AUCTION TIPS, HINTS AND DEFINITIONS

Good for the Soul

An auction is defined as a public sale of goods or property in which prospective purchasers bid until the highest price is reached.

If you've never purchased through an auction before, you may be reluctant to participate in one. But if you follow these tips, you'll soon find yourself not only comfortable with the auction process, but anticipating making your first bid!

Absentee Bids
You can bid on an item without attending an auction personally by submitting an "absentee bid". The bid is submitted on an item prior to the auction starting by whatever means the auctioneer has specified.

Sealed Bid
Not a true auction. Confidential bids are submitted and opened only at a predetermined place and time.

Absolute Auction
Absolute auctions are won by the highest bidder without any limitations or reserve prices being imposed

American Auction
This type of auction has a number of items offered at the same price, the highest bid for the most items wins the bidding.

Appraisal
When an item is valued or confirmed by an auctioneer it is known as an appraisal the person doing appraisals may also be known as an appraiser.

"As is"
Items sold at auction are 99% of the time, sold in "as is" condition etc. This means that all sales are final regardless of what flaws are found on a particular item after the sale. It is not the auctioneers 'duty' to examine the item for flaws - they are simply auctioning the item. This is why getting to the auction early for the preview is so important so you know exactly what you're going to be bidding on.

Auctioneer
The person who conducts an auction sale

Auction House
Usually refers to auctioneers who hold auctions at their own premises, the company is referred to as an auction house.

Catalogue Auctions
These auctions are usually held in a location different to where the actual goods for auction are kept. Viewing of the goods will have taken place prior to the auction.

Dutch Auction
An auction where a seller has listed multiples of the same item. All winning bidders pay only the lowest successful winning bid amount.

Hammer Price
The price reached by the auctioneer when the hammer or gavel is dropped.

Fast Knock
A strategy used by auctioneers to gain attention and to stimulate an audience when the auction is going slowly. He puts up a lot, asks an unusually low opener and quickly knocks the item down (declares it sold) to first bidder.

Jump Bid
A bid suddenly higher than other increments. Here is an example of a 'Jump Bid' situation: Two bidders or more are competing for a particular item and the auctioneer is calling the next increment, say $25 when a bidder exclaims, "I bid one hundred dollars!" Such a bidding strategy provides shock value to the competing bidders and more often than not, the 'Jump bidder' wins the lot.

On Site Auctions
If a company has gone into liquidation and its assets are to be sold at auction that auction sometimes will take place at the company site rather than at an auction house , this is done when it is not practical to transport the goods to the sale the goods are sold "On site".

Online Catalogue
The auctioneers often place details of the lots for auction on their website. This can be in HTML, i.e.. as a web page, or can be a file made available to you for download. ( Both a page of HTML and a file for downloading can be saved to disk on your machine for viewing off-line )

Private Auction
Bidders identities are not disclosed in this type of auction.

Proxy Bidding
Submitting a confidential maximum bid to an auction service. The auction will automatically increase the bid to maintain the high bid. The proxy bidding will stop when the bid has won the auction or reached the limit of the proxy bid. The online auction company, eBay is on a proxy bidding system.

Reserve Auction
The seller has set a minimum (reserve) price for the lot and can decide wether to accept or refuse a bid. The reserve price may not be disclosed.

Yankee Auction
An auction where a seller has listed multiples of the same item. Each winning bidder pays their exact high bid.

Why are goods sold at auction?

There are several reasons why goods may be sold at auction and it is important to know why the goods are being sold and where they came from, this information can be found by consulting with the auctioneers before the sale or it may be stated in the catalogue of lots relating to that auction sale. One of the following may apply

  • The goods are being sold to raise cash to pay of debtors if the previous owner has gone into liquidation, receivership or bankruptcy.
  • The goods are being entered in the hope of a dealer making a profit from their sale.
  • The goods are being sold by the owner to create space for new stock
  • The goods are surplus to the owners requirements due to new stock being acquired.
  • The goods have been part of a leasing agreement and the term of lease has ended and the goods are not required by the leasing company who are now the legal owners.
  • The goods will not sell any other way due to poor demand or over supply.
  • The goods may be part of an illegal consignment and have been confiscated by an official department who now wish to dispose of them.
  • The goods may have been stolen and the previous owner cannot be traced by the appropriate authorities.
  • The goods may be government department or armed forces surplus stock due to being out of date or over stocked.

What type of goods are auctioned?

Just about anything can be sold at auction here are some examples

ANTIQUES
Furniture - Jewelry - Antiquities - Artifacts - Clocks & Watches

FINE ART
Paintings - Sculptures

COLLECTIBLES
Stamps - Coins - Books - Postcards - Medals - Print - China & Glassware - Memorabilia - Baseball and other sports cards - Autographs - Hunting & Fishing

LEISURE
Caravan & Camping - Marine - Aviation - Sports Goods

PROPERTY
Houses - Flats - Land - Commercial Premises - Warehouses - Workshops - Studios

HOUSEHOLD
Furniture - Appliances - Fridges - Freezers - Washers - Dryers - Electrical Goods - Hi-Fi's - T.V's. - Videos - Clothing - Carpets - Beds - Garden Equipment

CONSUMABLES
Foodstuffs - Wines - Spirits - Beers -

OFFICE
Equipment - Furniture - Consumables - Telecommunication Equipment

COMPUTER
Home Systems - Business Systems - Parts & Peripherals - Printers - Scanners - Modems

TRANSPORT
Cars - Vans & Commercials - Trucks & H.G.V. - Motorcycles - Vintage - Motor Parts

INDUSTRIAL PLANT & MACHINERY
Contractors Plant & Machinery - Engineering Machinery - Printing, Chemical & Fabric Equipment - Commercial Catering Equipment - Stock Materials - Scrap Materials & Equipment

AGRICULTURAL
Buildings - Machinery & Tools - Livestock - Vehicles

GOVERNMENT
Armed Forces - Government Department Stock - Seized & Confiscated Goods

How does an auction work?

When you arrive at the auction site you will need to register with the American Eagle Auction registration clerk in order to obtain a bidding number, the information required is usually your name and address along with proof of identity such as a valid drivers license or other form of positive identification. In certain cases, you may also need to pay a returnable deposit. You should be familiar with the registration requirements for the particular auction before you arrive in case a large deposit is required.

If you have not viewed the lots for auction prior to the auction day you will need to allow yourself time to inspect your prospective purchases before the auction starts if this is allowed, some auctions may not allow you to view the lots other than in the specified viewing dates and times, with some "catalogue" auctions you may not be allowed to view the lots after the auction has started. You should confirm these details with the auctioneers prior to the auction date.

When a lot you are interested in bidding on comes up for sale the auctioneer will announce the lot number ( either found in the catalogue next to the item or placed on the item during the viewing period ) and give a brief description of the item usually tied to the description given in the catalogue.

A starting bid will be suggested by the auctioneer and usually bidding will start below this price so do not assume the auctioneers starting bid is the lowest price available. If the item has a reserve price the auctioneer will often start the bidding above this price and reduce the start bid towards the reserve price until a bid is made. The auction catalogue will usually display a guide price for the item which is above the items reserve price.

You are free to start bidding at any time after the auctioneer has announced the starting bid. Some auctions especially liquidations, bankruptcies and receiverships have no reserve prices so give it a little time before you start your bidding, if there are no other bidders your first bid may be the price you pay.

If similar lots are listed together in the catalogue and you are the buyer of the first lot you may then have the option to purchase the similar lots at the same price as the first.

When bidding it is usual to get the auctioneers attention by raising your hand or making some other clear gesture to the auctioneer followed by the amount you wish to bid if different to the auctioneers announced price. Now you have started bidding the auctioneer will return to you every time the bid is against you to see if you wish to raise your offer, a clear shake of the head will indicate to the auctioneer that you do not wish to continue bidding.

Bids go up in steps controlled by the auctioneer and until the bid nears the assumed final price a bid of less than this amount will not usually be taken.

If your bid is the final bid and the price reached is above the items reserve price you have been successful in your purchase.

After you have won the bid you will have to pay an immediate deposit, the amount of deposit will be stated in the terms and conditions of the auction catalogue. The type of payment method i.e. cash, bank drafts, credit cards will be stipulated in the catalogue.

The amount of time given to pay fully for the purchase and clear the goods from the auction house will also be given in the catalogue.

Remember it is usual for the goods to be the responsibility of the purchaser after the hammer has fallen

If the items for auction are large, heavy or difficult to move, representatives of removal companies will usually be present, but this is worth checking with the auctioneers before you make your purchase.

Hot auction tips:

  1. Before travelling any considerable distance to the auction, you should obtain a catalogue of items to ensure the goods for sale are what you require.
    Certain auctions can be subject to cancellation at short notice and it is therefore a good idea to phone on the morning of the sale to confirm the sale is going ahead.
  2. You should inspect the items thoroughly as most auction items are sold without guarantees, if items are described as faulty check that the faults can be easily repaired, sometimes you can test the goods before the auction starts, ask the auctioneer if this is possible.
    Some motor vehicle auctions give you a period of time after the sale in which to return the vehicle if it is found to be faulty, again check this with the auctioneer prior to bidding.
  3. Think about setting yourself a price limit on the goods you are interested in and "stick to it", how much would the item cost new with a guarantee?
    Remember a "buyers premium" may be added to the final bid price at some auctions and local taxes may also be added to the price ( check the "conditions of sale" in the catalogue or consult the auctioneer before bidding )
  4. Catalogues are not set in stone and items listed can change.
  5. Listen out for any changes stated by the auctioneer in the description they give of the item at the start of bidding.
  6. If you bid for the wrong lot, tell the auctioneer immediately, although you have a legal obligation once you have won the bidding the auctioneer may present the item for auction again, but this is purely at the auctioneers discretion and you may have to make up any difference if the final price is lower than your original successful bid.

Know Your Auctioneer! Whether buying or selling, ensure your auctioneer is a member of a recognized professional organization where members are governed by stringent by-laws, a Code of Ethics and there is a grievance committee to resolve disputes. Furthermore, make sure you're auctioneer is certified through a professional auctioneering school.

Come to Watch ! There's no question that live auctions can be an exciting and rewarding experience. Furthermore, it's also a great learning experience which is fun for the whole family. Bring a friend, a date or just yourself!

Know The Difference! All auctions are not created equal! A vehicle auction proceeds differently from an antique or fine art auction. Even if you're familiar with a particular type of auction, if you plan on attending a different type it will benefit you to observe first, bid later!

Attend TheAuction Preview! American Eagle Auction Company has a viewing time the day of the auction. Inspect items of interest thoroughly -- most items are sold "as is, where is". This is your time to make the decision of whether you're interested in the item or not and how much you plan to spend

Be aware of the Rules! Policies of each auction house are posted or included in the flyers, catalog, website etc. .Study and know them by heart. Most auctions have a "buyer's premium" added to the final bid price.What forms of payment are accepted? Credit cards, checks, money orders, cash etc. If you're not clear about something, be sure to ask the auction company for clarification.

Research the Item(s) Do appropriate research on the items you plan to bid on. Many collectible items have variations to them. Knowledge is power and don't rely on the auctioneer to provide you with the in depth history of such items. The auctioneers role is to sell and your role is to know what you're bidding on.

Set your Price! It happens to the best of us. We get caught up in the competitive bidding frenzy and we loose control over our senses by sometimes bidding a little (or alot) more than anticipated. Once you're 'in' there's no backing out so stick with your prices.Keep in mind that taxes and/or buyer's premiums may be added to the final bid.

Listen To The Auctioneer! Prior to the start of bidding on each item, the auctioneer will call out the lot number and a brief description of the item. Listen for any changes from the catalog description (the catalog are a guide, not a guarantee!) Make sure the lot is the one you planned to bid on.

Jump Ship! When an item means a little bit more to someone else than yourself, then hold on to your wallet or purse and cease bidding. When the auctioneer looks at you for your bid, just shake your head 'no' so he's aware that you're no longer interested in bidding.

Check Out - When you're ready to leave the live auction. It's time to finalize your successful bids with the cashier. Now it's time to enjoy your exciting wins!

Now Go to Sleep! After reading all of this, you must be tired.

 

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This site is dedicated to the auction method of marketing and appraisal services in the state of Michigan by auctioneer Ken Lindsay of American Eagle Auction & Appraisal Company.

 

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