The idea of buying and selling magical items has been a matter of contention for quite some time in 3.0/3.5 & Pathfinder as it contributes to 'de-mystifying' of magic in general.
The process for buying and/or selling magical items is typically handled quickly by the DM approving what items are available to the players as they peer through the Core and other books. Because of the awkward nature of purchasing magic in this mundane sort of shopping experience, most players and DMs want to just get it over with quickly so they can move on to the more exciting aspects of the game.
I'm considering adding a bit more zing to the magic item buying and selling process for my next campaign by adding interesting 'set-pieces' or locales that the PCs could go to when it comes time for them to do so. Places where PCs could pick up items could be: wizard towers, hedge witch huts, arcane academies, museums, guilds, temples, labs, etc. In fact some places may not even want the PC's coin but rather a service or quest.
I've just began to think on this and would like some help in suggesting other cool places that one could acquire magic items. Also, I'd appreciate any other input on how other DMs handle the buying/selling of magic items.
Thanks
Really cool concept. Magic auction seems like it could be cool. We play high magic games so this doesn't seem to be a problem, we treat magic items as being crafted for us when we order and a king would be stupid to not have a +3 clock of resist but the higher up items are the economy of a town so even kings pass them up for the cheaper stuff, but then again they aren't fighting dragons.
Another good system I've seen run is for the players to make a wish list and include the items in a hoard or as a reward for a quest as you mentioned.