As more and more attention is focused on auction marketing, the public notes that sometimes property doesn’t sell at auction. For instance:
A large real estate firm is holding a ballroom auction of bank owned properties, and about 40% don’t sell after being put up for auction.
A collector car auction is held, and about every-other car is “no saled,” after being offered at auction.
An online auction is held, and nearly 60% of the items are not sold at the conclusion of the bidding.
Our question here is, “Why didn’t it sell at auction?”
It seems there are only four possible answers to this question:1. The reserve price (or seller’s expectations) were out-of-line, and/or in excess of market value.2. The auction was not exposed to the right bidders, or an insufficient number of bidders.3. The auctioneer/auction firm is not trusted or there is a substantial uncertainty about the auction.4. The property being offered has no value.
Let’s look at four examples:
A well-known and trusted auction firm based in New York is selling at reserve auction items from the Estate of Margaret Whiting (American singer.) The auction includes some of her jewelry, furs, and several vehicles from her automobile collection. The auction is publicized by nearly every news provider on television, radio and the Internet. Color brochures and catalogs are distributed to over 10,000 qualified bidders around the world. In a rare instance, several regional newspapers place the auction advertisement on their front page. Bidders are afforded the opportunity to bid live, by phone, via the Internet, or absentee. The “Whiting” auction takes place, and nearly 30% of the items in the auction do not sell. Why? We could hardly argue that there was a lack of marketing and/or exposure. Too, we’ve established that the auction firm is well known and trusted. It would appear the items in the auction do have value — so, is it fair to conclude that the reserve prices on those unsold items exceeded the market’s opinion of value? We think so.
A well-known and trusted auction firm based in Chicago is selling at auction items from the Estate of Fred Morrision (inventor of the Frisbee.) The auction includes an extensive tool collection in addition to many Frisbee-related posters, signs, and other memorabilia. All items are advertised to sell to the highest bidder, without reserve. Auction advertisements are placed in Chicago-area newspapers, and a email list is utilized; however, many of the email advertisements are returned, undeliverable. The “Morrision” auction takes place, and nearly 50% of the items in the auction do not sell. We’ve established that the auction firm is well known and trusted. The auction is advertised as selling to the highest bidder (commonly thought to be “without reserve.”) It would appear the items in the auction do have value — so, is it fair to conclude that there was a lack of sufficient marketing and/or promotion? We think so.
An auction firm based in Birmingham, Alabama is selling at auction items from the Estate of Anne Francis (American actress.) The auction includes an eclectic selection of antique and collectible furniture pieces, artwork and statuary. All items are advertised to sell to the highest bidder, without reserve. Auction advertisements are placed in over 200 newspapers across the United States. Local and regional news organizations talk about the auction on their local news programs, and the Internet is used extensively to promote the auction, including the ability for bidders to place bids online as the auction is ongoing. Over 15,000 direct-mail pieces are mailed to fans of Ann Francis from her fan club’s membership list; as well, another 5,000 emails are sent to those who have visited the Ann Francis museum or registered on her website. The “Francis” auction takes place, and nearly 40% of the items in the auction do not sell. We could hardly argue that there was a lack of marketing and/or exposure. Too, the auction is advertised as selling to the highest bidder (commonly thought to be “without reserve.”). It would appear the items in the auction do have value — so, is it fair to conclude that there was a mistrust or material uncertainly about the auctioneer or auction firm? We think so.
A well-known and trusted auction firm based in Reno, Nevada is selling at auction items from the Estate of Peter Yates (American movie director.) The auction includes his well-known and expansive collection of used school pencils — just over 750 items. All items are advertised to sell to the highest bidder, without reserve. Auction advertisements are placed in all major newspapers in the western-half of the United States; 10,000 color brochures of the used school pencil collection are distributed to a select mailing list of writing-instrument collectors and admirers. Live bidding will take place, with Internet bidding for those not onsite. A two-day preview of the used school pencil collection is held prior to the auction, with various news organizations in attendance, telecasting their 6 O’clock news from the auction location. The “Yates” auction takes place, and nearly 95% of the items in the auction do not sell. We’ve established that the auction firm is well known and trusted. There seems to be evidence of sufficient and appropriate marketing. The auction is advertised as selling to the highest bidder (commonly thought to be “without reserve.”) So, is it fair to conclude that most of these items in the auction do not have any value? We think so.
In summary, maybe the simplest way to remember why something doesn’t sell at auction would be that if something doesn’t sell, there must be a problem with the seller, the bidders, the auctioneer or auction firm, or the property itself.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.
Kommentare