Why Sell at Auction
Auctions are the most unique and valuable way of selling almost any type of personal property. Some of the most popular auctions are those that involve household items, or livestock or antiques. But auctions involve so many more possessions: automobiles, office equipment, art, machinery, industrial equipment, electronics. One very rapidly growing area is real estate. More and more people are buying and selling their homes and land by the auction method.
People are Flocking to Auctions
Auctions are one of the oldest forms of selling property; their history spans centuries. And time has only increased their popularity. A research study commissioned by the National Auctioneers Association shows that auctioneering is an industry on the rise.
- 83% think auctions are an exciting way to get good deals
- 51% think they offer a great value on items
- 65% think auctions offer exciting items they wouldn’t otherwise purchase
- 53% like the excitement of getting a good price
The Value of Selling at Auction
So how can auctions benefit you, as a seller? Why are they the best way to sell property? Well, there are a number of reasons
- Speedy Process, Quick Turnaround.
An auction is immediate. It happens during a set time and is completed during that time. It’s quick and efficient.
- You Set the Time and Place of Your Sale.
It’s as simple as that. You work with the auction firm to schedule what works best for you.
- You Know Exactly When Your Property or Goods Will Be Sold.
There’s no wondering whether or not your property will sell. It WILL sell and it will sell during the set auction time.
- Comprehensive Marketing of Your Property.
Part of conducting an auction is marketing it to the general public to get as many people there as possible. Auctioneers have comprehensive mailing lists they use to market their sales. They run advertisements, distribute fliers and more. They are marketing specialists. A good marketing effort can easily bring 300 to 400 people to your auction, or more!
- Buyers Come Prepared to Buy.
Auction goers come with money in their wallets, pockets and hands and are prepared to come home with property. It’s a seller’s delight. For real estate auctions this is especially advantageous because buyers must qualify to buy through a deposit of a certified or cashier’s check.
- No Negotiations.
There is no haggling over price or merchandise. The auction method is quick and efficient. When people bid, they make a commitment to buy the property at that price without discussion or debate.
- No Leftovers and Little Clean Up.
Every item at an auction goes up for bid and every item is sold. How many of you have ever had a garage sale and when you’re finished, you spend hours packing up what didn’t sell and looking for places to store it? With an auction, there’s no worry about what to do with leftover items because there aren’t any. This means very little clean up, also.
- Competitive Bidding.
Auctions motivate buyers to perform. People get caught up in the competitiveness of the bidding and many times this drives the price of items higher. To some it’s like a game, and they want to win at all costs (or hopefully for you, at high costs!) And did you know that 9 times out of 10, an auction brings in the fair market value, if not more, for any item put across the auction block?
- Exciting Atmosphere.
There’s no more exciting atmosphere than an auction. Crowds of people competing for property, combined with that lively auction chant makes for some great entertainment and fun. (Give them a sample of your chant.) It makes people feel good and makes them feel like spending.
- Auctions Work Well in Both Good and Bad Economic Times.
People love auctions, because they love sales. Statistics show, in a good or bad economy auctions remain a steady force. When the economy is bad, the auction industry does not feel the impact: people still flock to auctions.
Hiring an Auction Company
When you make the decision to sell by auction, the most important thing you must do is hire a qualified and experienced auctioneer or auction company to handle your auction.
- Ask about their contract or written proposal to provide you services. Get details on what is involved.
- Find out how the sale will be marketed. The success of the sale depends a great deal on the marketing effort behind it.
- Ask about setup and cleanup of the auction.
- Ask for references. And when you get them, check them out!
It seems that auctions have touched almost every century, every industry and every nationality. Auctions date back so far in history, that no one really knows for sure how they started or who started them.
The First Auctions
Records handed down from ancient Greek scribes document auctions occurring as far back as 500 B.C. At that time, women were auctioned off as wives. And, in fact, it was considered illegal to allow a daughter to be “sold” outside the auction method.
Auctions Come to America
American auctions date back to the Pilgrims’ arrival on America’s Eastern Shores in the 1600s and continued in popularity during colonization with the sale of crops, imports, clapboard, livestock, tools, tobacco, slaves and even entire farms. Selling at auction was the fastest and most efficient means to convert assets into cash.
Civil War Era
Have you ever heard an auctioneer referred to as “Colonel?” It’s a fairly common practice, especially at auction schools across the country. This came about during the Civil War era, a time when auctions were beginning to flourish.
Other Names for Auctioneers
Colonel is only one name that auctioneers have been identified with over the years. Other names include “Knights of the Hammer,” and “Brothers”.” The tools of these auctioneers included the Colonel style hat, a cane, bell, hammer or gavel, and a red flag. The flag, often boasting advertising, was placed above where the auctioneer would sell on the day of the auction.
Opening of Auctions Schools
Many auction schools started in the early 1900s in America. The Jones’ National School of Auctioneering and Oratory was believed to be the first. It was started by auctioneer Carey M. Jones in Davenport, Iowa. For the first term, the school promoted “competent instructors teaching general merchandise, real estate and fine stock auctioneering.” However, many auctioneers at that time did not believe an auctioneer could be “trained.” They believed that auctioneering was a natural ability that you were born with.
Challenges for Auctioneers
Though finding goods to sell was not a problem in those days, auctioneers faced other challenges. There was no amplification system for their voices – no microphones as we know them today. So they had trouble both being heard, and keeping their voices intact.
The Great Depression
The growth of the auction industry remained until the Great Depression of 1929. Some auctioneers traveled the country to liquidate the estates of farmers whose farms had failed because of drought and bank foreclosures. The decline of the auction method of marketing followed the poor economic climate and did not rebound until after World War II.
Auctioneering began to make great strides after World War II. The sale of goods and real estate was booming. There was a need in certain cases to move real estate and personal property faster than the private market would allow. Thus, the modern day auction business was born. Auctioneers were now businessmen who dressed in suits and ties. They began to nurture the business and raise the reputation of auctioneers. Besides the public, auctioneers began to have links to banks, attorneys, accountants, the court system and government agencies.
The 1990s through Today
During the 1990s, technology was finding its way into the auction business. Auctioneers were using computers, fax machines, cell phones and other technology to make their businesses run faster and more smoothly. Some auctioneers began taking photographs of small auction items and projecting them onto big screens so the crowds could get a closer look at the merchandise.
The Future of Auctioneering
Over the years auctioneering has progressed and changed, and today it remains more popular than ever. Most everything thinkable has been sold by the auction method of marketing: antiques, household items, automobiles, land, livestock, homes, designer dresses, business equipment, and more. And thanks to professional organizations like the National Auctioneers Association, auctioneers are privy to countless educational opportunities that help them to keep up on the latest technology and learn new business traits. They network with other auctioneers to exchange ideas and to find ways to continue to meet the growing needs of the American public.
Auctioneers today are working to earn specialty designations such as Graduate Personal Property Appraiser (GPPA) , Accredited Auctioneer Real Estate (AARE), Certified Auctioneers Institute (CAI) and Certified Estate Specialist (CES). (Tell about any designations you have or classes you have taken.)
NAA auctioneers are also bound by a code of ethics that protects consumers against fraud and unfair business practices.
A few suggestions to help you not only bid successfully, but to enjoy the auction experience. Pack the items you’ll need before you leave for the auction. Some suggestions:
- A small flashlight to check details on anything you’re thinking about bidding on
- A pen and paper
- A value book
- Identification, checkbook, and your seller’s ID if you are buying for a business.
How Auctions Work
When you arrive at the auction site you may need to register with the auctioneers in order to obtain a bidding number, the information required is usually your name and address and you may also need to pay a returnable deposit. You should be familiar with the registration requirements for the particular auction before you arrive in case a large deposit is required. If you have not viewed the lots for auction prior to the auction day you will need to allow yourself time to inspect your prospective purchases before the auction starts if this is allowed, some auctions may not allow you to view the lots other than in the specified viewing dates and times, with some “catalogue” auctions you may not be allowed to view the lots after the auction has started. You should confirm these details with the auctioneers prior to the auction date. When a lot you are interested in bidding on comes up for sale the auctioneer will announce the lot number ( either found in the catalogue next to the item or placed on the item during the viewing period ) and give a brief description of the item usually tied to the description given in the catalogue. A starting bid will be suggested by the auctioneer and usually bidding will start below this price so do not assume the auctioneers starting bid is the lowest price available. If the item has a reserve price the auctioneer will often start the bidding above this price and reduce the start bid towards the reserve price until a bid is made. The auction catalogue will usually display a guide price for the item which is above the items reserve price. You are free to start bidding at any time after the auctioneer has announced the starting bid. Some auctions especially liquidations, bankruptcies and receiverships have no reserve prices so give it a little time before you start your bidding, if there are no other bidders your first bid may be the price you pay. If similar lots are listed together in the catalogue and you are the buyer of the first lot you may then have the option to purchase the similar lots at the same price as the first. When bidding it is usual to get the auctioneers attention by raising your hand or making some other clear gesture to the auctioneer followed by the amount you wish to bid if different to the auctioneers announced price. Now you have started bidding the auctioneer will return to you every time the bid is against you to see if you wish to raise your offer, a clear shake of the head will indicate to the auctioneer that you do not wish to continue bidding Bids go up in steps controlled by the auctioneer and until the bid nears the assumed final price a bid of less than this amount will not usually be taken. If your bid is the final bid and the price reached is above the items reserve price you have been successful in your purchase. After you have won the bid you will have to pay an immediate deposit, the amount of deposit will be stated in the terms and conditions of the auction catalogue. The type of payment method i.e. cash, bank drafts, credit cards will be stipulated in the catalogue. The amount of time given to pay fully for the purchase and clear the goods from the auction house will also be given in the catalogue. Remember it is usual for the goods to be the responsibility of the purchaser after the hammer has fallen If the items for auction are large, heavy or difficult to move, representatives of removal companies will usually be present, but this is worth checking with the auctioneers before you make your purchase. (Information supplied by the National Auctioneers Association)
How to Buy at Auction
If you’re new to auctions, there’s nothing to fear. This step by step guide will show you just how easy it is to find, scout and participate in a live auction.
1. Find an auction
Use our auction locator to find an auction nearby. You can even search for a specific type of auction, if you’re just looking for antiques, dolls etc. 2. Preview the auction
Many auctions let you preview what is going on the auction block a few days—or even weeks—in advance. Once you’ve located the auction you want to attend, call the auctioneer or auction house to see if they will have a preview date. 3. Arrive early
On the day of the auction, try and get there early enough to register and get a good seat. It not only important for you to be able to see the auctioneer, but for the auctioneer to be able to see you. 4. Inspect
Carefully inspect any items you’re interested in. Are they damaged? Do you see other people looking at the same items? How much competition does it look like you’re up against? 5. Set a price
What are you willing to bid? You should have a number in mind, so you don’t go way over your budget in the heat of the moment. Don’t forget to include your total costs, like repairs, decorations, fees, and delivery charges. Use the bidder’s package you were given—if you were given one—at registration. 6. Bid
Have fun! Carefully follow the auction and get a feel for who you’re bidding against. And remember, the maximum bid you’re willing to make is just that; a maximum. Don’t jump to that number unless it’s necessary. You might very well get the item you want for much less. 7. Pay
If you win, find the Bookkeeper or Clerk and take care of your bill. You can also arrange for delivery at this time. 8. Enjoy
You just had fun and got a great deal. Now enjoy your new item(s)! (Information supplied by the National Auctioneers Association)