A guaranteed lot is sold before the auctioneer opens the bidding. The house, or a third party acting through it, has already committed to buy the work at an agreed level if nobody else does.

What the guarantor is paid for

The guarantor takes the downside. If bidding stops at the guarantee, they own the work at that price. In exchange they usually receive a financing fee and a share of anything above the guaranteed level. That structure is closer to writing a put than to collecting art, and it is priced accordingly.

For the consignor, the guarantee converts an uncertain outcome into a floor at the cost of part of the upside. For the house, it protects the season headline numbers, which is how auction results are read by the next consignor.

What it means for an allocator

Read a guaranteed result differently from an open one. A work that sold at or very near its guarantee did not necessarily find a market. It found its guarantor. The useful signal is competitive bidding above the floor, and the catalogue tells you which lots carried a third party interest. Collectors who track this stop reading totals and start reading the margin between the guarantee and the hammer.