C'DaleRider,
Any chance you've gotten anywhere on this? I've got two auctions that I want to hit this weekend, so any pointers would be appreciated!
Thanks,
-Brett.
Any chance you've gotten anywhere on this? I've got two auctions that I want to hit this weekend, so any pointers would be appreciated!
Thanks,
-Brett.
I think some auctions require certain things be met before you can even attend. Like auto auctions you might need a dealers license or something. I'm not sure about it but I know I read a lot about 'not open to the general public' so you need some kind of 'in' to even attend them. And then there usually is a minimum price set on items. You may not get a chance to see what the items are or if they work beforehand. Etc.
As said above, you may need ot carry out the items you purchase that day. You probably have to pay with cash. Etc.
I think some requie you to purchase a seat, in that you can't just go to it, you have to pay to get in.
This is from very limited research, but, I'd say the $30 room thing with $1000's of goods inside is a freak event and not something you are going to have happening very often. Keeping in mind that a Hurricane was coming through that day and it wasn't widely known about I'd say the conditions were just right for such an event.
Still, I'd like to find out more about auctions but I suspect it's not quite as rewarding as the above experience implies.
As said above, you may need ot carry out the items you purchase that day. You probably have to pay with cash. Etc.
I think some requie you to purchase a seat, in that you can't just go to it, you have to pay to get in.
This is from very limited research, but, I'd say the $30 room thing with $1000's of goods inside is a freak event and not something you are going to have happening very often. Keeping in mind that a Hurricane was coming through that day and it wasn't widely known about I'd say the conditions were just right for such an event.
Still, I'd like to find out more about auctions but I suspect it's not quite as rewarding as the above experience implies.
I am quite interested in this as well.
I've been meaning to check out some auctions. Actually been waiting for the city police to hold their auction....still waiting though....
I've been meaning to check out some auctions. Actually been waiting for the city police to hold their auction....still waiting though....
Originally posted by: RossMAN
Will someone please send a PM to C'DaleRider with this thread URL?
Thanks
Done, RossMAN.
OrganizedChaos
Diamond Member
- Apr 21, 2002
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If you wantr to put up an HTML page let me know and I would be happy to host it for you. (I never use all my bandwidth)
Sorry about the delay guys.........and I see there is a bit of interest in my "wisdom".....such as it may be. We got dumped on at work late last week. We're opening a new store next Monday, and the owners, who have known about this for MONTHS, just decided last Wednesday to set out the tasks/responsibilities for setting up the store. Needless to say, we've been under the gun and working a lot of hours to get the job done............damn cheap bastards they are. (A lot of what we're doing was outsourced before, so we're not completely equipped or experienced for doing this....we're all learning as we go along.)
The guide will be available sometime Monday if everything works like it should. I'll be writing it in Word....have little else to write in, outside Notepad and Wordpad. I do have a copy of Wordperfect, but I figured MS Word was much more widely used by more people around here. I'd transfer it to a PDF format, but don't have the appropriate software for that task.
Thanks for the interest and just hang in there for a couple more days. Hopefully what I present will be something all of you will find somewhat useful. I am writing this from two perspectives......both as a buyer, which I started out as, and as someone who has gained a bit of inside information....I have become good friends with a few auctioneers and have been given a good look at the "behind the scenes" goings-on at auctions. Believe me, I go to auctions with a little bit of a jaundiced eye now....
Thanks for the interest, and stay tuned!!!
Jeff ..... A *Confirmed* and *Official* auction addict!!!!!!
The guide will be available sometime Monday if everything works like it should. I'll be writing it in Word....have little else to write in, outside Notepad and Wordpad. I do have a copy of Wordperfect, but I figured MS Word was much more widely used by more people around here. I'd transfer it to a PDF format, but don't have the appropriate software for that task.
Thanks for the interest and just hang in there for a couple more days. Hopefully what I present will be something all of you will find somewhat useful. I am writing this from two perspectives......both as a buyer, which I started out as, and as someone who has gained a bit of inside information....I have become good friends with a few auctioneers and have been given a good look at the "behind the scenes" goings-on at auctions. Believe me, I go to auctions with a little bit of a jaundiced eye now....
Thanks for the interest, and stay tuned!!!
Jeff ..... A *Confirmed* and *Official* auction addict!!!!!!
Jeff?s UnOfficial Guide to Not Getting Too Screwed at Auctions
Hi. I?m Jeff, a self-confessed ?auction addict?, and this is my unofficial guide to buying at almost any type auction and not getting too screwed over at the end. While I do NOT claim to be any sort of expert of and about auctions, I have over 5 years of experience in going to auctions and have gained a bit of ?wisdom? about how to buy and sell at them. I have also over this time become good friends with a few auctioneers and have been privileged enough to be introduced to the goings-on behind the scenes at auctions. So this is my humble attempt to share what knowledge I have gleaned over the years with those interested in becoming a fellow ?auction addict?.
If you?re bothering to read this guide, you?ve probably either heard of or seen some sort of auction and the potential for deals you can get at them. Most of you are probably familiar with the collector auto auctions you?ve seen on television, like Jackson-Barrett, or the high-end type of antique auction like Southeby?s. While these are true auctions, they do not represent the full scope of auctions in the ?real? world. There are auctions for bankruptcies, household goods, storage unit foreclosures, antiques, estates, junk, automobiles, and on and on. Almost any good or commodity you can think of probably has and is being auctioned.
I?ll discuss types of auctions and what to expect to see at them, how to bid at auctions, why you pay what you pay, what to look for before the auction begins, what to watch for during the auction?s bidding process, and some simple ?rules? I?ve learned over the years. Unfortunately, I do like to talk, so I tend to ramble and am a little verbose. I?m going to go into detail on some things, so this guide may a little long for some people, and for that I apologize. Just bear with me and you WILL gain some good information.
So let?s first discuss a few of the types of auctions. You?re probably all familiar with auto auctions. You?ve heard of the ?great deals? someone got at an auto auction?a fantastic car at an unbelievable price. True, one can sometimes ?steal? a car for next to nothing at an auto auction. But, the true deals are only at the dealer-only auctions. These are the auto auctions where dealers sell to other dealers?ONLY!!! The general public is NOT permitted to these auctions. The requirements for attending this type of auction are pretty daunting, including the need for a reseller license in automobiles. In my state, to obtain an auto dealer?s license requires a few steps, including application to the appropriate licensing department of the state government, proving you are bonded for a minimum of $20,000 (usually done by obtaining bonding insurance from the appropriate insurance agency that specializes in this type of bonding insurance), a business license, a proven physical location for selling vehicles, among other requirements. These, and other requirements, have prevented many from getting into the ?real deal? auctions.
Instead, you?re left with the public auto auctions. You therefore must remember the autos at these auctions are the cast-offs from dealer lots in most cases. These are the cars that have been taken in on trade that have too many miles on them to sell on that dealer?s lot, or have too many things wrong with them to make it profitable for that dealer, or are too old for that lot. New car dealers typically won?t sell a used car on their lot if it?s over four or five years old. There are typically too many problems with getting that old a car up to new-car lot standards. Also you may find repossessions at these sorts of auctions. But if someone hasn?t taken the care to keep up payments on the vehicle, that person probably hasn?t taken much actual care of the vehicle, especially when that person knows the car is going to be repossessed. I tend to avoid auto auctions and try to deal with private owners when buying a vehicle if I?m looking for a great deal or buy from a new car lot if I?m looking for a good quality used car with some sort of warranty. So, with that, I?m leaving all further discussion of auto auctions.
With that said, let?s discuss the other types of auctions out there. First, livestock auctions. Livestock is just what it implies?the sale of any sort of animal. These can be ?domesticated? or ?exotic?. Domesticated can include cows, horses, pigs, ducks, chickens?any and all of the expected and unexpected barnyard varieties. Exotic can range from emus, ostrich, zebu, zebra, buffalo, and pheasant?almost any sort of animal/bird that exists. While there are practically no restrictions on who can purchase the domestic animals, there can be a few restrictions on the exotic animals including the need for the possession of an endangered species permit. My wife possesses such a license and they are not hard to obtain. We obtained this permit because we raised exotic pheasants many years ago, specializing in rare Indonesian species. This type of auction can be fun, but they are really only for specialists/farmers or the like. They can be quite interesting to attend because you never know what you?ll see being sold.
Bankruptcy auctions are exactly what the name implies. The goods are being sold to satisfy a bankruptcy, done typically under bankruptcy court order. At this type of sale, a representative of the court will be in attendance to observe the sale is carried out as ordered. He will neither interfere with the sale nor bid, but is there just as a court-appointed observer. Many times the plaintiff will also be in attendance but, again, his presence is irrelevant. At this type of auction, like a lot of auctions, the items are as-is/where-is and no guarantees on functionality, and items may have problems such as liens or contracts that existed prior to the sale. It is up to the buyer to determine if the item is free and clear of any encumbrances prior to bidding. This typically only comes up with automobiles and real estate, not physical goods like computers, desks, chairs, etc. You can get some whopping good deals at this type of auction but buyer beware?and I?ll discuss what to beware of in a later section.
You can find out about these types of auctions by word-of-mouth, flyers from the auctioneer hosting the sale, and advertisements in the LEGAL section of the classified ads in the local newspaper where the bankruptcy has been declared (by law, this type of sale must be advertised prior to being held and it is ONLY and ALWAYS advertised in the LEGAL section of the classifieds, not in the auction/general merchandise/for sale sections.) These sales are almost always held on?site, meaning at the location in which the person lived or business operated. The terms of the sale are almost always the same: cash or good check, items purchased must be taken away the day of the sale. Sometimes there will be an additional load-out day provided, but unless this is announced do not assume you can come back tomorrow to load your goods because they probably won?t be there then. If you attend such a sale, plan on loading everything you?ve purchased that day, rain or shine.
You can usually tell what you can expect to find at a bankruptcy auction by the type of business that went bankrupt. You wouldn?t expect to find farm implements being sold at a restaurant?s bankruptcy, nor would you expect to find tractors at a clothing store?s bankruptcy. A recent one we attended for the bankruptcy of the Savannah Symphony in Savannah, GA, had what one would expect from a typical office environment: desks, computers, printers, monitors, copiers, office supplies galore, chairs, and the like.
Akin to bankruptcy auctions are storage unit foreclosure sales. They occur quite frequently and you can find them advertised, again, in the legal section of your local newspaper. The rules for this type of auction are rather simple. They open a unit, you typically bid on the contents of the unit, and haul it off that day. Some of these sales require a modest deposit prior to your being able to bid?.sometimes around $100. This is to ensure you do take all the ?goods? off the property the day of the sale and you clean the unit after you?ve emptied it out. Some storage rental places will allow you rent a unit for a month to store your purchases, but most won?t. The goods are, again, sold as-is/where-is and no guarantee on anything.
Estate auctions are another type many people are familiar hearing about. They can be living estate or the estate of someone who has passed and the surviving family is disposing of the unwanted possessions. But not all is what it seems at estate auctions.
To start, auctioneers LOVE estate auctions. The reasons are many but include these: many people who?d never dream of attending an auction at an auction house/barn will be drawn to an estate auction like a moth to a flame. Also, prices tend to run higher at estate auctions vs. barn auctions?why, no one can explain. But this tends to hold true?.the prices goods get tend to be higher than at auction barns. (I use the term ?barn? as an encompassing term to reflect auctions held at auction houses/barns. In our area, most auctioneers call their places of auctions barns instead of houses, so I tend to use their terms. The term ?auction house? is usually reserved for the very high end of auction establishments, like Southeby?s.)
Because of these reasons, among others, much of what you may find at estate auctions does not come from that person?s estate. Instead, the auctioneer probably will include items from his barn. He does this because he anticipates higher prices for these goods and to attract more people to the auction. Many times we?ve attended estate sales and there is so much furniture, the house the person lived in could not possibly have contained it all. Also, the styles of the furniture will vary widely from the plebian to the antique. Now, it?s true many people collect furniture in varying styles and quality, but do you honestly think a 78 year old man would have a preteen girl?s white French Provincial-style bedroom set in his house? Probably not, and that?s the type item that?s been added to the auction to ?flesh it out?. Other things are antiques of much higher quality than the vast majority of the items for sale at the estate. You?d rarely find Tiffany lamps mixed with Rooms-To-Go furniture. So pay attention to what?s being sold?.there will be clues to what and if items have been added to the estate from other sources.
Then there are the auctions held at auction barns. They can range from household good auctions (where you can find anything and everything) to true antique auctions. Almost all are held on a regular schedule ranging from weekly to monthly. Special event sales can be mixed in like a gun or tool auction. The quality of the goods can vary widely so it can take going to these auctions several times before you learn what to expect to find and the quality to expect to obtain the goods offered for sale.
Now for my ?rules? of buying at auctions and what to watch for when bidding.
First, bid with your head, not your heart. I?ve seen too many people get caught up with the bidding and pay MUCH more than an item is worth or can be purchased for in a store locally. It happens all the time. So think before you bid. When you decide to bid on an item, determine your comfort level of spending on that item and try to stick to it. Don?t let ?auction fever? take hold of you?it does to many people, much to their chagrin later.
Second, don?t lose an item for a bid. Now this may seem to be contrary to the first rule, but many times another bid will get you the item. If the bid increment is at $2.50 or $5, one more bid from you will sometimes win you the item. When you set your limit of spending on an item, allow 10-15% above for an additional bid or two. That extra bid or two may win you that item.
Third, take advantage of the inspection period before the auction. Almost without exception, the auction will have an hour or two, or sometimes days prior to the auction, to examine the items for sale. LOOK CAREFULLY!!! Items like crystal, pottery, and other fragile items, may look at first glance like they?re in pristine condition only to reveal small chips, cracks or other defects upon closer examination.
Another thing about items and inspection?if it has a cord (electrical items) and it?s not plugged in and demonstrated to work, IT PROBABLY DOES NOT WORK. The only exception to this is if the auctioneer states he warrants the item for functionality and you have a right of return against it not working. So, if the item is not shown to work, it probably doesn?t. (I say this because I have made this mistake more than once?.much to my chagrin. There are also guys who will bid on anything with a cord?.working or not. If it has a cord, they bid.)
Fourth, never be the first bidder, just the last bidder. NEVER open the bidding at the first offered bid on an item. Typically the auctioneer will offer the item at an opening bid of what he thinks the item should ultimately be worth. Only an idiot will bid at that point. If there are no bidders at that offered bid, the auctioneer will drift down in his opening bid?and down, and down until someone bids. In some auctions, you can offer an opening bid?.it may be accepted, it may not.
But, if you want the item, do not bid first. You are showing your hand and interest to other potential bidders. This over eagerness to bid has been the downfall for many bidders. The winning way to bid is let the newbies and cheapies start the bidding. The price will bid upwards for a bit. Very shortly, the cheapie bidders will fall to the wayside and those who are intent upon winning are left. Now is the time to start your bidding. Waiting will let you see who is serious and who was just ?playing?. It also lets you determine if the item will stay in your comfort range of what you are willing to pay for the item. Many times there have been items I?ve been interested in only to watch it get bid through what I was willing to pay and see it go for more than what I could purchase the item from an antique store or retail establishment.
You must understand the bidding game. Between bidders, it is as much a contest of wills as it is money. For the auctioneer vs. the bidders, it?s a contest between attempting to garner as much for an item as he can drive the price up to vs. getting the item as cheaply as you possibly can. And you must understand who attends and bids on items. There are two groups of people?.collectors/average Joes and dealers. The dealers are buying for resale. They typically have a shop or sell online somewhere. Fortunately, if you are buying for yourself, you can easily outbid the dealers?.they can only afford to spend so much for an item before the profit margin disappears. Bidding against another collector/average Joe, on the other hand, can be a trying experience especially if ?bidder fever? has taken hold of that bidder. ?Auction? or ?bidder fever? strikes almost everyone at some time. Sometimes, it?s because you dearly want the item and you?ll be damned if this thing will escape you this time. Other times, the bidding war becomes so intense all rational thinking eludes you and your brain just shuts off?.only your arm works and it won?t quit raising your bidding number until the bitter end. Only when you leave do you finally realize how much you actually paid for the item?but then, it?s too late.
Then there is a third bidder that can be involved in the bidding. That person is the auctioneer himself. Yes, the auctioneer will bid on items himself. Sometimes, this is because not everything at these auctions is on consignment but is sometimes owned by the auctioneer. He bids to attempt to drive up the price to what he needs to sell the item to make a profit. Other times, especially at estate sales or bankruptcy sales, he?s attempting to purchase the item as you are?he?s going for resale potential while you?re buying for yourself.
Now, an honest auctioneer will tell you he or his staff will be occasionally bidding on items outright. A more unscrupulous auctioneer will not let you know he?s bidding against you. So how do you tell? Well, it will take going to that auctioneer?s sales a few times to tell if he?s bought the item. When a bidder wins, the item is assigned to the winner?s bidder number, the number you receive to use when you register at the auction?s beginning. Some auctions assign permanent numbers?you use the same number every time you go to that particular auctioneer?s sales. Other auctions assign you a different number every auction. But if you go to an auction repeatedly, you begin to know who has what number and the auctioneer WILL HAVE a permanent number. Sometimes, the auctioneer will change his number, but it only takes a little of the auction to realize what his number is for this auction.
Another tactic of unscrupulous auctioneers is taking phantom bids. He?ll act like there is someone in the rear of the room he?s taking bids from while there really is not. I?ve caught a few doing this and refuse to bid any longer. I also will never go back to that auctioneer?s sales no matter what he?s selling. I despise that practice and refuse to give my patronage to sellers who engage in this practice. I usually catch them in this by placing myself in the rear of the room when something comes up for bidding that I really want to buy. I move to the rear under the pretense of going to buy a Coke from the concession area that?s invariably in the rear of the barn. From this vantage point I can usually see who is bidding against me or if the auctioneer appears to be taking phantom bids. If it appears to me that phantom bidding is going on, I?ll immediately stop bidding and walk out.
The other reason I stand in back, as I said, is to watch the person(s) I am bidding against. You can many times tell the other bidder?s resolve by seeing how quickly they respond to a bid. If the other bidder is just holding his/her bidder number up and never dropping it as the bidding progresses, that person is VERY serious about winning the item. Holding one?s bidder number up and not dropping it indicates the person WANTS the item but is also doing this in an attempt to intimidate other bidders into giving up prematurely. Another bidding tactic is the opposing bidder comes back with a bid almost as fast as the auctioneer gets the next bid increment out of his mouth. No hesitation on the part of the bidder also indicates the person is still strong on the item and its price. A hesitation before the person responds to the next bid shows weakness in that person and their bid. The longer the hesitation before the person responds to the next bid, the weaker the person is on that item.
This is when the smart bidder BEGINS to bid?.when the bidding has stalled, the bidder is hesitating before making that next bid, and the item is about to be sold. Starting your bidding now may get that item for that bid. A new bidder coming in when the bidding has stalled shows the new bidder is in strong, at least for the moment, and many times forces out the ones who were already bidding hesitantly at this point. Sometimes it takes a couple of bids at this point, but if it?s an item I WANT, and the price is still fair, a couple of bids now usually takes it. Unfortunately, there are always a couple of people who understand this dynamic and sometimes a new bidding war erupts. Then it just comes down to what you are comfortable spending on the item.
This brings up another point?.what the item will really cost. There is almost always a buyer?s premium added to the winning bid of the item. Around here, the buyer?s premium runs 10%. So, if I win an item and the winning bid was $100, a $10 buyer?s premium is added to that winning bid, making the item?s true cost $110 before sales tax?and unless you have a tax-exempt number, you get charged sales tax on everything you buy. The tax is computed after the buyer?s premium is added. It is a truly rare auction that does not have a buyer?s premium, although they do exist.
The buyer?s premium is one of the two ways the auctioneer makes money from conducting an auction. The other way is the seller?s premium. This is the percentage the auctioneer charges the seller of the item and is also based on the final bid of the item. So, if the item is won at $100, the auctioneer takes his percentage of that price. Typical seller?s premiums run 20-25% of the price with 25% being the norm. The auctioneer is essentially taking 35% of each item?s winning bid in commission?25% from the seller, 10% from the buyer. An auction that sold $12,000 total in goods over its course last weekend made the auctioneer $1,200 in buyer?s premiums and $4,000 in seller?s premiums. Not bad, eh?
I hope this short guide to what to expect from going to auctions helps someone. It is in no way complete and I?m sure I left out some information. If you have any other questions, please do not hesitate to ask.
Thanks!!!!
An addendum: About the auctioneer calling bids and not being able to understand him......given time, you'll be able to easily understand what he's saying, but in essence what is being said is simple: he's calling out the bid he's already gotten and the bid he's seeking. So, if he's got a $5 active bid, one that's already taken, and he's looking for the next incremental bid, this case a $2.50 increment is typical, he's looking for someone to bid $7.50. That's about all he's saying. He may throw in some crap trying to build excitement or get someone to bid, but that's the important part of his call.
Bid increments can be $2.50, $5 or more depending upon where the bid stands and what the house uses for increments. Typically under $5 it's a dollar, under $20 it's $2.50, over $20 it's $5 increments. You can hold your hand flat, parallel to the ground, palm down and make a back-and-forth motion to indicate to the auctioneer that you want to bid but only want to bid half the current increment. Most will oblige....it moves the bidding along, especially if the bidding is stalled a bit. Sometimes the auctioneer will himself halve the increment if one bidder tires and the bidding stalls and it appears the next incremental bid seem too high for the opposing bidder to take the next bid.
Remember, as auctioneers say, it's not where the bidding starts, it's where it ends that matters. (But the lowest start bid is dependent upon the house and the type item being sold. I go to many auctions of many types...........one starts bidding at a buck and increments at 25 cents until he gets to a few dollars, then moves to 50 cent increments, and on. Another barn starts at $2 and has 50 cent increments until $5, then $1, then $2.50 when he gets to $15. Another establishment will not start lower than $5, has $2.50 increments until $20 when they begin $5 increments. So it depends a lot on where you are....but it never hurts to try the lowest bid you think you can get away with.
Another thing....tie bids. Sometimes it happens....the bidding finishes and the auctioneer calls the winning bidder's number, and it's not yours. But your bid was taken by one of the workers in the pit/ring (the place the item being bid upon is being shown.) The ring worker took your bid and the auctioneer saw another person with the same bid. This happens and is called a tie bid.....sometimes happens at the end, sometimes during the auction; both guys take a bid simultaneously from different people. When it occurs at the end, the auctioneer typically will reopen the bidding to the tied bidders ONLY, allowing those two to duke it out until one "retires". When it happens during, the auctioneer will give one or the other the chance to break the tie with the next incremental bid.
Tie bidding happens....people sometimes get upset about this, but it's part of a live auction. Don't get mad, just either bid again or let the item go. Life goes on...and always remember, you came to the auction without a darned thing in your hands, it won't kill you to go home empty handed, either.
This work is copy written by Jeff Mayer, in whole and in part. It may not be reproduced without citing its author and giving credit where credit is due.
ã 2004, Jeff Mayer
Hi. I?m Jeff, a self-confessed ?auction addict?, and this is my unofficial guide to buying at almost any type auction and not getting too screwed over at the end. While I do NOT claim to be any sort of expert of and about auctions, I have over 5 years of experience in going to auctions and have gained a bit of ?wisdom? about how to buy and sell at them. I have also over this time become good friends with a few auctioneers and have been privileged enough to be introduced to the goings-on behind the scenes at auctions. So this is my humble attempt to share what knowledge I have gleaned over the years with those interested in becoming a fellow ?auction addict?.
If you?re bothering to read this guide, you?ve probably either heard of or seen some sort of auction and the potential for deals you can get at them. Most of you are probably familiar with the collector auto auctions you?ve seen on television, like Jackson-Barrett, or the high-end type of antique auction like Southeby?s. While these are true auctions, they do not represent the full scope of auctions in the ?real? world. There are auctions for bankruptcies, household goods, storage unit foreclosures, antiques, estates, junk, automobiles, and on and on. Almost any good or commodity you can think of probably has and is being auctioned.
I?ll discuss types of auctions and what to expect to see at them, how to bid at auctions, why you pay what you pay, what to look for before the auction begins, what to watch for during the auction?s bidding process, and some simple ?rules? I?ve learned over the years. Unfortunately, I do like to talk, so I tend to ramble and am a little verbose. I?m going to go into detail on some things, so this guide may a little long for some people, and for that I apologize. Just bear with me and you WILL gain some good information.
So let?s first discuss a few of the types of auctions. You?re probably all familiar with auto auctions. You?ve heard of the ?great deals? someone got at an auto auction?a fantastic car at an unbelievable price. True, one can sometimes ?steal? a car for next to nothing at an auto auction. But, the true deals are only at the dealer-only auctions. These are the auto auctions where dealers sell to other dealers?ONLY!!! The general public is NOT permitted to these auctions. The requirements for attending this type of auction are pretty daunting, including the need for a reseller license in automobiles. In my state, to obtain an auto dealer?s license requires a few steps, including application to the appropriate licensing department of the state government, proving you are bonded for a minimum of $20,000 (usually done by obtaining bonding insurance from the appropriate insurance agency that specializes in this type of bonding insurance), a business license, a proven physical location for selling vehicles, among other requirements. These, and other requirements, have prevented many from getting into the ?real deal? auctions.
Instead, you?re left with the public auto auctions. You therefore must remember the autos at these auctions are the cast-offs from dealer lots in most cases. These are the cars that have been taken in on trade that have too many miles on them to sell on that dealer?s lot, or have too many things wrong with them to make it profitable for that dealer, or are too old for that lot. New car dealers typically won?t sell a used car on their lot if it?s over four or five years old. There are typically too many problems with getting that old a car up to new-car lot standards. Also you may find repossessions at these sorts of auctions. But if someone hasn?t taken the care to keep up payments on the vehicle, that person probably hasn?t taken much actual care of the vehicle, especially when that person knows the car is going to be repossessed. I tend to avoid auto auctions and try to deal with private owners when buying a vehicle if I?m looking for a great deal or buy from a new car lot if I?m looking for a good quality used car with some sort of warranty. So, with that, I?m leaving all further discussion of auto auctions.
With that said, let?s discuss the other types of auctions out there. First, livestock auctions. Livestock is just what it implies?the sale of any sort of animal. These can be ?domesticated? or ?exotic?. Domesticated can include cows, horses, pigs, ducks, chickens?any and all of the expected and unexpected barnyard varieties. Exotic can range from emus, ostrich, zebu, zebra, buffalo, and pheasant?almost any sort of animal/bird that exists. While there are practically no restrictions on who can purchase the domestic animals, there can be a few restrictions on the exotic animals including the need for the possession of an endangered species permit. My wife possesses such a license and they are not hard to obtain. We obtained this permit because we raised exotic pheasants many years ago, specializing in rare Indonesian species. This type of auction can be fun, but they are really only for specialists/farmers or the like. They can be quite interesting to attend because you never know what you?ll see being sold.
Bankruptcy auctions are exactly what the name implies. The goods are being sold to satisfy a bankruptcy, done typically under bankruptcy court order. At this type of sale, a representative of the court will be in attendance to observe the sale is carried out as ordered. He will neither interfere with the sale nor bid, but is there just as a court-appointed observer. Many times the plaintiff will also be in attendance but, again, his presence is irrelevant. At this type of auction, like a lot of auctions, the items are as-is/where-is and no guarantees on functionality, and items may have problems such as liens or contracts that existed prior to the sale. It is up to the buyer to determine if the item is free and clear of any encumbrances prior to bidding. This typically only comes up with automobiles and real estate, not physical goods like computers, desks, chairs, etc. You can get some whopping good deals at this type of auction but buyer beware?and I?ll discuss what to beware of in a later section.
You can find out about these types of auctions by word-of-mouth, flyers from the auctioneer hosting the sale, and advertisements in the LEGAL section of the classified ads in the local newspaper where the bankruptcy has been declared (by law, this type of sale must be advertised prior to being held and it is ONLY and ALWAYS advertised in the LEGAL section of the classifieds, not in the auction/general merchandise/for sale sections.) These sales are almost always held on?site, meaning at the location in which the person lived or business operated. The terms of the sale are almost always the same: cash or good check, items purchased must be taken away the day of the sale. Sometimes there will be an additional load-out day provided, but unless this is announced do not assume you can come back tomorrow to load your goods because they probably won?t be there then. If you attend such a sale, plan on loading everything you?ve purchased that day, rain or shine.
You can usually tell what you can expect to find at a bankruptcy auction by the type of business that went bankrupt. You wouldn?t expect to find farm implements being sold at a restaurant?s bankruptcy, nor would you expect to find tractors at a clothing store?s bankruptcy. A recent one we attended for the bankruptcy of the Savannah Symphony in Savannah, GA, had what one would expect from a typical office environment: desks, computers, printers, monitors, copiers, office supplies galore, chairs, and the like.
Akin to bankruptcy auctions are storage unit foreclosure sales. They occur quite frequently and you can find them advertised, again, in the legal section of your local newspaper. The rules for this type of auction are rather simple. They open a unit, you typically bid on the contents of the unit, and haul it off that day. Some of these sales require a modest deposit prior to your being able to bid?.sometimes around $100. This is to ensure you do take all the ?goods? off the property the day of the sale and you clean the unit after you?ve emptied it out. Some storage rental places will allow you rent a unit for a month to store your purchases, but most won?t. The goods are, again, sold as-is/where-is and no guarantee on anything.
Estate auctions are another type many people are familiar hearing about. They can be living estate or the estate of someone who has passed and the surviving family is disposing of the unwanted possessions. But not all is what it seems at estate auctions.
To start, auctioneers LOVE estate auctions. The reasons are many but include these: many people who?d never dream of attending an auction at an auction house/barn will be drawn to an estate auction like a moth to a flame. Also, prices tend to run higher at estate auctions vs. barn auctions?why, no one can explain. But this tends to hold true?.the prices goods get tend to be higher than at auction barns. (I use the term ?barn? as an encompassing term to reflect auctions held at auction houses/barns. In our area, most auctioneers call their places of auctions barns instead of houses, so I tend to use their terms. The term ?auction house? is usually reserved for the very high end of auction establishments, like Southeby?s.)
Because of these reasons, among others, much of what you may find at estate auctions does not come from that person?s estate. Instead, the auctioneer probably will include items from his barn. He does this because he anticipates higher prices for these goods and to attract more people to the auction. Many times we?ve attended estate sales and there is so much furniture, the house the person lived in could not possibly have contained it all. Also, the styles of the furniture will vary widely from the plebian to the antique. Now, it?s true many people collect furniture in varying styles and quality, but do you honestly think a 78 year old man would have a preteen girl?s white French Provincial-style bedroom set in his house? Probably not, and that?s the type item that?s been added to the auction to ?flesh it out?. Other things are antiques of much higher quality than the vast majority of the items for sale at the estate. You?d rarely find Tiffany lamps mixed with Rooms-To-Go furniture. So pay attention to what?s being sold?.there will be clues to what and if items have been added to the estate from other sources.
Then there are the auctions held at auction barns. They can range from household good auctions (where you can find anything and everything) to true antique auctions. Almost all are held on a regular schedule ranging from weekly to monthly. Special event sales can be mixed in like a gun or tool auction. The quality of the goods can vary widely so it can take going to these auctions several times before you learn what to expect to find and the quality to expect to obtain the goods offered for sale.
Now for my ?rules? of buying at auctions and what to watch for when bidding.
First, bid with your head, not your heart. I?ve seen too many people get caught up with the bidding and pay MUCH more than an item is worth or can be purchased for in a store locally. It happens all the time. So think before you bid. When you decide to bid on an item, determine your comfort level of spending on that item and try to stick to it. Don?t let ?auction fever? take hold of you?it does to many people, much to their chagrin later.
Second, don?t lose an item for a bid. Now this may seem to be contrary to the first rule, but many times another bid will get you the item. If the bid increment is at $2.50 or $5, one more bid from you will sometimes win you the item. When you set your limit of spending on an item, allow 10-15% above for an additional bid or two. That extra bid or two may win you that item.
Third, take advantage of the inspection period before the auction. Almost without exception, the auction will have an hour or two, or sometimes days prior to the auction, to examine the items for sale. LOOK CAREFULLY!!! Items like crystal, pottery, and other fragile items, may look at first glance like they?re in pristine condition only to reveal small chips, cracks or other defects upon closer examination.
Another thing about items and inspection?if it has a cord (electrical items) and it?s not plugged in and demonstrated to work, IT PROBABLY DOES NOT WORK. The only exception to this is if the auctioneer states he warrants the item for functionality and you have a right of return against it not working. So, if the item is not shown to work, it probably doesn?t. (I say this because I have made this mistake more than once?.much to my chagrin. There are also guys who will bid on anything with a cord?.working or not. If it has a cord, they bid.)
Fourth, never be the first bidder, just the last bidder. NEVER open the bidding at the first offered bid on an item. Typically the auctioneer will offer the item at an opening bid of what he thinks the item should ultimately be worth. Only an idiot will bid at that point. If there are no bidders at that offered bid, the auctioneer will drift down in his opening bid?and down, and down until someone bids. In some auctions, you can offer an opening bid?.it may be accepted, it may not.
But, if you want the item, do not bid first. You are showing your hand and interest to other potential bidders. This over eagerness to bid has been the downfall for many bidders. The winning way to bid is let the newbies and cheapies start the bidding. The price will bid upwards for a bit. Very shortly, the cheapie bidders will fall to the wayside and those who are intent upon winning are left. Now is the time to start your bidding. Waiting will let you see who is serious and who was just ?playing?. It also lets you determine if the item will stay in your comfort range of what you are willing to pay for the item. Many times there have been items I?ve been interested in only to watch it get bid through what I was willing to pay and see it go for more than what I could purchase the item from an antique store or retail establishment.
You must understand the bidding game. Between bidders, it is as much a contest of wills as it is money. For the auctioneer vs. the bidders, it?s a contest between attempting to garner as much for an item as he can drive the price up to vs. getting the item as cheaply as you possibly can. And you must understand who attends and bids on items. There are two groups of people?.collectors/average Joes and dealers. The dealers are buying for resale. They typically have a shop or sell online somewhere. Fortunately, if you are buying for yourself, you can easily outbid the dealers?.they can only afford to spend so much for an item before the profit margin disappears. Bidding against another collector/average Joe, on the other hand, can be a trying experience especially if ?bidder fever? has taken hold of that bidder. ?Auction? or ?bidder fever? strikes almost everyone at some time. Sometimes, it?s because you dearly want the item and you?ll be damned if this thing will escape you this time. Other times, the bidding war becomes so intense all rational thinking eludes you and your brain just shuts off?.only your arm works and it won?t quit raising your bidding number until the bitter end. Only when you leave do you finally realize how much you actually paid for the item?but then, it?s too late.
Then there is a third bidder that can be involved in the bidding. That person is the auctioneer himself. Yes, the auctioneer will bid on items himself. Sometimes, this is because not everything at these auctions is on consignment but is sometimes owned by the auctioneer. He bids to attempt to drive up the price to what he needs to sell the item to make a profit. Other times, especially at estate sales or bankruptcy sales, he?s attempting to purchase the item as you are?he?s going for resale potential while you?re buying for yourself.
Now, an honest auctioneer will tell you he or his staff will be occasionally bidding on items outright. A more unscrupulous auctioneer will not let you know he?s bidding against you. So how do you tell? Well, it will take going to that auctioneer?s sales a few times to tell if he?s bought the item. When a bidder wins, the item is assigned to the winner?s bidder number, the number you receive to use when you register at the auction?s beginning. Some auctions assign permanent numbers?you use the same number every time you go to that particular auctioneer?s sales. Other auctions assign you a different number every auction. But if you go to an auction repeatedly, you begin to know who has what number and the auctioneer WILL HAVE a permanent number. Sometimes, the auctioneer will change his number, but it only takes a little of the auction to realize what his number is for this auction.
Another tactic of unscrupulous auctioneers is taking phantom bids. He?ll act like there is someone in the rear of the room he?s taking bids from while there really is not. I?ve caught a few doing this and refuse to bid any longer. I also will never go back to that auctioneer?s sales no matter what he?s selling. I despise that practice and refuse to give my patronage to sellers who engage in this practice. I usually catch them in this by placing myself in the rear of the room when something comes up for bidding that I really want to buy. I move to the rear under the pretense of going to buy a Coke from the concession area that?s invariably in the rear of the barn. From this vantage point I can usually see who is bidding against me or if the auctioneer appears to be taking phantom bids. If it appears to me that phantom bidding is going on, I?ll immediately stop bidding and walk out.
The other reason I stand in back, as I said, is to watch the person(s) I am bidding against. You can many times tell the other bidder?s resolve by seeing how quickly they respond to a bid. If the other bidder is just holding his/her bidder number up and never dropping it as the bidding progresses, that person is VERY serious about winning the item. Holding one?s bidder number up and not dropping it indicates the person WANTS the item but is also doing this in an attempt to intimidate other bidders into giving up prematurely. Another bidding tactic is the opposing bidder comes back with a bid almost as fast as the auctioneer gets the next bid increment out of his mouth. No hesitation on the part of the bidder also indicates the person is still strong on the item and its price. A hesitation before the person responds to the next bid shows weakness in that person and their bid. The longer the hesitation before the person responds to the next bid, the weaker the person is on that item.
This is when the smart bidder BEGINS to bid?.when the bidding has stalled, the bidder is hesitating before making that next bid, and the item is about to be sold. Starting your bidding now may get that item for that bid. A new bidder coming in when the bidding has stalled shows the new bidder is in strong, at least for the moment, and many times forces out the ones who were already bidding hesitantly at this point. Sometimes it takes a couple of bids at this point, but if it?s an item I WANT, and the price is still fair, a couple of bids now usually takes it. Unfortunately, there are always a couple of people who understand this dynamic and sometimes a new bidding war erupts. Then it just comes down to what you are comfortable spending on the item.
This brings up another point?.what the item will really cost. There is almost always a buyer?s premium added to the winning bid of the item. Around here, the buyer?s premium runs 10%. So, if I win an item and the winning bid was $100, a $10 buyer?s premium is added to that winning bid, making the item?s true cost $110 before sales tax?and unless you have a tax-exempt number, you get charged sales tax on everything you buy. The tax is computed after the buyer?s premium is added. It is a truly rare auction that does not have a buyer?s premium, although they do exist.
The buyer?s premium is one of the two ways the auctioneer makes money from conducting an auction. The other way is the seller?s premium. This is the percentage the auctioneer charges the seller of the item and is also based on the final bid of the item. So, if the item is won at $100, the auctioneer takes his percentage of that price. Typical seller?s premiums run 20-25% of the price with 25% being the norm. The auctioneer is essentially taking 35% of each item?s winning bid in commission?25% from the seller, 10% from the buyer. An auction that sold $12,000 total in goods over its course last weekend made the auctioneer $1,200 in buyer?s premiums and $4,000 in seller?s premiums. Not bad, eh?
I hope this short guide to what to expect from going to auctions helps someone. It is in no way complete and I?m sure I left out some information. If you have any other questions, please do not hesitate to ask.
Thanks!!!!
An addendum: About the auctioneer calling bids and not being able to understand him......given time, you'll be able to easily understand what he's saying, but in essence what is being said is simple: he's calling out the bid he's already gotten and the bid he's seeking. So, if he's got a $5 active bid, one that's already taken, and he's looking for the next incremental bid, this case a $2.50 increment is typical, he's looking for someone to bid $7.50. That's about all he's saying. He may throw in some crap trying to build excitement or get someone to bid, but that's the important part of his call.
Bid increments can be $2.50, $5 or more depending upon where the bid stands and what the house uses for increments. Typically under $5 it's a dollar, under $20 it's $2.50, over $20 it's $5 increments. You can hold your hand flat, parallel to the ground, palm down and make a back-and-forth motion to indicate to the auctioneer that you want to bid but only want to bid half the current increment. Most will oblige....it moves the bidding along, especially if the bidding is stalled a bit. Sometimes the auctioneer will himself halve the increment if one bidder tires and the bidding stalls and it appears the next incremental bid seem too high for the opposing bidder to take the next bid.
Remember, as auctioneers say, it's not where the bidding starts, it's where it ends that matters. (But the lowest start bid is dependent upon the house and the type item being sold. I go to many auctions of many types...........one starts bidding at a buck and increments at 25 cents until he gets to a few dollars, then moves to 50 cent increments, and on. Another barn starts at $2 and has 50 cent increments until $5, then $1, then $2.50 when he gets to $15. Another establishment will not start lower than $5, has $2.50 increments until $20 when they begin $5 increments. So it depends a lot on where you are....but it never hurts to try the lowest bid you think you can get away with.
Another thing....tie bids. Sometimes it happens....the bidding finishes and the auctioneer calls the winning bidder's number, and it's not yours. But your bid was taken by one of the workers in the pit/ring (the place the item being bid upon is being shown.) The ring worker took your bid and the auctioneer saw another person with the same bid. This happens and is called a tie bid.....sometimes happens at the end, sometimes during the auction; both guys take a bid simultaneously from different people. When it occurs at the end, the auctioneer typically will reopen the bidding to the tied bidders ONLY, allowing those two to duke it out until one "retires". When it happens during, the auctioneer will give one or the other the chance to break the tie with the next incremental bid.
Tie bidding happens....people sometimes get upset about this, but it's part of a live auction. Don't get mad, just either bid again or let the item go. Life goes on...and always remember, you came to the auction without a darned thing in your hands, it won't kill you to go home empty handed, either.
This work is copy written by Jeff Mayer, in whole and in part. It may not be reproduced without citing its author and giving credit where credit is due.
ã 2004, Jeff Mayer
RossMAN
Grand Nagus
- Feb 24, 2000
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Some notes about Foreclosure Real Estate auctions from my experience:
1.Good deals are available, but harder to get now since so many people know about this. There are old, retired people who have nothing better to do than research the Foreclosures. What you want to find are properties that are not "upside down." In other words the property appraises more than what is owed in the foreclosure.
2. A Foreclosure will have a court case number attached to it. Go to your county courthouse and lookup the file. It is public records. Read through the paperwork to make sure you'll be bidding on a FIRST MORTGAGE. You can usually look up the entire history of the property at the same time. If you pay someone to do a title check, this is what they will be doing. You can save yourself $200-$300 if you understand what is going on. You'll need to learn a little lingo, but it's not hard ('Satisfaction of Mortgage', etc).
3. Procedures differ between counties and states, but typically you'll need to have cash or a cashier's check and put a 5% or 10% deposit on the winning bid. The full amount is usually due shortly thereafter (i.e. within 24 hours). This is the biggest barrier. You have to have cash and you cannot get a loan for this. If you cannot come up with the full amount you lose your deposit.
4. There's usually a grace period of time for the defendant to pay up and you'll have to wait (one week, two weeks, or more). Even though you won the bid, you're not guarantied the property.
5. Once you own the property, replace the locks and get a mortgage and pay back all those high interest cash advances!
1.Good deals are available, but harder to get now since so many people know about this. There are old, retired people who have nothing better to do than research the Foreclosures. What you want to find are properties that are not "upside down." In other words the property appraises more than what is owed in the foreclosure.
2. A Foreclosure will have a court case number attached to it. Go to your county courthouse and lookup the file. It is public records. Read through the paperwork to make sure you'll be bidding on a FIRST MORTGAGE. You can usually look up the entire history of the property at the same time. If you pay someone to do a title check, this is what they will be doing. You can save yourself $200-$300 if you understand what is going on. You'll need to learn a little lingo, but it's not hard ('Satisfaction of Mortgage', etc).
3. Procedures differ between counties and states, but typically you'll need to have cash or a cashier's check and put a 5% or 10% deposit on the winning bid. The full amount is usually due shortly thereafter (i.e. within 24 hours). This is the biggest barrier. You have to have cash and you cannot get a loan for this. If you cannot come up with the full amount you lose your deposit.
4. There's usually a grace period of time for the defendant to pay up and you'll have to wait (one week, two weeks, or more). Even though you won the bid, you're not guarantied the property.
5. Once you own the property, replace the locks and get a mortgage and pay back all those high interest cash advances!
As for questions about hwere/when auctions are held in your local area, those I cannot answer. Some recommendations I might make are search the 'net for auctions in your state on Google, look in the yellow pages of your local phone book under auctioneers, auctions, etc., investigate the local Penny Saver or Tell-n-Sell or whatever the local publication your area has for private sellers to list things for sale....these are usually found in the corner stores for a buck. Also, if you find one auction house, you may find adverts there for other auctions/auction houses. Most auctioneers advertise for one another to an extent.....most all know one another within a 50 mile radius of one another.....probably a bigger range in all likelihood.
You may also call the local Chamber of Commerce in your area......many auction houses are members of this.
Be proactive....search them out.....the money you save and/or make in the long run is worth the little bit of time initially invested in finding them. I know it has been in our case.
You may also call the local Chamber of Commerce in your area......many auction houses are members of this.
Be proactive....search them out.....the money you save and/or make in the long run is worth the little bit of time initially invested in finding them. I know it has been in our case.
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