Why is the pre-auction estimate considered important?

The pre-auction estimate is vital because it provides potential bidders with an indication of the item's expected value before the bidding process begins. This estimate serves as a benchmark or reference point, allowing bidders to gauge how much they might need to bid in order to secure the item. It helps them make informed decisions based on their budgets and the perceived value of the item in relation to other items being auctioned. By understanding the pre-auction estimate, bidders can strategize and determine their own maximum bids, increasing the likelihood of a competitive bidding environment.

While determining the starting bid, setting limits, and establishing reserve prices are important functions in an auction, they do not offer the same foundational guidance that a pre-auction estimate provides to potential bidders in assessing value and making informed bids.