Say auctioneers were being sued in class-action lawsuits all over the United States (which is not happening.) What might our trade association say about it? They might say something like this:
Continue having transparent conversations with clients about the services you provide and how you get paid.
Continue using agency representation contracts.
Continue stressing to sellers that your fee is negotiable.
Continue to be loyal to your clients, putting them above your own interests.
Continue using your listing and bidder terms and conditions to help clients and customers understand exactly what services and value you are providing; and importantly, how much you charge.
Continue to stress to clients that your fee is not “free” without noting you’re charging a buyer’s premium in place of seller commission.
Continue focusing on your clients and serving them well.
Continue combating misinformation and provide the public information they can rely on.
The operative word here is “continue” suggesting this has always been the case. Yet, as we know — in this related industry — it hasn’t always been the case in any regard. #8 is particularly telling here.
This is the power of words and the power of suggestion. The hope is we can get all members to think and say that they have always done certain things, and as such will continue to do so. Would there be other lawsuits, appeals and many discussions regarding?
For auctioneers, it’s a good reminder: be honest with your seller and bidders/buyers, enter into written contracts with all parties when acting as an agent, serve your clients well including being loyal, and help the public understand we’re doing a good job as auctioneers.
This other industry has been plagued with:
Widespread standard [non-negotiable] commission rates (pricing fixing)
Mandatory cooperation directives (conspiring to increase seller costs)
Lack of disclosure (purporting to work for “free” but not, secretly increasing seller costs and property prices)
Only directing buyer-clients to properties with high cooperation incentives (market allocation, lack of loyalty)
A bait and switch scheme in that “my commission is x because I’ll have to pay the buyer agent,” and then there’s no buyer agent and the commission remains the same (misrepresentation, unjust enrichment)
Representing both parties in a transaction to maximize commission instead of serving the clients (lack of loyalty)
Advertising properties to a select group of unrepresented buyers to avoid cooperation with buyer agents [pocket listings, “coming soon”] (lack of loyalty)
I had to laugh a bit noting that member agents are to “continue” to do all these great things, when many in this other industry really haven’t done any of them before — and for that matter, may not even be doing them now. In stark contrast, the auction industry is a model of disclosure and client loyalty and we can indeed “continue to be.”
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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