The auctioneer has an auction. The final price doesn’t reach the reserve and is a no-sale. Yet, a buyer was found weeks — maybe even months — later (possibly due to the auction marketing,) and the property sold. So, would we conclude the auction worked? Maybe.
I would offer that this auction originally conducted didn’t have the key ingredients — proper marketing and the “prospect of a deal.” In fact, I know it didn’t as it was a “with reserve” auction allowing the seller to accept or reject the high bid (seller confirmation.)
The follow-up transaction with a single buyer amounts to not much other than a traditional listing, where the bidder/buyer makes an offer and the seller accepts. It might have saved time to list it traditionally, to begin with, thus saving the seller even more holding costs?
Nevertheless, possibly the prior unsuccessful auction signaled to potential bidders the seller truly wanted to sell — although a “with reserve” auction largely signals the opposite and is likely why the auction itself failed to find a buyer.
Some auctioneers say that all auctions should be “with reserve” to protect from a smaller than desired bidder pool. What these auctioneers don’t seem to grasp is a “with reserve” auction causes a smaller bidder pool. https://mikebrandlyauctioneer.wordpress.com/2023/05/17/reserve-auction-needs-reserves/.
This may well be why you don’t find a buyer that day and have to resort to private treaty negotiation thereafter — and by the way, this is the same no matter where you are in the United States and possibly anywhere else. Here again, proper marketing and the prospect of a deal are paramount for a successful auction.
Importantly, some highly unique properties are not suitable for live or online auction bidding, and rather a sealed bid process should be utilized. We explored this concept here: https://mikebrandlyauctioneer.wordpress.com/2017/03/07/is-accepting-sealed-bids-an-auction/.
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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