We have conducted thousands of auctions, and taught auction bid calling techniques around the United States, and testified in several courts regarding how auction bid calling works.
Throughout our study, it’s abundantly clear the auctioneer invites offers and the bidders make offers. The only accompanying issue here is when the auction is “without reserve” or absolute, the auctioneer makes a collateral offer (promise) to the crowd to sell to the highest bidder.
For example, let’s just say an auctioneer is putting up for auction a car thought to be worth $35,000. Incidentally, we think it’s worth $35,000 because there are like-kind cars selling for about $35,000.
Given this car is worth about $35,000, and the current bid is $5,000, the next “ask” might be $7,500 or even $10,000 as we’re far from the expected final price. However, if the high bid was $30,000 it’s unlikely the auctioneer could get $75,000 for this car by simply asking $40,000, $50,000, or $60,000 …
If you wonder why that is, let me repeat, buyers looking for a car like this can find another one for about $35,000 so they aren’t going to pay $75,000 for this one via the well-founded principle of substitution.
Importantly, as we pointed out prior:
To just review this treatise’s overriding concept, this woman fishing isn’t putting the hook in the fish’s mouth, and rather the fish is biting the hook — when (and only if) it wants to, and every auctioneer should know this.” https://mikebrandlyauctioneer.wordpress.com/2023/01/26/apparently-little-known-bid-calling-basics/
For an auctioneer with a bid of $30,000, the next ask (suggestion) might be $32,500 or even $31,000 as we’re near the final expected price. This is a common technique in the United States and elsewhere.
Do some auctioneers bid for the seller and/or “run the bid?” They do, legally and illegally, but here again, it’s rare a bidder mindful of the value of this car could be convinced to pay $75,000 for it, no matter who the auctioneer claims to be.
Certainly, unique items are more difficult to appraise and estimates of value vary amongst bidders. Yes, auctioneers can be persuasive in their bid calling but here again, auctioneers can’t make any bidder bid anything — as we can’t bind people to contracts without their consent.
Consent (an agreement) is a central theme in bid calling and we wrote about some downfalls of bid calling without that in mind: https://mikebrandlyauctioneer.wordpress.com/2023/02/06/auctions-and-the-previous-bidder/.
Far too often, some auctioneers think they can talk fast and take bids at higher increments of their unilateral choice. Of course, they can claim to do this, but unless those bidders agree to those bids being made for them, they aren’t really bids, and rather just noise.
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 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 Auctioneers 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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