We recently wrote about the 10 things to know when attending your first live auction here:
Relatedly, for everyone who’s ever looked at an online auction, there’s that first time. I think my first time was probably around 1999 or so when I bid on and purchased something on eBay.
Some don’t consider eBay an auction but that’s not our point today, and rather, that eBay exposed the world to online auction commerce on September 5, 1995 with the sale of that broken laser pointer for $14.83. Today we discuss 10 (ten) things to know when bidding on your first online auction:
Check the website for registration requirements, start time, preview opportunities, payment terms, “sale order” and other material information. If you have a particular question, it’s best to ask before the auction commences and certainly, before the auction closes.
Are these lots (or which lots are) being sold with reserve or without reserve (aka “absolute?”) In a with reserve auction, lots can be withdrawn and not sold if the seller doesn’t like the high bid, where lots selling absolute must sell to the highest bidder if put up for auction and any bid is placed within a reasonable time.
Take advantage of any preview opportunity — and further look carefully at all the pictures, video and property descriptions. Many times property is being sold “as-is” and “where-is” meaning that you as the buyer may be responsible to note defects or imperfections prior to that property being sold — and if you are the buyer, you may not be able to exchange or return if later you decide you are unhappy with your purchase.
Check the terms and conditions to see if shipping is an option, and how shipping cost is calculated. Does the auctioneer ship or is a third-party shipper used? Who hires the shipper? As well, see if there is an option (or requirement) to pick up your purchase(s.) If picking up, how long do you have to pick up? Is loading assistance available? How exactly does property pick up work?
How does bidding work? Can you submit a “highest bid” and have the software bid for you? Can you bid in real-time? Is there an increment table dictating the minimum increase needed to outbid another bidder? Is the auction also being conducted live (thus simulcast) and if so, when is that live auction?
If you can submit your “highest bid” does the software keep that number confidential and not disclosed to anyone else? Can the auctioneer or others associated with the platform see what your highest bid is? Does the auctioneer or platform reserve the right to bid against you up to your highest bid? More importantly, will they?
What type of closing is being utilized? Hard closings essentially utilize a clock, and when the time reaches 0:00 the auction ends. Soft closings typically reset that clock when a bid is placed giving other bidders an opportunity to bid again. Is there a buy-it-now option?
Buyer’s premiums and sales tax. What charge — if any — will be added to your final bid price to constitute total purchase price? For example, if a 10% buyer’s premium is being charged and you bid $235 for your items, your total due will be $235 + 10% or $258.50. If a 7.5% sales tax is being charged, your total bill will likely rather be $277.89
What if the Internet goes down? What if the platform goes down? What happens if the software/platform has errors or related issues during the auction? In these cases, is the auction event canceled? Are closed transactions reset or undone? If you have difficulty bidding, who do you contact?
There are other — lesser common — types of online auctions including reverse auctions, penny auctions, dutch auctions, sealed-bid auctions, etc. Be sure to find out what type of auction is being conducted here and any unusual or particular important details.
Online auctions allow people to bid from the comfort of their home, office, or wherever they have Internet access. In most cases, personal property can be shipped thereafter. Plus as many auctioneers will tell you, you only pay one more bid than someone else was willing to pay — and have the chance (prospect) of getting a deal.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.
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