Auctioneers typically selling property online conduct an auction with a “soft close” As such, if a bid is placed near the end of the time allotted, the time provided for another bid is extended.
In other words, whenever a bid is cast in the last few minutes, the auction is automatically extended for an additional time from the moment of the latest bid. This ensures that an auction can’t close until “x” ‘bid-less’ minutes have passed.
For example, a truck is listed for sale in an online auction. The bid is $62,500 and the auction is set to close at 1:15 pm. At 1:14:42 a bid for $63,000 is placed and a new closing time is set for one minute later (1:15:42). Another bid of $63,500 is placed at 1:15:31 and yet another new closing time is set for one minute later (1:16:31).
In this above example, this truck will only sell if there is 1 minute of bid-less activity. If a bid is placed within this minute extension, another minute is added to the clock.
We would call this closing a 1-1 system, where in the last 1 minute up to the end time if a higher bid is placed, the end time is extended 1 minute from the time of that previous bid, and only if 1 minute goes by with no bids (1 bid-less minute) is the auction closed.
Similarly, in a 1-2 system, where in the last 1 minute up to the end time if a higher bid is placed, the end time is extended 2 minutes from the time of that previous bid, and only if 2 minutes go by with no bids (2 bid-less minutes) is the auction closed.
As any experienced auctioneer can tell you — a sense of urgency is emotion bidders typically react to, and live auctions have used this urgency to their seller’s advantage for centuries. It would seem online auctions should use this same strategy.
Therefore, giving bidders too much time to think often results in negative thoughts. In contrast, little time to think and pressure to react (urgency) more often results in positive (or mindless compliance) thoughts.
It is important to note that online auctions have more distractions than live auctions — from other lots closing to even other auctions taking place elsewhere. Is more time needed so they can deal with distractions and still bid?
We would hold with less time, these bidders won’t be as distracted, and will pay attention to this particular lot in hopes of winning. Again, urgency plays an important role in “focusing” bidders on the task at hand.
We wrote in 2012 that at that time, some auctioneers selling via online platforms were touting the platform’s ability to allow the bidder more time to think. Yet, live auctions often touted the lack of time as an advantage. https://mikebrandlyauctioneer.wordpress.com/2012/05/01/auction-atmospheres/.
Analysis from 2020 showed that research suggested 37% of online lots had bids in the last minute and 12% of lots had bids in the last ten seconds. https://mikebrandlyauctioneer.wordpress.com/2020/05/16/online-timed-auctions-and-later-bids/. Even if we give bidders more time to bid, they often wait.
How many additional bid-less minutes should you allow at the end of your auction before you close that lot? We think anything over 2 minutes is too long regardless of personal or real property and the value, and 1 minute might be about right for any property whatsoever.
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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