Auction FAQs

The auction method of marketing exposes a property to numerous pre-qualified prospects and creates competition among buyers – at times exceeding the price of a negotiated sale. The auction process creates an atmosphere of excitement and competition.

No, auctions can occur for a variety of reasons, and they are the primary method of selling valuable assets.

Traditional auctions are dwindling due to the convenience, profitability, and broader audience range provided by online auctions.

Keep the following tips in mind when participating in an auction:

• Understand the type of auction you are participating in (absolute, reserve, etc.)
• Review the complete terms and conditions of the sale
• Arrive early to register for the auction
• Certain auctions (i.e., real estate) may require a cashier’s check or other payment in advance of the auction to qualify you to bid

If you’re attending an auction with a live element, you will want to:

• Bid in sync with the chant
• Listen closely and follow the increasing bids. Remember, when the auctioneer repeats a number, that’s where the bid is and what they’re currently accepting.

During the auction, be sure to:

• Pay attention
• Remember your bidder number
• Keep your paddle with you at all times
• Evaluate the condition of the object you want to buy ahead of time
• Decide BEFORE the item goes on the block how much you are willing to pay
• Use eye contact to indicate that you are interested in bidding

A liquidation sale is the process of selling a company’s assets in an orderly fashion over a longer period to achieve higher values closer to market value. Auctions are often the opposite of liquidation sales in that they take place quickly from start to finish.

Yes, we encourage people to explore the world of auctions by attending one as a spectator. There’s no better way to learn about auctions than to watch one live.

If the Auctioneer is a member of the National Auctioneer Association (NAA), you may file a complaint in writing and submit it to the NAA Chief Executive Officer. For legal and financial recourse, you’ll need to file a complaint within the state where the auction company is located and/or where the auction was held.

For states that require an auction license, the licensing board is the first place to start. For all states, we recommend contacting the Consumer Protection Division of the Attorney General’s Office as well as local city, county, and Better Business Bureau offices.

The person you see and hear working amongst the crowd of bidders is known as a ringman. This individual is part of the auction team and is an extension of the auctioneer. The ringman’s job is to convey bids back to the auctioneer from the crowd.

When bids are received from the crowd, the ringman yelps to signal the auctioneer that they have received a bid and to increase the bid amount. These individuals are also there to help answer questions during the event.

The art of perfecting the auctioneer’s cry takes years of practice, but understanding what auctioneers are saying is simple. The auctioneer’s bid call can be broken into two parts:

• Statement (the current bid) – I have five dollars.
• Question (the next bid) – Would you bid 10?

Example: I have five dollars. Would you bid 10, would you bid 10? Now 10, I have 10 dollars, would you bid 15…

The cadence, repetition, and use of “filler words” vary from one auctioneer to another, but the format is usually the same. Always remember that the number the auctioneer keeps repeating is the dollar amount they want.

We hear this misconception a lot! In fact, to bid at an auction or for your bid to be received by the auctioneer, you typically need a bid paddle or bid card. You’ll receive this bid paddle or card upon registration, and it’ll have a number on it.

This number allows the auction company to know who’s bidding from the list of registered bidders. If you mistakenly bid or the auctioneer misinterprets your movement as a bid, immediately notify either the auctioneer or their staff.

Prospective bidders should read all documents regarding the sale before the auction. Cash payment is commonly not required at auctions. Auction companies may accept multiple forms of payment (cash, check, or credit card). When attending real estate auctions, auction companies may, at times, require a specific down payment on-site in the form of a cashier’s check to qualify as a bidder.

This is a major misconception about auctions. The fact is auctions are the primary sales method when selling valuable assets such as vintage vehicles, multi-million dollar homes, and priceless pieces of art.

The competitive bidding of an auction and the back-and-forth of prospective buyers sets the price and market value of an asset. The item won’t sell for more than the highest bid and won’t sell for less than the high bid. You, the consumer, and other bidders determine the market value of an item when you buy at auction.

Absolute Auction: An “absolute auction” is an auction in which the property is sold to the highest bidder. No minimum or reserve price must be met to complete the sale.

Reserve Auction: A “reserve” auction means that a price has been set between the seller and the auctioneer that must be met to complete the sale. Reserves are often used to provide the seller with security that they receive a certain amount of money to meet their sale goal.

A buyer’s premium is commonly used in auctions today as payment for the auction company conducting the event. It’s an advertised percentage of the high bid or flat fee added to the high bid to determine the total buyer’s contract price.

One of the most common statements made at auction, “as is, where is,” simply means the property is being sold without warranty and that there are no contingencies based on the status of the asset being sold. You must inspect all auction properties before you bid, both real estate and personal property.

Photos may not show all the details or potential faults with the asset, and it’s your job as a well-informed bidder to thoroughly inspect and know what you’re bidding on BEFORE the auction begins. Once you bid and buy an asset at auction, you are the new owner.

First, register with the auction company. To do so, you’ll be asked to show proper identification and may be required to verify that you have certified funds or cash in your possession. You must register at each auction event.

Once registered, you’ll receive a paddle with a bidder number. If you would like to place a bid on an item at any point during the auction, simply lift your paddle in the air and ensure the auctioneer or ringman sees you.

If you’re ever unsure whether your bid is the high bid, feel free to ask a ringman or auctioneer to confirm. The auctioneer wants to provide you with every opportunity to place your bid and won’t allow you to bid against yourself.

Yes, we encourage you to inspect the property before auction day to determine its conditions and what’s included in the sale. We especially recommend this for an “as is, where is” property. Bidders’ due diligence is important in auctions.

Photos may not show all the details or potential faults with the asset, and it’s your responsibility as a well-informed bidder to inspect and know what you’re bidding on beforehand. Contact the auction company and inquire about times when open houses will take place and any paperwork available on the property.

Step 1: Inspect the items or property prior to bidding.

Step 2: Get there early. This will enable you to get a good position, help you see the auctioneer, and ensure the auctioneer sees you.

Step 3: Pre-register and get a bidding number.

Step 4: Be clear when making bids. Call out, put your hand up, flash your bidding card, etc.

Step 5: Have transportation ready or be prepared to pay for delivery.

Minimum bids are routinely used at auctions to provide prospective buyers with an initial price range of where the bidding will begin. If an auction has a “minimum bid” of $50,000, prospective bidders will know that the auction will start with an opening bid of $50,000 and that the asset won’t sell for anything less.

Often, auctions are advertised with an “opening bid,” but this shouldn’t be confused with a “minimum bid.” An “opening bid” simply means a price at which the bidding opens.

While Saturday remains the most popular day for auctions, new data shows early morning events achieve a higher clearance rate than those held later in the day.

If it is an absolute auction and there’s no reserve on the item, then legally, it must be sold or bought back.

If absolutely no one shows up or registers for the auction, then all items will be passed on, and no sales will occur. As a reputable auction company, we at Schneider Industries, Inc. do our due diligence to market to the right prospective buyers.

The risk in a private sale is setting a price. If the price is set too high, the market will not respond. In many cases, the property will not even get an offer.

If the price is too low, someone will buy the property, and the seller will never know how much was left on the table. The only way for the buyer and seller to know for certain if they’ll either respectively pay or attain true market value is for the entire marketplace to decide through a competitive bidding process with no artificial restraints. The final price may be higher or lower than anticipated, but if conducted properly, auctions will attain true market value for the buyer and the seller.

Some auction firms believe that multi-property auctions are wonderful for selling several different properties in a short period for much less expense. The property owners usually pay a much smaller upfront advertising budget since the advertisements usually involve all the properties together.

The auction is typically conducted in one spot, utilizing a slide projector to show the properties on a screen when they are sold. Many properties are sold very quickly with relatively little expense.

Other auction firms concentrate on attaining market value. This process takes longer since only one property is sold on a given day at the subject property site, and usually, all the advertisements in that particular market focus only on that property. Since the firm concentrates on that one auction in this type of sale, there’s time to solicit the market in addition to the auction advertisements personally. The advertisement cost is higher, and the time is longer, but the results are usually much different.

Some of the advertising expenses associated with auctions include four-color flyers, newspaper advertising and trade publications, direct mailing to specific groups, signage, internet and social media, radio and cable TV, MLS if using a realtor, telemarketing, and press releases.

If you are considering an auction for your personal or business assets, consider the following tips: