Are you thinking about buying or selling at a live auction? This article is designed to provide you with the details on how a live auction works. Specifics may vary from auction to auction; however, the following information includes helpful and important guidelines from which everyone can benefit.
The date, time and place of the very first auction is often disputed, but there is one thing we do know: auctions have been a part of civilizations for thousands of years. Auctions have been held in temples and monasteries, taverns and coffeehouses, barns and educational institutions. They have been used to sell animals, people, natural resources, homes, cars, debt, credit and many other items.
In today's day and age, there are basically three types of auctions:
Simulcast Auctions: Live bidders are physically present onsite at an auction compete
against online bidders who have either placed proxy bids or are bidding live in real time. This is a common type of auction.
Live Auctions: Only bidders who are physically present at an auction onsite are able to bid. These auctions usually have a notation that reads "Sorry No Online Bidding".
Online Only Auctions: Only registered online bidders are able to bid and complete against other registered bidders. These auctions usually have a notation that reads "Online Only".
For the purposes of this article, we'll be discussing how a live auction works.
First, bidders must acquire a bidder card from the auction cashier. Bidder cards are needed to make a bid on any item. In most cases, a refundable cash deposit is required before the bidder card is dispensed.
At the start of the auction, the auctioneer announces the terms of the sale so that all bidders are aware of their responsibilities in bidding. When a bidder is ready to make a bid on a particular lot or item, they simply raise their hand or their bidder card. The auctioneer or ringman will acknowledge the bid with a nod or a call. The ringman assists the auctioneer in spotting bids, holding up merchandise so the bidders can see the item for bid and marking the item with the bidder's number once it has been sold.
Upon successful winning of the bid, the auctioneer tells the clerk what the bidder paid for the item and their bidder number. This information is recorded and given to the cashier who tabulates the bidder's purchases for check out from the sale. The bidder pays by either cash or cashier's check. In most cases, the bidder must remove their property from the auction location immediately following the sale.
And finally, here are some auction industry terms that will help you understand your responsibilities as a bidder:
Absolute Auction: All items in the auction will be sold to the highest bidder, regardless of the bid. There is no reserve or minimum on the item for bid.
Auction with Reserve: Some or all items in the auction have a minimum bid that must be reached by a bidder before the auctioneer can sell the item. This type of auction is reserved mainly for items with a high value such as construction equipment, homes or commercial real estate properties.
"As-Is" or "Where-Is": In these types of auctions, there is no warranty on the merchandise and the bidder is responsible for removal from the auction location. This means that the bidder must rely on their own inspection and knowledge to make bidding decisions.
Choice: Auctioneers use this buying option when more than one product is being offered for sale. The bidder may bid for an individual item, and the winning bidder may take as many of the set as they wish. If the bidder does not want all of the items, the remainder items go back up for sale at the same price to any bidder.
All for One Money: Multiple items are being offered for sale and the bidding price is one amount for all of the items. Bids for individual items are not accepted.
So Much Each & All Go: Multiple items are being offered for sale and the bidder's price is per item, however; the bidder must take all the items.
Sold: When the auctioneer says the word "sold" or the gavel falls after the bidding has ceased, that means the item is sold as the auctioneer directs to the clerk. The bidding cannot be reopened after the word "sold" is said.
Final Word: The auctioneer has the final word in all bidding situations. If the ringman took your bid and the auctioneer did not see the bid, the item is sold as the auctioneer directs.
Author Resource:-
Deb Weidenhamer is President of Auction Systems, the Southwest's most active auction and appraisal company. Visit us at www.auctionANDappraise.com or call 800-801-8880 for more information.
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