The contest is made up of both bid calling as well as interview questions. For the auctioneers who enter the contest, there is a panel of judges watching every move and listening to every word.

We have written about the interview questions twice thus far:

• http://mikebrandlyauctioneer.wordpress.com/2011/07/17/the-naa-iac-final-round-questions-11/

• http://mikebrandlyauctioneer.wordpress.com/2010/07/17/the-naa-iac-final-round-questions/

In regard to the actual bid calling, here is what the contestants are (or at least have been) judged regarding:

Presentation

• Introduction (5=Excellent, 4, 3, 2, 1=Poor)

• Initial Command (5=Excellent, 4, 3, 2, 1=Poor)

• Overall Appearance (5=Excellent, 4, 3, 2, 1=Poor)

• Poise (5=Excellent, 4, 3, 2, 1=Poor)

Chant/Voice

• Voice Control (pitch/breaking voice) (5=Excellent, 4, 3, 2, 1=Poor)

• Clarity (10=Excellent, 8, 6, 4, 2=Poor)

• Speed (too fast, too slow) (10=Excellent, 8, 6, 4, 2=Poor)

• Rhythm (10=Excellent, 8, 6, 4, 2=Poor)

• Voice Expression/Use of Filler Words (10=Excellent, 8, 6, 4, 2=Poor)

Effective Auctioneering

• Article Description (5=Excellent, 4, 3, 2, 1=Poor)

• Eye Contact / Scans Audience (5=Excellent, 4, 3, 2, 1=Poor)

• Body Language (5=Excellent, 4, 3, 2, 1=Poor)

• Holds Attention of the Audience (5=Excellent, 4, 3, 2, 1=Poor)

• Says “Sold” at Conclusion of Bidding (5=Excellent, 4, 3, 2, 1=Poor)

• Salesmanship (10=Excellent, 8, 6, 4, 2=Poor)

As can be seen, if a contestant scores the highest possible on each category, his or her score is 100. The actual score sheets also leave room for the judges to comment about the performance if they wish.

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.

Dick’s thought regarded maximizing absentee bids and that practice in relation to the UCC 2-328.

As we discussed in our story about maximizing absentee bids, virtually any policy or procedure in regard to absentee bids is acceptable if all involved (seller, bidders, buyer) have knowledge of it, and consent to it.

However, too often in some markets, the absentee bidder leaves a bid to be executed as, “I’ll bid as much as $1,500,” when the bid is actually executed as, “I’ll bid $1,500.”

Dick suggested that the UCC 2-328 proposes a remedy for the, “As-much-as $1,500 bidder” when he becomes, “The $1,500 bidder.”

The UCC 2-328 (4) says:

“If the auctioneer knowingly receives a bid on the seller’s behalf or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at his option avoid the sale or take the goods at the price of the last good faith bid prior to the completion of the sale. This subsection shall not apply to any bid at a forced sale.”

Dick asserted that if the absentee bidder was “run” by the auctioneer up to his maximum absentee bid without notice, that the auctioneer’s bidding could be construed as the seller bidding (the auctioneer bidding for the seller’s behalf) and that the buyer at $1,500 could then void the sale, or take the item at the “last good faith bid.”

I might add here, that “notice” in regard to the seller bidding would necessarily include notice to the absentee bidder as well as the other bidders.

In other words, given the auctioneer had this $1,500 absentee bid, and suggested to his crowd (or bid online under a different identity) that he “had $400 bid, and now $500, now $600, now $700, now $800, now $900 … Sold! for $1,500,” that the buyer at $1,500 might rightly void the sale.

In the case of any legitimate bid being placed, such as a $700 bid from some other bidder than the seller — with the genuine intent to purchase — that the buyer at $1,500 might rightly take the item at $700 — the last good faith bid.

Further, it’s worth noting that if the auctioneer bid for the seller at some price less than the $700 legitimate bid that it’s more likely even the $700 bid is not the last good faith bid. We discussed that topic here: Last good faith bid?

As well, Dick correctly suggested that the seller (or someone on behalf of the seller) cannot bid at a without reserve auction (except in a forced sale situation,) and therefore seller bidding against the absentee bidder to the bidder’s maximum bid would be prohibited by the UCC 2-328.

We would conclude that in addition to unethical (and therefore illegal) activity involved in running the bid without knowledge and consent to the absentee bidder’s maximum, that state law actually provides relief for that harmed absentee winning bidder.

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.

Nebraska Unicameral Information Office

Such confusion came up in the Nebraska statehouse recently, and made for an interesting analysis.

The UCC 2-328 (3) says (in part):

“In an auction without reserve, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time.” which clearly prohibits the seller from bidding because seller bidding constitutes a withdrawal.

The UCC 2-328 (4) says (in part):

“If the auctioneer knowingly receives a bid on the seller’s behalf or the seller makes or procures such a bid, and notice has not been given that liberty for such bidding is reserved, the buyer may at his option avoid the sale or take the goods at the price of the last good faith bid prior to the completion of the sale.” which suggests the seller may bid without consequence with adequate notice.

The Nebraska legislature was apparently considering that by looking at the UCC 2-328 (4) that a seller could bid at a without reserve auction with adequate notice, giving no regard to the UCC 2-328 (3)‘s prohibition of such.

While this type of analysis is not new, nor unique to Nebraska, it is concerning.

Auctions are by default “with reserve” and seller bidding is indeed permitted with notice. Yet, if an auction is explicitly noted as a “without reserve” auction, then no reserves can be present — including the seller bidding in person or by proxy (unless in a forced sale situation.)

This particular confusion was a result of a proposed bill (http://nebraskalegislature.gov/FloorDocs/Current/PDF/Intro/LB843.pdf) which is/was attempting to regulate online without reserve auctions, providing remedy for bidders who suffer from seller bidding.

Of course, as we’ve noted, Nebraska already has a remedy for such situations — it isn’t allowed per http://nebraskalegislature.gov/laws/ucc.php?code=2-328

We’ll be keeping an eye on this legislation, as are many others.

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.

“Where a bid is made while the hammer is falling in acceptance of a prior bid …”

meant that somewhere between the “S” and the “D” of the word, “Sold!” denoted the start and end of the hammer falling.

Given this interpretation, if a bid comes in prior to the “S” [which normally would be accepted] or after the “D,” the auctioneer has no option to reopen the bid; however, if a bid is made while the hammer is falling — after the “S” and before the “D,” the auctioneer may reopen the bid.

Our question today involves, “When does the hammer start to fall?” In other words, does the “S” essentially denote the start of the hammer falling?

It seems fair to assume that the drafters of the UCC 2-328 addressed this issue in particular for a reason.

If an auctioneer was “in the midst” of saying, “Sold!” it would be reasonable to assume most auctioneers could both recognize a bid in that split second, but not be able to stop saying, “Sold!” Therefore, a remedy was provided.

However, this isn’t a universal view. As we’ve previously noted, the famous auction case Hoffman v. Horton, 212 Va. 565, 567, 186 S.E.2d 79 (1972) ruled that an auctioneer may reopen the bidding if a bid was made “prior to or simultaneously with the falling of the hammer.”

I’m not convinced the Virginia Supreme Court ruled in conflict with the UCC 2-328 in any other fashion than to move when the hammer starts to fall. It would seem the Virginia case suggests the hammer essentially starts to fall at the beginning of the auction.

While this isn’t our subject today, the UCC 2-328 in talking about bids, uses the word made rather than recognized or received. In Hoffman v. Horton, the Court ruled that a bid made (and not recognized nor received by the auctioneer) could be accepted after the hammer fell.

One problem — of many potential problems — with assuming the hammer starts to fall at the beginning of the auction (for that item/property) is that then any completed sale could be reopened by anyone claiming to have made a bid anytime between the opening of the item/property … all the way until the “D” is uttered.

I wonder conceivably if an auctioneer said, “Folks, I’m about to drop the hammer …” that such an announcement would signal an actual start to the hammer’s fall? In other words, could an auctioneer expressly delay (or move up) the start of the fall until a moment of his or her choice?

It seems unlikely the UCC 2-328‘s drafters meant anything other than the hammer falling in essence at the “S” of the word, “Sold!” They were certainly familiar with the concepts of “calling for bids,” “reasonable time” and “completion of the sale,” as used elsewhere in the UCC 2-328.

When does the hammer start to fall? It seems when the hammer begins to descend, or at the utterance of the “S” of the word, “Sold!” or other similar moment, unless the auctioneer expressly overrides this custom.

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.

In the latter, auctioneers must correctly calculate seller commissions, sales tax and buyer premiums — both when reconciling with bidders and when settling the auction with the seller.

Among questions I often hear when I’m teaching auctioneer continuing education or at auction school include two about this topic:

1. Is sales tax charged on the hammer price or the hammer price + the buyer’s premium?
2. Is seller commission charged on the hammer price or the hammer price + the buyer’s premium?

We’ll address these questions by using several examples. In these scenarios, the base numbers are as follows:

• The item’s hammer price is $1,000

• Sales tax is 7%

• Buyer’s premium is 10%

• Seller commission is 15%

Case #1 Seller commission, with no sales tax nor buyer’s premium:

• Buyer pays $1,000
• Seller nets $850
• Auctioneer earns $150

Case #2 Buyer’s premium, with no sales tax nor seller commission:

• Buyer pays $1,100
• Seller nets $1,000
• Auctioneer earns $100

Case #3 Sales tax (with no other charges):

• Buyer pays $1,070
• Seller nets $1,000
• Auctioneer pays $70 to state or local taxing agency

Case #4 Seller commission with sales tax, with no buyer’s premium:

• Buyer pays $1,070
• Seller nets $850
• Auctioneer earns $150
• Auctioneer pays $70 to state or local taxing agency

Case #5 Buyer’s premium with sales tax, with no seller commission:

• Buyer pays $1,177
• Seller nets $1,000
• Auctioneer earns $100
• Auctioneer pays $77 to state or local taxing agency

Case #6 Seller commission with buyer’s premium, with no sales tax:

• Buyer pays $1,100
• Seller nets $850
• Auctioneer earns $250

Case #7 Seller commission with buyer’s premium and sales tax:

• Buyer pays $1,177
• Seller nets $850
• Auctioneer earns $250
• Auctioneer pays $77 to state or local taxing agency

All these calculations assume that the auctioneer does not charge seller commission on monies earned as buyer’s premiums nor sales tax.

For example:

If the seller commission is applied to the total the buyer pays inclusive of the buyer’s premium, the seller’s net is reduced by 1.50% (0.10×0.15).

If the seller commission is applied to the total the buyer pays inclusive of sales tax, the seller’s net is reduced by 1.05% (0.07×0.15).

If the seller commission is applied to the total the buyer pays inclusive of the buyer’s premium and sales tax, the seller’s net is reduced by 2.655% (((1.10×1.07)-1)x0.15).

These three preceding examples show what I think would be unusual charges if they took place. However, if the auctioneer and seller contracted as such, with the auctioneer having the seller’s knowledge and consent of this manner of charging seller commission, then it would be acceptable.

Regardless of how seller commission, sales tax and buyer’s premiums are calculated, auctioneers, clients and customers must all have knowledge of — and consent to — the exact manner in which they are in order to properly play their role in auction settlement.

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.

Sometimes he buys things and makes money, and other times he buys things and loses money.

Cory assumes a risk when he buys something — as there is not a guarantee he will profit.

Valerie likes going to casinos. She plays blackjack, craps, roulette, and other games by paying a fee, and hopes she comes away from the game with a profit. Sometimes she plays games and makes money, and other times she plays games and loses money.

Valerie assumes a risk when she plays — as there is not a guarantee she will profit.

We ask this question as there is a current lawsuit filed in the United States District Court, Northern District of Illinois alleging that Penny Auction sites violate all 50 state’s laws prohibiting unauthorized gambling because they charge a consideration for the chance to win prizes (or something of value.)

Previously, we suggested Penny Auction sites resembled gambling. However, we’ve never concluded that fact, nor stated that buying at auction should be considered gambling. Aaron Traffas also wrote about Penny auctions and gambling.

However, an interesting statement in this lawsuit caught our attention:

Unlike normal auctions, where there are no entry fees or bidding fees, Defendants charge an entry fee and a bidding fee for each chance to win a prize. This is a violation of Illinois criminal statutes, 720 ILCS 5/28, et. seq.; Massachusetts General Laws Chapter 271, et. seq.; Georgia Criminal Code, § 16-12 et. seq.; New Jersey Criminal Law 2A:40, et. seq.; and the Ohio Revised Code Chapter 2915 et. seq.

Does this mean if a traditional live auction or online auction charged an entry fee, it too would be considered gambling? What if the entry fee wasn’t really a fee but some other valuable consideration such as promising to abide by the terms and conditions … promising to pay, or promising to remove?

There are many live and online auctions which require a deposit (payment) in order to enter the auction. This deposit is typically returned if nothing is purchased, or applied to any purchases; some online auctions charge bidders a nominal fee to “authorize” a credit or debit card.

Some live auctions require a bidder paddle to be purchased, and that money is returned only if the paddle is turned back in at the end of the auction. Nearly all auctions, no matter live or online, require the bidders agree to the terms and conditions before being permitted to participate.

Some common definitions of gambling include:

• To bet on an uncertain outcome, as of a contest.

• To play a game of chance for stakes.

• To take a risk in the hope of gaining an advantage or a benefit.

Can we say that Valerie is gambling, but Cory is not?

It seems reasonable that if this lawsuit results in these Penny Auction sites being considered gambling, that other live and online auctions could be considered gambling as well.

For example, could a buyer who lost money upon resale successfully show the auction was an illegal gambling operation in hopes of recovering his loss?

This could be a very interesting lawsuit to watch.

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.

He is to meet with Mary and Richard Gaines about selling Mary’s late mother’s real and personal property at auction.

Upon arriving, Jim meets Mary at the door, who introduces him to her husband Richard. They sit down in the living room of what was Mary’s mother’s home (her father died almost 10 years earlier) and Jim asks, “How was you guy’s weekend?”

Jim, Mary and Richard talk about their respective weekends, their families, sports, the weather and the upcoming county fair next month. After about 40 minutes of talking, Mary says, “Well Jim, I do need to sell this house, and everything in it. Tell me you can help us.”

Jim smiles, and assures both Mary and Richard he can help them. “An auction of this property and the items here will draw a good crowd, get you good prices and get this behind you so you guys can worry about other things.”

“Sounds good to me,” Mary remarks with a relieved look in her face. “Maybe we can take that trip out west this fall, Richard?” Richard seems equally relieved, and nods affirmatively that he would enjoy that trip as well.

Mary and Richard escort Jim through the 3-bedroom home showing him the various rooms, and the furniture, household items and collectibles in each. Jim listens intently as Mary recollects her mother’s extensive sewing and her and father’s woodworking interests. “They sound like such an interesting couple” remarks Jim.

The garage houses a 2007 Buick Century with only 7,500 miles. “Can you sell that too?” asks Mary. “Sure” says Jim, “and all the rest of the garage items including the lawn mowers, tools, and other equipment.” “Great!” says Mary.

Mary, Richard and Jim return to the living room and sit down again. “So Jim, how does all this work?” asks Mary. Jim says, “Mary and Richard, I have a bunch of good news for you. Are you ready?” “We sure are …” says Mary and Richard, almost in unison.

Jim tells Mary and Richard of his company’s 25 years experience, and their over 5,000 auctions to-date. He tells them he’s personally involved in all aspects of every auction their company conducts, and his staff have over 50 years combined auction experience. “We can have you at a closing table in less than 60 days, and the house and garage completely empty for the new owner.”

Jim details his commission and fees associated with his auction services. Mary looks to Richard for his thoughts … “I think we get a pen and see if Jim has something for you to sign, don’t you Mary?” says Richard. Mary agrees and she contracts with Jim to conduct the auction.

What has happened here is Jim has taken Mary and Richard on a trip with him — but not that trip out west — but rather going from them: knowing him … to liking him … to trusting him … to arrive where Mary (and Richard) are comfortable signing a contract with him. The sales flow simply put is:

• Know
• Like
• Trust

Not unlike any salesperson, good salespeople must sell themselves before they hope to be hired. In the case of auctioneers, auctioneers must sell themselves before they are afforded the opportunity to sell their client’s property at auction.

People hire other people all the time, but generally speaking will not hire other people unless they know them, like them, and trust them. Lacking any of these relationships (or consumer evaluations) more often than not the results are a lack of agreements and/or engagements.

The life of an auctioneer: Selling yourself, then their property …

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.

However we’ll use “real estate” here as this is typically how this question is posed.

The UCC 2-328 was finally firmed as to language about 1952. Since then, all states have adopted the UCC 2-328 into their state law except for Louisiana. Louisiana courts rule as if it was adopted, interestingly enough, so one might fairly perceive the UCC 2-328 applies in all 50 of the states in the United States.

In the 1940′s when the UCC was being written, it was thought that the UCC would only apply to movable property, which might cross state lines. The theory was that the United States needed “uniform commercial codes” — a.k.a. UCC — for such transactions so that states would maintain the same rules concerning such.

We first wrote about the UCC 2-328 being applied to real estate auction cases here: Does the UCC 2-328 apply to real estate?

Further, noted here, it has been applied over and over in prominent (and precedent-forming) cases (namely in Illinois [1981,] Maine [1984 & 1973,] Massachusetts [1975] and Virginia [1972]):

• Well v. Schoeneweis, 101 Ill. App. 3d 254, 257-58, 427 N.E.2d 1343 (1981); (holding that although U.C.C. 2-328 does not apply to auctions of real estate, the same laws apply to real and personal property.)

• Chevalier v. Sanford, 475 A.2d 1148, 1149 (Me. 1984) (applying U.C.C. 2-328 by analogy.)

• Forbes v. Wells Beach Casino, Inc., 307 A.2d 210, 219 (Me. 1973) (applying U.C.C. 2-328 and finding no significant difference between real and personal property law.)

• Outpost Café, Inc. v. Fairhaven Savings Bank, 3 Mass. App. 1, 3, 322 N.E.2d 183 (1975) (applying U.C.C. 2-328 same as to the sale of real property.)

• Hoffman v. Horton, 212 Va. 565, 567, 186 S.E.2d 79 (1972) (applying U.C.C. 2-328 same as to the sale of real property.)

Virtually every time a real estate auction case comes before a judge in a court in the United States, and there is a question regarding the type of auction (with or without reserve), reopening the bid, seller bidding, finality of the word, “Sold!” or other related matter, the UCC 2-328 is applied via one of these above cases.

For auctioneers who sell real estate (real property, rather) at auction, abiding by the rules of the UCC 2-328 is paramount — in direct conflict with the longstanding anecdotal theory held by many auctioneers that the UCC 2-328 only applies to personal property.

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.

Clearly the use of a computer allows for these counts to be calculated and reported.

The more of each is deemed better for the seller; we would submit to some extent the more bidders (total) the better for the seller.

Otherwise, we’re not sure of the merits of these “more bidders per item” and “more bids per item.”

However, some are comparing (contrasting) these statistics to what they believe are comparable numbers in a live auction setting. Such as:

“An interesting comparison to live auctions is the average number of bids per item. An live auction item with a lot of bidding activity may receive five or six bids before all the bidders are done bidding. Our online-only auctions average 15 bids per item …”

It seems to us that the number of different bidders per item is of little statistical value. A longtime saying in the auction business is, “You only need 2 bidders,” and in fact, all any auctioneer needs for any particular item are the last two bidders.

Further, the number of bids per item seems uninteresting and not statistically significant. In the spirit of needing “only 2 bidders,” an auctioneer only needs the last 2 bids for each item in order to maximize the seller’s proceeds.

Taking a look at the 2011 Florida Citrus Bowl pitting Notre Dame against Florida State, we see Notre Dame ran 69 plays, and Florida State ran only 62. Notre Dame had 19 first downs, and Florida State had only 13. Notre Dame had 7 3rd-down conversions, and Florida State had only 3. Yet, Florida State won the game 18-14.

In regard to the number of bids per item:

I attended a live auction the other day where the auctioneer was selling coins. One such lot was a 1922 Peace Silver Dollar AU. The bidding started at $5 and continued $6, $7, $8, $9, $10, $11, $12, $13, $14, $15, $16, $17, $18, $19, $20, $21, $22, $23, $24, $25 and $26 (22 bids per item.)

Not two days later at another live auction, a very similar coin came up for auction and the bidding started at $5 and continued $7.50, $10, $12.50, $20, $22.50, $25 and $26 (8 bids per item.)

As can be seen here, there was no benefit to the 22 bids over the 8 bids. In fact, it was probably better to have less bids (and therefore less time involved) in selling the second coin over the first.

Of course an online auction would have (or could have) more bids per item, as it might extend over a week or more and the bidders can’t easily evaluate the amount of interest (demand) in any particular item, and therefore bid just a bit more than the previous bid in hopes that is all it takes to win.

In regard to the number of bidders per item:

An online auction is significantly different than a live auction in this respect. In an online auction, each bidder registers and bids largely independently — and without knowledge — of the other bidders. Any higher bid is accepted from the first bidder to offer that higher amount, and this could well extend over a week or more.

In a live auction, bidders are literally looking at each other, and at the other bidders in the audience. Many wait and only bid if the current high bid is lower than their perception of value. And, they only wait, on average, no more than 30 seconds for the item to sell.

As well, many (if not most) auctioneers only take bids from 2 bidders until that highest bid is resolved, and then look for another 2-bidder combination.

We discussed this common method of live bid calling here: Keeping the bid between two bidders … This type of bid calling indirectly lessens the number of bidders per item, and typically speeds up the auction process without forsaking any (and possibly enhancing) profit to the seller.

Which auctioneer to hire? The one who historically gets more bids on each item? Or, the one who historically has more bidders bidding on each item?

The statistic that matters, if any, is actually which auctioneer is historically getting more net proceeds for their sellers; I’m not convinced higher net proceeds are necessarily a result of more bids per item, or more bidders per item.

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.

For example, say the auction date is November 15.

November 1 the auction house places a list of the items to be offered at auction on November 15 and allows interested parties to place bids starting November 1 up until the November 15 auction.

Then, November 15, the auction begins at 1:00 p.m. and the bids received online prior are used as the starting bids at the live auction. As well, bidders could bid online independent of their participating online prior.

This particular auction was a “no reserve” auction and thus once the auction commences per the UCC 2-328 (3):

In an auction without reserve, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time.

In this case (using our example above) many bidders have placed bids online starting November 1. Then, on November 10 (five days prior to the auction “commencing”) the auction is cancelled and all items are withdrawn by the auctioneer (per the seller).

Richard is a bidder who placed bids prior to November 10, and filed suit claiming “ownership of items he bid for online ahead of the auction.”

Further, Richard maintained the auction was “no reserve” in nature, meaning the highest bidder could claim each item without the possibility it could be removed from the auction.

In this particular case, the Los Angeles Superior Court ruled against Richard’s claim.

Undoubtedly, the Court’s reasoning was that the auction didn’t actually start until November 15 at 1:00 p.m., and the pre-bidding was just that — bidding prior to the auction itself.

Yet, the UCC 2-328, uses a particular term suggesting when an auction starts — “after the auctioneer calls for bids on an article or lot.” and not the word “commence” nor “start.”

Richard argued — and one certainly could — that by placing those items online and allowing for competitive bidding, the auctioneer was “calling for bids …” at that very moment.

Richard’s attorney said after the verdict that current contract law has not kept up with the advent of the Internet and online bidding. We would agree.

We wrote about auctioneers asking for bids before the auction
and whether or not such an invitation “started” the auction. We concluded that just asking — lacking the auction’s start — certainly didn’t constitute an auctioneer calling for bids …

We also wrote about bidders making offers prior to the auction and concluded that bidders may well mistake a pre-auction bidding opportunity as the auctioneer calling for bids …

I suspect cases such as this will continue to be heard by courts across the United States, with conflicting interpretations and results.

For auctioneers, it will be prudent to ensure any bidding prior to the auction is clearly identified as such if the right of withdrawal is desired to be maintained in a “without reserve” auction.

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.

Our original story is here:

Should auctioneers announce the buyer’s (or bidder’s) name?

Nancy purchased a rare pair of Japanese Carl Zeiss U.758 binoculars at Ed Williams’ “Every Friday” auction for $4,750.

She paid this much due to Ed identifying her to the crowd and the crowd bidding against her due to her product knowledge.

Now, six years later, Ed Williams has not seen Nancy Hill even once at his “Every Friday” auction. In fact, Ed has only seen her at other auctions or heard when she purchased an interesting item at another auction.

It appears obvious that Nancy Hill is avoiding Ed Williams’ auctions due to him announcing her name to the crowd that one auction, and thus alerting the other bidders that they may want to bid against Nancy.

What is even more interesting is that just today, an attorney called Ed Williams to discuss him selling a prominent World War II optical collection.

Ed discusses with this attorney his marketing ability, as well as his commission structure. Yet, does Ed Williams disclose that one of the most active World War II optical collectors will likely not be present at the auction?

Independent of Ed’s disclosure to this attorney (or not), what has this one instance six years ago of announcing Nancy Hill’s name to his crowd done in regard to all the auctions that followed — and what impact will it have on this current World War II optics auction?

Ed’s disclosing Nancy Hill’s interest in those Japanese Carl Zeiss U.758 binoculars netted his seller over $4,000 more in proceeds that auction. However, how much has Ed’s sellers suffered financially without Nancy Hill present in the past six years since that auction?

A common English idiom is, “Can’t see the forest for the trees,” which tends to be interpreted as “Losing sight of the big picture by getting too involved in the details.”

Similarly, has Ed here gained his seller over $4,000 more in proceeds and thus cost his future sellers much more? In other words, was Ed blinded by the $4,000 gain so much that he couldn’t see the long-term loss his disclosure would cause?

Ed’s client six years ago could certainly argue that the disclosure of Nancy Hill bidding was necessary to adequately represent his interests. Yet, could Ed have argued that if he had disclosed Nancy Hill’s bidding at the auction previous to this one six years ago (in order to maximize another client’s interest,) that Nancy Hill wouldn’t have been at this subject auction just six years ago?

Auctioneers must be attentive to any decisions which will cause long-term harm to themselves and/or their clients, even if there is short term gain. Such decisions should have both the knowledge and consent of all clients as well.

In other words, see the trees and the forest.

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.

In December, 2009, Harold French, a licensed auctioneer attended an auction conducted by Stephen Bennett, another licensed auctioneer.

Mr. Bennett discussed with Mr. French that a certain painting in the auction belonging to William Noonan had a $10,000 reserve and Mr. Bennett wanted Mr. French to bid on the painting if the bidding didn’t reach the reserve.

When the bidding price for the painting reached $9,000, Mr. French bid $9,500. He later testified before the Board [of Auctioneers] that he did not intend to actually purchase the painting, but sought only to protect the reserve and ensure that the painting was sold.

There were no further bids on the painting. Mr. Bennett indicated to the gallery that the painting was sold and attached French’s tag number to the painting.

Mr. Noonan believed that his painting had been sold because he thought that he had waived the reserve by gesturing to Bennett following French’s bid.

Basically, the State of New Hampshire has alleged that Mr. French and Mr. Bennett engaged in collusive bidding which is defined in New Hampshire as:

“A practice whereby the auctioneer, the seller, or anyone acting on behalf of the auctioneer or seller, causes, employs any person to engage in, or knowingly allows, fictitious bidding during an auction for the purpose of bidding up the price of any goods in competition with bona fide bidders, or for the purpose of encouraging or enticing bona fide bidders to purchase, or for the purpose of stimulating competitive bidding to purchase. Collusive bidding shall include any use of false bidders, cappers, shills, or by-bidders.”

Inclusive in the counter argument by the defendants, and our subject here today, is that:

“The law allows one bid to be placed during the auction of an item with a reserve price.”

Our questions were:

• One bid?

• Only one bid?

• What law allows this?

Without addressing this particular case further, one must go back to 1851 and look at the case known as Towle v. Leavitt, 23 N.H. 360 (N.H. 1851). In that New Hampshire Supreme Court Case [Superior Court of Judicature,] the Court commented in regard to sacrificing [property] for the want of bidders:

“In sound policy, no person ought, in any case, to be employed secretly to bid for the owner against the bona fide bidder at a public auction. . . . And after the best consideration which we have been able to give the subject, it appears to us, that this is the true doctrine, and that sound morals and good faith between man and man, evidently require that by-bidding should receive no countenance from any legal tribunal. Fair, open-handed honesty ought to pervade all dealings, and all parties should, so far as may be, meet on equal terms in their bargains and sales . . . . If it be said that the property may be sacrificed for the want of bidders, as is declared in some of the cases in equity; the answer is that the owner may withdraw it before the sale commences, or he may set it up at a specified sum, or he will announce that he will reserve the right to make one bid himself . . . . The owner of the property has no right to complain at such a course, because it is the only course that comports with the truth.”

Yes — the Court in 1851 said that among other options for the seller to protect his property, he may make one bid himself.

We wrote about a bid calling practice known as Unethical Bid Calling #7, The Drop Off. It seems this case closely resembles this practice.

This makes for an interesting case for all auctioneers to watch. On the one hand, apparently the New Hampshire Supreme Court ruled this one bid is legal. On the other hand, New Hampshire has other, subsequent laws, which tend to say otherwise.

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.

Auctioneers sell personal property at auction every day in the United States and other places around the globe. For one auctioneer, that could be a used earth mover, another a 2 carat solitaire diamond ring, another a rare oil painting, and another a box of vintage sewing patterns.

The variety of personal property at auction is as immense as the world we live in. If we assumed that there were about 2,400 live auctions in the United States every day (outside of foreclosures and other forced sales), it appears about 20% (or 480) involve real property and 80% (or 1,920) involve personal property.

If these 1,920 personal property auctions had approximately 500 lots in each, that would be nearly 1,000,000 items of personal property sold at auction every day. In a year, that would be about 360 million items.

My questioner continued, “So, what’s the future hold for someone such as you? Will you be selling personal property at auction 10 years from now? 20 years from now?” “Probably,” I replied.

So what does the future hold in regard to personal property at auction? I think the future is as bright as it has ever been. People need personal property to function in the world — they need food, clothing, furniture, appliances, transportation and the like.

Too, people seem to genetically or inherently collect and/or enjoy owning other items such as artwork, jewelry, decorative arts, toys, games … the list goes on.

As well, the world of business needs personal property to function. From items such as desks, chairs, file cabinets, copiers, printers, computers, office machines and related equipment to trucks, tractors, agricultural/industrial machines and vehicles, helicopters, airplanes and all types of specialty items.

Additionally, the agricultural industry regularly buys and sells livestock at auction. Swine, poultry, sheep, cattle, horses, fish, and virtually all other types are bought and sold at auction every day in the United States.

Further, people attend auctions to buy all kinds of things, with the intent to resell for a profit. These “dealers” place their auction purchases in storefronts, shops, in shows, online, and otherwise hoping to sell for an amount in excess their purchase price.

Which brings us to a different question: What’s changing in the personal property auction business? In other words, what’s selling well, and what isn’t and what’s the future hold?

As I’m standing in line at O’Hare International Airport, a TSA agent joked with us that we would have to remove from our pockets and/or bags any laptops, iPads, radios, 8-track players …

Yes, while all personal property sells at market value at auction, some items have lost value over the past several years, while other items have increased in (or maintained) value.

Where a Zenith console stereo 8-track player sold at auction for $750 in 1983, it might demand only $1.00 (if anything) today. Where a pristine 1956 Chevrolet Belair might have demanded $500,000 at auction in 1990, today it might only demand $50,000.

However, a particular Eero Saarinen tulip style chair that sold at auction in 1990 for $75 might demand $7,000 today. And, a vintage McIntosh amplifier that sold at auction in 1981 for $50 might demand $1,000 today.

Outside of commodities (gold, silver, grain, lumber, etc.) which sells at auction commensurate with the ever-fluctuating greater world market, collectibles tend to follow another pattern. As collectors age to the point of greater financial security, they tend to collect items from their childhood influences, when they were aged 6-13.

The collector car market is a perfect example of this.

When the 6-13 year-old’s were growing up in the 1950′s, they saw the 1955, 1956 and 1957 Chevrolet automobiles which they sought to collect when they were 40-50 years old in the 1980′s and 1990′s. However, as those collectors aged, they retired, downsized, and otherwise started to sell their 1955, 1956 and 1957 Chevrolet automobiles, this creating more supply than demand and lowering prices beginning in 2000 and beyond.

Meanwhile, those growing up (6-13 years old) in the 1960′s and 1970′s were getting to the age that they wanted to collect cars from their childhood. For a Chevrolet collector, those were not 1955 Chevrolet’s, but rather more like 1967 Chevrolet’s. Thus beginning around 2001 and thereon, the prices of these cars rose substantially.

To confirm this theory even further, as I was teaching this very concept at an auctioneer continuing education class back in 2003, an attendee brought to my attention that those “1950′s and 1960′s cars” were of little interest to him, as he pulled out of his wallet a picture of a 1931 Ford. “This is what a car looks like” he proclaimed. His age at the time of this declaration (in 2003?) Eighty-four years old.

Many auctioneers are destine to sell at auction what their clients supply them. Yet, anything with immense supply tends to depress prices. As we wrote about Auctions: Is it supply or demand, once bidders and buyers see high prices of particular items at auction, they are more likely to consign those same items hoping to take advantage of those trends.

So, how’s the personal property auction business? Largely, one could say, virtually unchanged for centuries in respect to a bird’s-eye view, but ever changing otherwise, in terms of what is in more or less demand, and what is in more or less supply.

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.

One such “playing field” issue is that outside of seller withdrawal, the buyer may retract his bid anytime before the property is deemed sold, and the auctioneer — on behalf of the seller — may accept a higher bid anytime before the property is deemed sold.

For example, if Frank is the high bidder at $750 on a Smith & Wesson M&P9 9mm handgun, he can excuse himself from that bid by retracting his $750 bid, and the seller (via the auctioneer) may excuse himself from that bid by accepting a higher bid, so long as either precedes the falling of the hammer.

Which brings us to another part of the UCC 2-328: It’s found in UCC 2-328 (2):

A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner. Where a bid is made while the hammer is falling in acceptance of a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods sold under the bid on which the hammer was falling.

From this, as we’ve discussed in auctioneer continuing education classes across the United States, this allows the auctioneer to accept (or not) a bid which comes in “while the hammer is falling.” Our question today is: Is this same right extended to the bidder who wishes to retract his bid “while the hammer is falling?”

Let’s say Frank is the high bidder on this Smith & Wesson M&P9 9mm handgun at $750 and just as the auctioneer utters the word, “Sold!” Frank retracts his $750 bid. Our questions are:

• Must the auctioneer hold Frank to this $750 sale price?
• Can the auctioneer unilaterally accept/reject Frank’s retraction?
• Must the auctioneer accept Frank’s retraction?

If we assumed in the spirit of leveling the playing field, that the retraction is to be treated the same as a higher bid, then the auctioneer can either allow the retraction, and start the bidding over, or bind Frank as the high bidder at $750 — and it is the auctioneer’s choice alone.

Yet, the UCC 2-328 makes no reference to this situation.

If we refer to basic contract construction, if an offeror retracts (withdraws) his offer [and is communicated] before the offeree accepts the offer, the acceptance cannot be binding upon the offeror.

Our question then remains, however, if the retraction at auction “while the hammer is falling” is indeed considered a valid retraction? We ask since a higher offer made “while the hammer is falling” can be accepted or not.

By applying basic contract construction to both a higher bid and retraction, it would seem that the higher bid would be binding upon the seller so long as the hammer did not fall completely. Too then, these same rules would apply to retraction. But the UCC 2-328 is not written this way.

If Frank yells to the auctioneer, “I retract my bid” just as the auctioneer is announcing this Smith & Wesson M&P9 9mm handgun, “Sold!” to Frank for $750, what must (or what can) the auctioneer do?

I suspect the retraction is binding, and the auctioneer cannot hold Frank to this $750 contract. I also suspect a court case will eventually clarify this issue.

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.

The added exposure for the auction method of marketing is beneficial to all of those involved in the auction business.

I don’t doubt shows about the auction business will drive more clients and customers to utilize auction marketing.

However, particularly curious statements were made during a recent episode of the History Channel’s Real Deal filmed at Don Presley Auctions in Orange, California.

The premise of the show appears to involve an owner bringing in an item for a dealer to look over and offer that owner a certain purchase price. Then, the owner and dealer negotiate until either the owner sells to the dealer or submits the item to auction.

On this particular show, an Elgin Bicycle, slot machine, 18K (?) Spider Man Figure and historic tooth were all items subject to a negotiated sale or auction. Only the historic tooth was sold prior to auction.

However, the point of this story is that the show continually characterizes the auction as inherently high risk. In fact, all the following words and/or phrases were used during the show to describe the auction:

• Huge risk
• Unknown
• Very big risk
• Tangled web
• Less certain
• Gamble
• Risky
• Crapped out

It makes me wonder if the producers of the show sat around saying, “How many ways can we describe the auction as high risk? Let’s use as many different words as we can …”

And, are they right? Are auctions high risk? We beg to differ.

First, the show portrays the pre-auction negotiation and the auction itself as mutually exclusive? The dealer’s high offer is $1,000 prior to the auction, but it sells at auction to another person for $700? Why wasn’t the dealer at the auction, and why didn’t the dealer bid $800?

If this “Real Deal” auction was indeed real, the dealer would be a bidder, and the items would probably always sell for just as much or more than the pre-auction negotiated price.

Too, this is a classic example of having all one’s eggs in one basket. Auctions are often many more eggs, and many more baskets — where the seller might receive bids less than their expectations on some items, and in excess of their expectations on other items … which results in a blending of results.

Nevertheless we believe auctions are not high risk at all. We wrote about the topic of “Does anything sell at auction for less than market value?” Our conclusion was generally that at a well publicized public auction nothing sells for less than market value.

Further, what are the relative costs of either selling to a dealer versus at auction? If the auction costs the seller, say 20%, does the dealer pre-auction offer cost the seller the same? What does it cost to find just the right dealer to meaningfully offer prior to auction?

If John has a World’s Fair mechanical bank he wishes to sell, can he find an auctioneer to sell it for him? Sure; auctioneers are not hard to find. But, if he wants to find that one dealer that collects World’s Fair mechanical banks of this type, how does John find him or her? And, what does that search cost?

It may well be that if John can sell it for $700 at auction — with a 20% commission — netting him $560, that this might be better than selling it to a dealer for $1,000 if it costs him in his time and effort and otherwise, anything over 44% to find that particular dealer.

And, how does John know that he has found “that dealer?” Maybe he finds a dealer, who gives him $1,000 for this World’s Fair mechanical bank, where the bank is actually worth much more at auction? It would appear there is just as much risk selling prior to auction as selling at auction.

While I always enjoy listening to Bryan Knox bid call (see him in action in a previous story here: http://mikebrandlyauctioneer.wordpress.com/2010/03/02/why-arent-auctioneers-saying-sold/, I think the scenario here of the auction being high risk is unfounded.

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.

What traits would the best client have? What traits would the best client not have?

If we base our evaluation on what might be a typical client of an auctioneer, we will assume here that the auctioneer’s potential client has something to sell.

Let’s look at Mary and Helen. Both have a home they wish to sell.

Honesty:
• Mary is honest with her auctioneer about her situation of wanting to sell her home to raise money for her son’s college education. She’s advised her auctioneer of a problem with the furnace.
• Helen tells her auctioneer that she needs to sell her home because she is ‘downsizing’ when in fact she is attempting to avoid imminent foreclosure. Helen has not told anyone about the electrical problems in the basement.

Equity:
• Mary owns her home with no mortgage liens at all; she is current on her taxes and insurance.
• Helen owes about $85,000 on her home, which might be worth $90,000 or so in the current market, and is behind on her mortgage payments.

Urgency:
• Mary wants to sell her home as quickly as possible, so she can forward funds to her son’s college.
• Helen isn’t sure she wants to sell at auction because she thinks she can probably wait several more months before she is forced to leave her home.

Detached:
• Mary has only lived in this home for five months, following the death of her aunt; Mary’s already moved out and has little emotional attachment to the home.
• Helen grew up in this same house and has spent nearly $10,000 recently updating the kitchen and family room.

Realistic Expectations:
• Even though Mary believes her home may be worth $100,000 or so, she realizes it’s only really worth what the market will bear — maybe much less than $100,000.
• Helen says her home is appraised for $90,000 and she doesn’t want to sell it for any less than that.

Trusting:
• Mary trusts her auctioneer to handle all the necessary marketing, day-of-auction staffing, and other necessary duties.
• Helen worries if her auctioneer knows how to properly market her home, and/or knows what to do the day of the auction …

Believers:
• Mary believes in the auction method of marketing and truly feels that whatever her home sells for will be it’s value.
• Helen wants to sell at auction, but is not confident that auctions typically produce market value.

It’s fair to say that most auctioneers would consider Mary a great client. On the other hand, most auctioneers would consider Helen a client probably better avoided.

Are auctioneers blessed with clients who have all these above traits such as Mary? Many times, auctioneers have clients with most — or at least some — of Mary’s traits. It’s when clients have only a few (or none) of these traits when auctioneers find themselves often regretting the relationship.

An auctioneer’s best client? Mary.

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.

We write here about our analysis of this somewhat unusual type of auctioneer closing.

The UCC 2-328 as adopted by 49 of the 50 states in the United States, and as essentially adopted as standard practice in all 50 states, notes that:

UCC 2-328 (2) A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner.

What this means is that property is still available to a higher bidder and/or the high bidder may retract his bid (and in a with reserve auction, the seller may withdraw the property) until the auctioneer signals the auction is complete.

Most auctioneers — but certainly not all — denote completion of the sale by saying one word: “Sold!”

Other methods of completing the sale include using a gavel, saying, “Right here!”, “You bought it!” You own it!” etc.

What is common with most all methods of closure is that some sort of expression immediately precedes the announcement of the final selling price.

What Aaron witnessed at a recent auction, which is startlingly commonplace in parts of the United States — is that the auctioneer used the final selling price as the customary closing.

Instead of:

2,750? $2,750? I’m at $2,500 now $2,750? “Sold!” for $2,500 to number 361.

Aaron heard:

2,750? $2,750? I’m at $2,500 now $2,750? $2,500! to number 361.

We find this unconventional way of closing an auction sale problematic.

Here’s why …

In writing about what auctioneers say, we noted that auctioneers bid call with two numbers being expressed: “the have,” and “the want.” The have is the current bid, and the want is the higher bid that is desired.

So, a standard, correct auctioneer’s chant would include both numbers — in our above example: $2,500 and $2,750.

Therefore if the customary closing is “the have,” how are bidders to know if this indeed signals a closing or is rather noting the current bid in anticipation of a higher bid?

In inquiring about this method further, I asked an auctioneer who employs this method of closure, and talked about this possible confusion … is saying, “$2,500 …” the final bid price or noting the current bid with the bidding still open?

His reply was essentially:

I see what you mean, but if I say, “$2,500 and I want $2,750″ then that’s just noting the have, where if I say, “$2,500 to number 361″ then it’s the final selling price.”

I pressed him further … asking that if the $2,500 was not necessarily the closing, what word or words are used to bind the high bidder with the seller?

Okay, I guess the number can’t count as the closing, so I suppose when I say, “to number” then it’s sold to whatever number I announce …

I had more questions … if I’m a bidder and you note you have $2,500 and are asking $2,750 — and the last number you express is $2,500 — I don’t know if you are about to sell it for $2,500 or you are open for more bids do I? If I raise my hand at your “$2,500″ what am I offering to bid?

I see what you’re saying but if I say, “I want $2,750 and I’m at $2,500″ and you raise your hand, I think I’ll take your bid at $2,750.

I continued … wouldn’t you agree that the auctioneer invites offers and then the bidder makes the offer by either expressing a certain number, or agreeing to the invitation? I’m not sure bidders would be positive what the invitation was if the last number they heard …

Yea, they might not. But, I usually end my chant with the want — the $2,750 — and that way they know what I am inviting them to bid. Then, if nobody bids, I say, “$2,500 to number …

In that precise situation, if I yelled $2,600 after you said $2,500 but before you said “to number” you would take that bid and then ask for more? Or if I merely raised my hand, you would take me at $2,750?

Right. But if I said, “to bidder” that would mean I had sold the property and could not take your bid regardless of the amount.

Okay — one last question. If “to bidder” is the binding phrase, your clerk writes down the bidder number and then recalls the price you already announced — or do you repeat it? I would note that most contemporary auction clerking software programs presume there is a closing statement of some sort, then the price and then the buyer number …

Well, yes … my clerks remembers the sale price — I don’t have to repeat it. However, now I do see a pattern here …

I’m making the bidders remember the want by not ending on that number, and making my clerk remember the sale price by not ending on it either.

I’m the auctioneer and have a good handle on both the want and the have. Maybe I’ve talked myself into a new-and-improved closing?

You could use a much more conventional closing, which doesn’t require the bidders to remember the asking price, nor the clerk to remember the sale price, such as: $2,500 and now $2,750? Sold for $2,500 to number 361?

Yes, that might well be a better closing.

Auctioneers using the sale price as the closing, or more likely using some phrase as “to number” to signal closure are, by omission and seemingly oversimplification, making the auctioneer closure more complex for everyone involved except themselves.

Any auctioneer closing other than asking the want — closing expression — the have — buyer number, is ill-advised.

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.

For years, AuctionCode.com succeeded in helping the live auctioneer and auction buyers and sellers in the United States and elsewhere.

AuctionCode.com continues to provide this service.

However, AuctionCode.com was recently taken over by a online auction company and ever since, AuctionCode’s emphasis has been on encouraging auctioneers to sell via their online system, and encouraging buyers to use its online-only platform.

For instance, as the “day after Thanksgiving,” (Black Friday) loomed, AuctionCode.com published this directive:

“We’ve said it before… and we’re going to say it again! No need to deal with the crowds during Black Friday! — check into any of AuctionCode.com’s online auctions and stay at home … and find deals, steals, and fabulous finds!”

For November 25, 2011, AuctionCode.com listed over 500 live auctions in their database, and only about 70 online-only auctions extending over this Black Friday date.

It would appear from this published statement, AuctionCode.com wants buyers to stay home and not attend any of these more than 500 live auctions in the United States and elsewhere — and rather — focus on the 70 or so online-only auctions they offer.

It isn’t hard to figure this out. AuctionCode.com lists live auctions for free, and makes money only on outside advertising and upgrade auction marketing plans. For the online auctions, they charge the auctioneer (and thus the seller in many cases) a 5% fee on all items sold online.

Therefore, AuctionCode.com hopes you survey their online items on Black Friday (and every day) so they have the potential to make more money on their 5% fee — rather than attend a live auction where their portion of the gross proceeds is -0-.

Yet, if the public takes AuctionCode’s advice, and only looks at their online auctions, it would seem fewer and fewer auctioneers would be apt to use their auction database, therefore lessening the value of that database, and the value of advertising there — therefore decreasing overall advertising revenue.

Further, I’m not convinced AuctionCode’s announcement to the public that they should check out their online auctions for “deals” and “steals,” is prudent for their online auction model. If buyers can steal things from their online auctions, then maybe auctioneers should reconsider using their system — as auctioneers are hardly looking to give things away …

Of course, auctioneers have for centuries teased the public that they might get a deal if they attend an auction. We briefly noted this practice in two blogs:

• http://mikebrandlyauctioneer.wordpress.com/2011/03/12/market-gobbledygook/

• http://mikebrandlyauctioneer.wordpress.com/2011/09/02/auctions-are-an-illusion/

We should say AuctionCode.com is free to practice their business however they desire. We just find it interesting that they host auctions which they discourage the public to attend.

* The above account including company names, events, etc. are purely fictional. This scenario has been created solely for educational purposes.

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.

Neil’s schedule each week includes:

• Monday at the Geofair auto auction

• Tuesday at the Tylersville Cattle auction

• Thursday at the Dain-Co auto auction

• Friday at the Mentor fruit and vegetable auction

Neil loves his job. Neil travels up to 1,500 miles per week in order to work these four auctions.

Neil was recently talking to his brother Barry who works for a livestock company in Nebraska:

“Barry, I can put up with the travel, the crowds, the hotel food … the one thing I can’t have is a sore throat … “

Neil rarely has a sore throat due to lifestyle choices he makes.

Neil doesn’t smoke, breathes through his nose as much as possible and gets enough rest and eats right to keep his immune system healthy.

Yet, every so often, Neil experiences a sore throat.

While there are any number of remedies for a sore throat, including drops, sprays, aspirin or the like, gargles, humidifiers, etc., it is important to first find out what is causing the sore throat in order to treat it properly.

When Neil has a sore throat, outside of a serious health condition (such as cancer,) it is almost assuredly caused by one of five (5) conditions, of which we’ve ordered from easiest to treat to more difficult, with typical treatment:

1. Excessive mouth breathing or other drying of the throat.

   For this condition, room temperature water is probably the best temporary cure. Other cures include salt-water gargle or other type of humidifying agent.

2. Sinus drainage, which tends to irritate the throat.

   For this condition, the best solutions include steroid nasal sprays (popular brands include: Flonase, Nasonex,) oral steroids (popular brands include: Medrol, Hydrocortone, Cortef,) some type of allergy medication such as a antihistamine (popular brands include: Claritin, Zyrtec,) or decongestant sprays (popular brands include: Afrin, Neo-Synephrine.)

3. A condition called Thrush which is a candida infection.

   For this condition, some version of antifungal medication ingested by tablet, lozenge, or liquid is normally prescribed. It can require 10-14 days of treatment to resolve Thrush completely.

4. Some type of bacterial infection.

   For this condition, some type of antibiotic is normally prescribed. It normally requires a minimum of 10 days of treatment to resolve a bacterial infection satisfactorily.

5. Some type of viral infection.

   There is no current treatment to resolve a viral infection. However, pain medication, rest and plenty of fluids is normally prescribed. Most viral infections result in a sore throat for five to seven days, with the soreness subsiding over the next seven to ten days.

Neil’s driving from the Dain-Co auto auction to Mentor and feels a sore throat coming on. He has to sell over 1,000 lots of fruits and vegetables tomorrow morning.

Neil is unsure what is causing his sore throat, but must quickly find some sort of solution to ease his pain so he can bid call in the morning.

Basically, anyone in Neil’s position must do one of two things (or both) to resolve short-term pain of a sore throat — beyond further diagnosis and medication:

• Drink plenty of fluids — especially water.

• Take some sort of pain-relieving medication such as throat-numbing lozenges or oral acetaminophen/ibuprofen.

Further, what Neil must do beyond drinking plenty of water and taking pain medication is to promptly find out what is causing his sore throat so he can take proper steps to resolve it.

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.

Ed conducts an “Every Friday” consignment auction in Carlin, Nevada.

This particular Friday, he opens his auction with the first item up for bid:

“Folks, we have here a wonderful pair of World War II binoculars. Somebody start the bid at $500?”

What Ed Williams doesn’t know, and probably what only one person in Ed’s crowd knows (at this point) is that these binoculars are a rare pair of Japanese Carl Zeiss U.758 binoculars, likely worth over $5,000.

Nancy Hill is in that audience, and is that one bidder to whom we refer. Nancy has been collecting rare World War II items for over 25 years, and is the foremost expert on World War II binoculars, telescopes, and other optical equipment in the world.

Nancy has testified numerous times in court regarding the value of such items, and has appeared on several television shows regarding World War II collectibles. Her personal collection of World War II optical items is unrivaled.

Nancy bids (offers) Ed Williams the $500 he is asking, and Ed asks someone else to bid $600. Almost ten seconds pass when Ed says,

“Hey, look here … that’s Nancy Hill bidding on these binoculars … how are you, Nancy?”

Just then, another bidder bids $600 and Nancy bids $700. The bidding continues $800, $900, $1,000, $1,500, $2,000, $2,500, $3,000, $3,500, $4,000, $4,500 … with Nancy ultimately becoming the buyer at $4,750.

What has happened here is Ed Williams announced Nancy Hill’s name to the crowd for one reason: to alert the other bidders that Nancy Hill was bidding, and they could safely bid against her and know that her bidding would serve as a guide to true market value.

Nancy is furious with Ed in the fact he identified her to the other bidders in the audience. Ed’s seller (and Ed for that matter) couldn’t be much happier as his technique has seemed to net his client over $4,000 more than he otherwise would have gained, and earned Ed more in commission.

We wrote about buyers wanting to keep their identity and/or sales prices confidential and the same theory could apply to bidders as well: http://mikebrandlyauctioneer.wordpress.com/2010/05/28/buyer-wants-his-identity-and-sales-price-kept-confidential-at-auction/

Our conclusion before, and here again is that sale prices and bidder/buyer identities are quite public information unless the parties to the auction agree in advance to limit the distribution or broadcasting of those details, or the bidder/buyer takes steps unilaterally to conceal his identity.

What this means is Nancy Hill has a duty to discuss with Ed Williams prior to the auction that she wishes her identity to be kept confidential, and/or conceal her identity by either bidding by proxy or maybe disguising herself so Ed and other potential bidders do not recognize her.

And what is Ed’s duty? Ed’s duty is to represent his seller and his seller’s best interest. Therefore, Ed has a duty to announce Nancy’s name, and take other similar measures, unless announcing such is against any prior agreement between Nancy and his client, or in violation of local, state or federal law.

Certainly, Ed could have a policy that he doesn’t announce bidder or buyer names at his auctions, but Ed’s clients would have the right to know this policy before engaging Ed to be their auctioneer (have knowledge of it, and consent to it.) This way, Ed’s sellers would know to expect Nancy to be not identified at Ed’s auction.

Should auctioneers announce the buyer’s (or bidder’s) name? In many cases, the answer could well be, “Yes.”

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.