid aggressively regardless of competition, you give up flexibility in exchange for meaningful savings. Phillips gets guaranteed participation and a price floor before the room opens. You get lower fees. Both sides benefit.
Whether this pressures Sotheby’s and Christie’s to follow is uncertain. The duopoly enjoys market power that Phillips simply doesn’t have, which reduces how much competitive pressure they actually feel. But if Phillips starts pulling serious buyers away from major evening sales, larger houses may respond.
That creates leverage for you. When you’re active across multiple houses, Phillips’ model becomes a reference point in conversations about what you’re willing to pay and what alternatives you have.
The bigger picture is that auction house fee structures are in a period of genuine experimentation after decades of one-directional increases. Sotheby’s tried and abandoned a flat fee. Christie’s pushed premiums higher in a parallel move. Phillips is competing on innovation rather than prestige. And the securitization trend suggests houses are thinking more like financial institutions than cultural institutions. You should expect further changes in the years ahead, and you should be building an acquisition strategy that accounts for that.
The practical response is straightforward. Private sales arranged through auction house specialists typically carry negotiable fees well below published buyer premiums, often in the 10% to 15% range for total transaction costs. Gallery purchases eliminate buyer premiums altogether, though dealer markups can offset that advantage if you’re not careful. Direct collector-to-collector transactions through advisors offer another route, requiring more effort but avoiding institutional fee extraction entirely.
The smartest approach treats auction houses as one channel rather than your default. Reserve public bidding for pieces where the global competition and visibility justify the cost. Build the rest of your collection through private sales, galleries, and direct relationships where the economics work more in your favor. And use the fact that you have options as leverage whenever you’re negotiating. Houses want your business. The more clearly you understand the fee landscape, the better positioned you are to make them compete for it.
