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.
- Did you know that more than half of the total U.S. population has attended a live auction?
- In 2004, the value of all goods and services sold at live auction in the U.S. was approximately $202.7 billion. This figure is up 6.8% over 2003 and translates into a huge number of satisfied buyers and sellers of goods.
- They’re entertainment at their finest. That’s what most consumers say about auctions and that’s the number one reason they attend. So what makes them so fun and entertaining? Some say it’s the unexpected and the idea of experiencing something original.
All in all:
- 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.
- There are thousands of auctioneers throughout the United States who offer a wide range of auction services to consumers. So what do you look for when hiring an auctioneer or an auction firm?
- First, look for someone who specializes in selling the type of property you want to sell. All auctioneers have specialty areas and most have more than one. What do they know about the products or goods you are selling?
- Experience is another critical element. How long has the auctioneer or the auction company been in business? What is their reputation? Look at their web site, if they have one.
- Most importantly, look for an auctioneer who is a member of the National Auctioneers Association. Most will display this logo on their business cards, signs, web sites and other business materials. The NAA is the largest professional association for auctioneers in this country, working for the betterment of the auction industry. It offers continuing education programs for auctioneers to help them keep up-to-date on the latest trends and technology for the auction industry.
- The NAA also offers a wide range of designation classes to make auctioneers “specialists” in areas such as personal property appraisal, real estate, estate auctions and more.
- All members of the NAA abide by a code of ethics that guarantees high standards to customers and fair business practices.
- In short, this symbol means you have made the best choice when it comes to auction services!
When meeting with the auction company:
- 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!
- We work hard for our money, but most of us spend the majority of our waking hours working. Our money pays for our homes, our land, our automobiles, insurance, clothes, food, all of our possessions and so much more. So when it comes to selling those possessions and property, the smartest thing you can do is let an auctioneer help you continue to get the value you deserve. A professional auctioneer knows what land is worth, what household items and office equipment are worth, and what personal property is worth. A professional auctioneer will manage your sale so you can get a good value from these items in which you have invested your hard earned money.
- You work hard for your money, and we will work hard for your money, too.
Advantages of the Auction Method
- The auction method has advantages for every party in the event: the buyer, seller, all bidders and spectators.
- Buyers often find rare items and can usually take home their purchase right away from an onsite auction, not waiting for shipping or incurring shipping costs after they have already purchased an item.
- Sellers at auction can usually be assured that their property will sell on a certain day. Real estate sellers, in particular, like the fact that a sale on a specific day will end their carrying costs and they enjoy being able to set a minimum price they will accept at auction.
- Bidders have a great time, even if they don’t always get their chosen item. They eagerly anticipate the item coming up for auction; they think about how high they will bid; they watch the competing bidders and often talk with them afterward.
- Spectators at auction enjoy an exciting event and seeing what types of items are offered in auctions these days. Attendees don’t feel pressured to buy, and they can bring the whole family to see and learn about antiques, art, furniture and other items.
- Auctions are a community event. People see friends and meet new people. Auctions have been a social gathering for thousands of years and continue to be the best way to determine current market price for items.
- Here are a few other facts about auctions.
- A speedy process.
- There’s no doubt that an auction is the fastest sales process around. It’s quick and efficient and that’s what makes it attractive. We sell a multitude of items in a short time.
- You Set Your Own Price and Establish a Value.
- You are in control at an auction. You decide when to bid and how much to bid – how high or low you want to go.
- Certainty of Knowing What You’re Getting.
- Auctioneers deal with a wide range of merchandise. They are educated professionals who know value and price. Many have special certifications in personal property or estate appraisals.
- Fun and Excitement.
- There’s no doubt that an auction is entertainment at its finest. Crowds of people competing for unique property, combined with that lively and rhythmic auction chant make for some great entertainment and fun. It’s an event the whole family can enjoy.
- Honesty of the Transaction.
- Auctions are very organized and the rules are straightforward. Auctioneers who are members of the National Auctioneers Association, as I am, are bound by a code of ethics that protects consumers against unfair auction practices.
- 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.
- A “descending” method was used for these auctions, starting with a high price and going lower until the first person to bid was the purchaser, as long as the minimum price set by the seller was met. The buyer could get a return of money if he and his new spouse did not get along well, but unlike a horse, maidens could not be “tried” before auction.
- Women with special beauty were subject to the most vigorous bidding and the prices paid were high. Owners of the less attractive women had to add dowries or other monetary offers in order to make the sale.
- In Rome, Italy, around the time of Christ, auctions were popular for family estates and to sell war plunder. Roman Emperor and philosopher Marcus Aurelius sold family furniture at auctions, for months, to satisfy debts.
- Roman soldiers sold war plunder at auction. The licensed auctioneer, called “Magister Auctionarium,” drove a spear into the ground to start the auction. Today we use an auction gavel.
- 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.
- Fur was especially big during this time. In his book, “Going, Going, Gone!,” Bellamy Partridge says “the Bible and the beaver were the mainstays of the Pilgrims, the Good Book saving their souls and the beaver paying their bills.”
- Initially, the furs were collected from Native Americans in the fall and winter, utilizing the “private treaty” method of exchange for “wampum” (the Native American word which meant money). The raw pelts (or hides) were transported to the closest shipping port. In the spring of each year, the auction method was used to sell the raw peltries to the European merchants who arranged the transcontinental voyage to the Old World. Once the ships returned to the port in Europe, the peltries were auctioned to manufacturers, who would process them for the retail market. The early fur trade was chiefly responsible for the settlement and development of North America.
- 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.
- History has it that the art of auctioneering was a common practice for Civil War Colonels who regularly auctioned off the spoils of war and surplus. However, only officers of the Colonel rank could conduct them, spawning the use of the term “Colonel” by many auctioneers still today.
- A short historical narrative from one of the top auction schools details this process: “As the Civil War progressed, many troop battalions made a practice of seizing property of land owners and merchants as they marched. Contraband would be collected and carried to a favorable area, then the Colonel or commanding officer would sell the goods at public sale. Even after the Civil War, military Colonels traveled to sell surplus goods and seized goods. Auctioneers followed some of the same trails and dressed similar to army Colonels to such an extent that the public began to recognize auctioneers as ‘Colonel.’
- 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.
- Because travel was more difficult, and was mostly by horse and wagon, auctioneers enticed crowds by routinely offering lunch to those who came to the sale. Weather often dictated the time the auction started, as all were held outdoors.
- 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.
- The 1950s 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.
- Auctions burst into cyberspace in the middle of the decade. The ever flourishing eBay was launched in 1995 and would go on to become an “online leader” in the bidding business.
- Many auctioneers today offer both live and online auctions to meet the needs of customers near and far. Technology allows buyers to participate in the sale without even being there.
- 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). NAA auctioneers are also bound by a code of ethics that protects consumers against fraud and unfair business practices.
- Auctions have been around since the beginning of time because they are a highly efficient and effective business tool – and they meet the needs of the public. But, they also are fun, entertaining and theatrical. Most people who attend an auction keep wanting to go back again and again.
- If you have never been to an auction, join in and become part of history.
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 theoption to purchase the similar lotsat 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.