I’m watching an online-only auction and see the note: “In the case of a tied bid, precedence is given to the earlier bid.” My first reaction is, in the case of a tie bid, there’s not, because we, of course, favor the earlier one?
My other question is: How does an online platform “accept” two bids for the same amount? Doesn’t software with a bid of $1,000 not allow another bid of $1,000 and rather only a higher bid?
In either case, this appears to be nonsense or the use of the wrong words to describe the situation. Maybe better said, “If you attempt to bid the same amount that’s already been bid by someone else …?”
For that matter, why say anything about this? If the current bid is $1,000 and I try to bid $1,000, the software should simply tell me I need to bid more, right? If not, why not?
Even in a live auction setting, with two bidders offering (bidding) the same amount, generally speaking, the first one received (recognized) is accepted, and the other is told that bid was “late” and any offer now must be more than the current bid.
In a simulcast auction (live and online) then the auctioneer may recognize a live bid while the software accepts the same bid. Typically here, the live bidder’s bid is accepted, and the online bidder must bid more, or vice versa if the online bid is communicated to the auctioneer first, then the live bidder is out.
Since bid calling creates contracts, once a bid is accepted, that contract is only contingent upon a higher bid or bidder retraction, plus seller-withdrawal if the auction is with reserve; there’s no contingency for an equal bid.
Yes, Kentucky has a law that addresses two bids of the same amount upon completion of the sale. We wrote about this mess in Kentucky here: https://mikebrandlyauctioneer.wordpress.com/2020/04/01/the-kentucky-tie-bid-mess/.
This tie bid discussion usually results in some saying the auctioneer should reopen the bid to resolve these so-called ties. We’ve recommended — along with others — that auctioneers should say, “Sold!” and mean it.
As we’ve noted before: Would a policy that “Sold!” means “Sold!” reduce the chance of litigation? It seems clear it would. In addition, here’s another worthy perspective noting not reopening the bid results in more for the seller:
… the integrity of the process and respect for bidders’ reasonable expectations is generally consistent with the goal of asset maximization, as most courts have found that the risk of an upset bid stifles aggressive bidding and ultimately results in lost value to the estate. James M. Peck, Attorney At Law
What’s my recommendation? Let’s stop talking about “tie bids” (especially when they clearly don’t exist) and stop reopening the bid when we think they somehow exist — for (at minimum) the integrity of the bidding process and otherwise to benefit our seller.
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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