It would be extremely rare to go to an auction and find something which has not already been sifted out, like gold, from the process of public bidding. A diamond ring for example, would not find it’s way into a box of costume jewelry to await your low bid and subsequent windfall. A Chippendale table would never have missed the scrutiny of the auctioneer.
That’s not to say they would expropriate it for themselves, but that they would know to make more suitable arrangements for it’s sale. Not at a small budget auction at any rate.
We all go to an auction with the hope of picking up a bargain. Subconsciously we assume that we might well take advantage of someone else’s misfortune. After all, surely the reason for the auction is that someone died, as in an estate sale, or they have gone bankrupt and the trustee is clearing out any recoverable assets.
As an auction addict, my experience has shown that items are rarely sold for less than fair market value and most often are sold at prices exceeding full retail. Bear in mind that some items are quite often used to the point of discarding.
Auctions always start with a disclaimer from the auctioneer. This is usually done over the hubbub of the crowd, who have yet to settle down, on a megaphone which invariably squawks feedback at ear piercing levels.
The items to watch for are:
Items are sold as is - where is
This means that once you buy it, it’s yours. They don’t care if it doesn’t work or it’s defective, or it gives off the stench of decaying flesh when exposed to sunlight. You are given the opportunity to examine the items prior to the sale. This period is usually about an hour before bidding starts and permits you to examine about five hundred items for suitability, functionality, current retail price, structural soundness, wear and tear and desirability.
At one auction of a bankrupt plumbing and heating business I got into conversation with a former employee who had come to bid on known specialty items for his new business. He informed me that the forty odd fireplace inserts which were selling madly at about 70% of retail had in fact been units which, while looking new, had in fact been removed from homes due to a factory recall rendering them unsafe, uncertified lawn ornaments with no residual value. Having almost bid for one myself, I congratulated myself for not going over my limit.
Who am I kidding, I would likely have bought two there was so much excitement over the shiny brass boxes which promised warm winter nights.
No claims are made regarding authenticity or provenance
The last thing you want to assume is that something sold at an auction is either real, rare, antique, limited, valuable or unique. Chances are just as great that there is a continuous supply of these items being produced in the Far East in such quantities and low cost that Mother Earth can barely keep up with the demand for raw materials.
Now sure, at a Sotheby auction you get guarantees, but if you are willing to pay hundreds of thousands of dollars to be guaranteed you’re getting something as useless as a real Munroe dress from her teen years, it doesn’t matter if it’s real, you are no better off.
No reserve bids
The individual or organization which sponsors the auction quite often will want to cover their bets by placing a reserve or minimum bid on certain items to ensure that an item is not sold for less than what they think they should get for it. You, as a bidder, do not know what this minimum threshold is prior to bidding. You might sweat buckets in the process of overbidding someone only to be told you didn’t get to the items asking price. It is then taken out of the auction to be returned to the owner. When reserve bids are in place you can be assured that they are not giving anything away at that auction.
I’ve been to auctions where upon winning a bid I’ve come to the belated and unproven suspicion that the person who owned the item, or his agent, was in fact bidding against me to up the price. The auctioneer with his rambling, indecipherable motions always ensured that I ended up winning and not the fake participant.
Is this unfair or illegal, I don’t know. Unethical, definitely. Yet to prove it you would need to videotape the affair and identify the participants. The last thing I’d want on tape is my foolishness as a bidder.
Some items offered by auctioneer:
To increase their revenue, auctioneers will almost always have goods available which they have acquired for sale. These items have either been purchased at wholesale prices or bought at larger auctions where they have participated as bidders rather than from the podium.
Knowing they have a large enough market for such items they can buy a truckload at a good price and resell it over the period of a few auctions. This is noticeable when the items don’t seem to fit the occasion of the event or are brand new. Keep an eye out for things such as tools, lamps, pictures, collector items and memorabilia.
Auctioneers fee on items sold:
In addition to taxes on purchased items, it is becoming a practice to charge a 10% fee on top of the items bid to cover the auctioneers fee. In the past, this was taken off the total sales and paid by the auctioneers client. Not taking this into consideration prior to bidding can end up skewing your concept of a good deal.
Items must be removed within 12 hours:
Sometimes the item you’ve bid on is so cumbersome, heavy, large or complex that you would need a crane, a crew of twenty, a transport with a float and three weeks of overtime to get it off the premises. If you can’t get it home in your car or one trip of a borrowed pickup you’d best pass on such a deal. Broken down bulldozers for $100 are not a good deal any more than trying to convert a $50 satellite dish into a twenty foot bird bath.
How to bid:
You are given an itemized list of bid items with lot numbers upon registering for the auction. It is up to you to evaluate the items as you quickly circle the room. The time to make decisions is before the bidding starts, definitely not after. Limit yourself only to items that you would buy if they had the right price tag attached. Pick a price, at least half your estimated retail guesstimate, and write it next to the item. If you never bid over this figure you will not likely acquire any items, but you will have fun watching others overbid.
To create a frenzy of bidding, auctioneers will almost always get the ball rolling by taking a reasonably useful item and practically ensuring it is given away quickly to one of the first bidders at a low, low price. It happens quickly before anyone is prepared to start bidding. They know that you are naturally apprehensive to raise your hand at the start. You want to watch for a while to get a feel for it. Bang! It’s gone.
What a great deal they got! What a great idea coming to this auction. I’m going to get some neat stuff. But now I have to bid. No problem. I’ll just slightly overbid the next low bid. You look craftily around and notice all these squinty, shifty eyes slowly scrutinizing you in return. The competition begins.
It really is amazing how itchy your head gets when you go to an auction. You are forever wanting to scratch your nose, pull on your ear and reach for the top of your head. If these motions haven’t got you into the bidding, you will try removing grit from your lower eye lid or wave to your friend who just arrived. Soon you, by your bid number, are known as a big spender, someone to watch for even the slightest twitch.
The auctioneers staccato bursts of meaningless numbers might well be a foreign tongue. You think you are bidding a low amount only to find it spoken unreasonably high. You can’t interrupt to reduce it to your intended amount for as you raise your hand to politely interject the bid grows in leaps and bounds.
The caller’s assistants add to the bedlam with their own shouts and accusational pointing, almost as if a child molester is being singled out among the crowd, a prime candidate for lynching..
You try sitting on your hands, but your emphatic head shakes of rejection are accepted as an obscure code of doubling your bid. The gavel bangs and someone across the room takes the item you were sure was destined for the end of your driveway.
After anyone wins a bid you will hear the whispers of those who can’t believe someone would pay that much when the items are on sale for less, brand new, down at the mall. You never hear it when you win the bid though, because the blood is still rushing through your head.
Never bid on something that you haven’t pre-marked on the lot listing. If you didn’t want it at a good price you won’t want it at any price.
What about when it’s such a good price that you just can’t let it go by without bidding? I hesitate to tell you the stupid things I’ve bought that were so big and useless that I still shake my head. I’ve had display stands which couldn’t fit into my house even if my wife let me. I was pleased to pick up a dozen jeans her size until she showed me they where imbedded with an elastic material that made bending an exercise regimen.
What I just missed out on was a mainframe computer from the eighties that must once have cost over a million and sold for $1200. Quite the conversation piece in your den.
Sometimes two of a good thing ends up being twice a bad deal. You think yeah, I’ll sell one to pay for the one I really want. Notice I didn’t say need. Trouble is, if it was something that was easy to sell it wouldn’t end up in an auction in the first place and who’s going to pay retail for something not sold in a store.
Quite often an item at an auction looks really good simply because it is surrounded by crap. However, when you put it in a more affluent environment such as your home it now becomes the inferior object. A dim reminder of your weaknesses.
You will be surprised how your purchases add up to not individual deals but to the great sum of money you spent at the auction. You want to burn the individual slips and average out the losers with the winners. Better yet, forget you even bought that overpriced derelict item and tell your friends what a great deal you got on a limited edition Gretsky signed hockey puck (limited to 5 million copies).
Don’t plan on skipping out on your purchases if you end up with buyers remorse. You will find out very quickly that the pre-auction registration form you filled out obligates you more than your home mortgage. Don’t expect sympathy either. I tried it once when I walked into the back room after the auction. Watching them stack cheques and cash into mountainous piles belied the concept of misfortune for the estate. In this high stakes game of purchasing poker I was presenting myself as a welcher, the lowest form of insect that would have to be squashed if necessary. It was easier to pay and learn a lesson than attempt to renege.