So, the question is: “Absolute auction, and can I cancel?” The short answer is “yes” despite what you are largely reading online and otherwise.
Absolute auctions [should] contain the seller’s “genuine intent to transfer to the highest bidder regardless of price” but the auction — for one — can be canceled (withdrawn) prior if there is no expressed (or possibly implied) “calling for bids.”
The law says that an absolute auction (independent of intent?) can be canceled both:
Before calling for bids
After calling for bids where no bid is made within a reasonable time.
Therefore until the auctioneer expressly or implies that bids (offers) can be made, or if no bid (offer) is made within a reasonable time after this invitation to bid, the property may be withdrawn, and the auction canceled.
Canceling (withdrawing) prior can possibly indicate that the seller/auctioneer didn’t have the genuine intent to transfer regardless of price. Although extraordinarily unlikely with only a few bidders registered (lack of marketing?) it is legal and prudent to cancel.
The other question remains — how long is “reasonable time?” It would likely be just long enough for any bidder to reasonably place a bid. Given the speed at which bids are normally placed once a lot is open for offers, this may not be much time at all.
It also appears to us that as the value of the subject property increases, this reasonable time may increase as well. No bid on a $10 item may only require a few seconds, whereas no bid on a $3,500,000 lot may require more time.
Some auctioneers argue that “with reserve” auctions are better since the seller/auctioneer can cancel the auction in case of a “less-than-market-value moment,” suggesting absolute auctions can’t be canceled. In fact, they clearly can.
We wonder if your property is demanding less than market value because it was not properly marketed, or maybe you just don’t believe auctions produce market value?
We and many, many other accomplished auctioneers believe with proper marketing, [absolute] auctions produce market value and reserve auctions deter bidders … maybe that’s why it’s extremely rare absolute auction lots are withdrawn.
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, Brandly Real Estate & Auction, and formerly at Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auction Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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