When I first entered the auction business (1982) I was only familiar with what my employer (Jack B. Smith, Auctioneer) considered “customary practice.” I believed whatever Jack said was the “right way to do things …” because I wasn’t aware of any other practices.
However, since starting my own auction company, and securing jobs outside of my “own back yard” I have seen lots of different ways auctioneers operate all over the United States. Sometimes I observe procedures I believe are correct, while others I question.
Auctioneers have been a bit slow to change from “We’ve always done it this way” to “Let’s try this new thing” including using a sound amplification system, charging a buyer’s premium, and selling online — just name a few. Let me say it again … “We’ve always done it this way” is a powerful motivator.
However, the major change in the auction business in the last 25+ years is the Internet. The Internet has allowed bidders/buyers and even sellers to find almost every auctioneer outside of their local marketplace.
As a result, every auctioneer’s marketplace is worldwide because there are bidders worldwide. Because of this many auctioneers have sought to standardize their procedures in the various states they work in, so those bidders rightly have a consistent, predictable experience.
I’ve been blessed to travel all over the United States to discuss the auction industry. What is remarkably consistent state to state is (including, but not limited to):
[NAA says] auctions are enjoyed because they are “fun, fast, and transparent.”
The Uniform Commercial Code (UCC § 2-328) sans Louisiana.
Contract law regarding bid-calling, warranties, disclaimers, etc.
Agency: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care.
Buyer’s premiums are accepted by the public.
Online bidding is established as an acceptable way to bid.
Bidders are induced by the “prospect of a deal.”
Bidders engage better with more disclosure.
For a more comprehensive list of “basics” for every auctioneer in the United States, we recently wrote about that here: https://mikebrandlyauctioneer.wordpress.com/2024/03/12/25-basics-for-every-auctioneer/.
However, you claim, for example, in your “market” state law and contract law don’t apply, buyers won’t pay buyer’s premiums, bidders are endeavoring to pay as much as they can, and prefer less disclosure or less transparency, I’m here to tell you that you are incorrect as nowhere in the United States is this true.
In fact, we wrote about your online auction and the expectations of bidders which appear to be equally consistent worldwide: https://mikebrandlyauctioneer.wordpress.com/2024/02/23/grading-your-online-auction/.
Of course, property varies and sellers have different needs and problems to solve so auctioneers rightly model their offerings to assist clients in a variety of ways. These solutions can be customized, but if counter to our list above, we hold it ill-advised.
Most notably, I underlined above transparency, the prospect of a deal, and disclosure which are nearly universal facts that help auction sellers in all markets. By properly inducing the buyer to participate, and disclosing as much as possible, bidding is heightened.
Yet, some auctioneers tell me neither is a good idea, hiding key information. As such, there isn’t any proclaimed or implied prospect of a deal, and bidders don’t really know if the seller has any intention to sell or not. They falsely claim this lack of disclosure and transparency helps their seller.
Is property only worth what someone is willing to pay for it in only certain markets? Does starting with a smaller opening bid result in a higher final bid in only certain markets? Do auction prices result in market value in only certain markets? Of course not if your marketing is adequate.
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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