The word Auction comes from the Latin word Actus. This means increasing.
Auctions have existed for more than 2,000 years and continue to grow in popularity every year. An auction occurs when consumers gather physically or online to buy an item by bidding against each other until the highest offered price is reached.
A fast-paced auction is one of the most efficient ways of converting property or assets into immediate cash. In fact, over a quarter-trillion dollars in goods and services are sold at auction every year in the U.S.
There’s an excitement about an auction that makes it a special event that draws people again and again. People participate in auctions out of curiosity about what unique or interesting items are for sale. There’s even more curiosity among bidders when it comes to the prices obtained at auction.
Everywhere you turn at an auction, there is a thrill in the air as sellers have property to sell and potential bidders find something they want to buy and set out to successfully bid along with the rhythmic chant of the auctioneer until they hear that magic word. SOLD!
FUN Auction Facts
- 83% of consumers feel auctions are an exciting way to get great values and deals.
- 65% think they offer exciting items they wouldn’t otherwise purchase.
- 97% think auctions are FUN!
Advantages of Buying at Auction
There are many advantages to purchasing property at auction.
- Auctions are smart –Wise investments are made at auction as properties are usually purchased at fair market value through competitive bidding.
- Auctions are efficient – Buyers know in advance when the property will sell and when it will close. There are no drawn-out negotiations and waiting periods. New online bidding platforms have made auctions even more efficient for buyers.
- Auctions are transparent –At an auction, all buyers are competing fairly and on the same terms.Buyers know that sellers are committed to selling the property and that they have realistic expectations. Buyers are provided a comprehensive Property Information Packet.
- Auctions are fun!
Helpful Hints when Buying at Auction
- Arrive early and register for the auction. Certain auctions (i.e. real estate) may require a cashier’s check or other payment in advance of the auction to qualify you to bid in the auction.
- Always read the Terms and Conditions handed to you at registration because you are bound by them if you bid.
- Inspect items you are interested in buying because when you buy at auction you typically buy “as is” which means if you bid and win, you now own and cannot return the item.
- Bid in sync with the rhythmic chant. You should be listening closely and following the increasing bids. Remember: Filler words in the chant are used to remind buyers of the last bid number and give buyers time to consider their next bid.
- Understand the basic terms and types of auctions: absolute, reserve, and subject to seller confirmation.
Auction Terms to Remember
As Is – Selling the property without warranties as to the condition and or the fitness of the property for a piticular use. Buyers are solely responsible for examining and judging the property for their own protection, Otherwise knows “As Is Where Is”.
Auction listing agreement – A contract executed by the auctioneer and the seller which authorizes the auctioneer to conduct the auction and sets out the terms of the agreement and the rights of each responsible party.
Auction with reserve – (Subject to estate or seller conformation) An auction in which the seller and or their agent reserve the right to accept the highest bid offered. A minimum acceptable price may or may not be disclosed and the seller reserves the right to accept the bid offered.
Bidders choice – A method of sale whereby the successful high bidder wins the right to choose a property or properties of a group of similar like type properties. After the high bidder selection of a property it is removed form the group, the second round of bidding commences or the auctioneer may ask if someone else wishes a selection at the price offered. If not the bidding may commence again and continue until all like type properties are sold.
Online auction – An auction of personal property and or real estate that is conduced on line via the internet. All bidding is done via the internet through the auctioneers website or a host website for the auction company.
Property Information Packet – A detailed collection of information and instructions pertaining to the property to be offered at auction. The packets are available for prospective bidders to read and review. Property information may be obtained online prior to the auction and a full packet is available on auction day.
Buyers premium – A percentage added on the high bid. Buyer premiums are used by many auction companies. It is important to keep in mind that amount is added to the high bid in addition the winning hammer price.
Caveat Emptor – A Latin term meaning “let the buyer beware”. A legal maxim stating that the buyer takes the risk regarding the quality of condition of the property purchased, unless protected by warranty. Also see “As is Where Is”.
Opening bid – The lowest acceptable amount at which the bidding must commence.
Minimum Bid Auction – An auction in which the auctioneer will accept bids at or above a disclosed price. The minimum bid is always stated in the brochure and advertisements and is likewise announced at the auction.
Terms and Conditions – Terms and Conditionsare printed rules and format of the auction. Terms and conditions outline the type of auction, and any other pertinent information about the auction. The terms and conditions may vary between auctions and auction companies.
Ringman or Ringperson – A member of the auction team who works with the bidders throughout the auction. A ringman is generally recognized as the person in the crowd yelling and flashing hand signals to the auctioneer when a bid has been made. This individual works the auction crowd. Hence the term ringman.
Clerk – The person who records the price bid, the description of the item sold, and the amount it sold for. This information is then delivered to the cashier.
Cashier – Registers you into the auction, keeps the books of the auction, and most important the one who you will settle up with at the conclusion of the auction.
Links to Auction Resources
- Upcoming Auctions – Review upcoming auctions conducted by Webb & Associates.
- Auction Handbook – Download this free handbook to learn more about auctions.
- Auction Glossary – Access to an exhaustive list of auction terms.
- History of Auctions – Read more about the history of auctions provided by the National Auctioneers Association.
- net – A great resource for hundreds of auctions in Kansas and Missouri.
- Kansas Auctioneers Association – Learn more about auctions in the state of Kansas.
- Missouri Professional Auctioneer Association – Learn about auctions in the state of Missouri.
- National Auctioneers Association – Learn more about the auction industry and access other outstanding auction resources.
- Wall Street Journal Article, December 18