Auctioneer says it’s worth $40,000 and it sells for $25,000. Another auctioneer says it’s worth $10,000 and it sells for $25,000. Our first seller is disappointed, and our second seller is probably pleased — even though this property sold for $25,000 in both cases.
This has been going on since auctions began — some things sell for more than estimates, and some sell for less than estimates. It’s the nature of “an opinion” being different than a fact. These “estimates” are sometimes provided by the auctioneer, or the seller does his own estimate.
Our disappointed seller here probably tells people about his disappointment. Auctioneers hope our happy seller here tells people about his satisfaction; however, most say bad news travels more freely.
We’ve written about this concept many times and noted here that it doesn’t help the auction industry to have an estimate which is much higher than the actual value: https://mikebrandlyauctioneer.wordpress.com/2017/06/22/coming-in-waaaaaay-below-the-pre-auction-estimate/.
What can be done about this? What can auctioneers do to close this inevitable gap between what we think it’s worth and what it is actually worth (what it sells for?) Probably not much, although technology might assist us: https://medium.com/@danielpwest/the-singularity-and-its-impending-impact-on-the-auction-industry-376dd81120e7.
The risk of a low estimate is the seller either chooses not to sell or hires another auctioneer with a higher estimate. The risk of a high estimate is that the sales price comes in far lower, and the seller is disappointed.
For that matter, some buyers buy a $25,000 item at auction, only to find out it’s only worth $10,000 — and some buyers buy a $25,000 item at auction, and find out it’s worth $40,000.
It appears some auctioneers — in many cases claiming to be in favor of free speech otherwise — wonder if there’s a way to keep sellers from commenting publically if value far exceeds price (or buyers from commenting publically if price far exceeds value?)
The First Amendment, along with the Supreme Court of the United States, has tried to help our country understand what free speech is and what free speech isn’t. For instance, we should all know by now that actual malice is generally not a protected right of free speech.
Does complaining about price and value issues constitute actual malice, obscenity, or inciting violence? Rather, it seems it might be protected speech: https://mikebrandlyauctioneer.wordpress.com/2020/04/22/auctioneers-and-freedom-of-speech/.
In summary, there are often differences between value and price, and differences between what speech or expressions we auctioneers can prohibit and which we can’t. Even if we auctioneers get better with value and price, free speech will likely continue — unfortunately — to be evaluated by some in light of who’s speaking, rather than the speech itself.
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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