It’s selling without reserve and we have bids … How do we know that? Because it says “without reserve” clearly next to the “current bid” in excess of $2 million. Yet, the auction begins (“bidding opens”) in about 15 days.
In a without reserve auction, after the auctioneer calls for bids on a property, that property cannot be withdrawn unless no bid is made within a reasonable time. If there are current bids, and those bids have been facilitated by the auctioneer, is it reasonable to conclude the auctioneer called for those bids?
Further, if the contract with the seller says he or she can withdraw the property prior to auction, is that withdrawal contingent upon there being no bids yet, or at minimum no bids made within a reasonable time — as it should be? Apparently not as the seller/auctioneer reserve the right to withdraw up until just before when the bidding opens 15 says from now.
What I’ve been able to discern here is that this is an absolute auction without the genuine intent to transfer to the highest bidder regardless of price. In other words, not an absolute auction at all.
Here’s more evidence that bids have already been placed in this auction subject to be cancelled just prior …
If you are the high bidder, you will receive an incentive equal to this percentage of your Opening Bid in the form of a credit from the Seller against the Purchase Price of the Property. All Opening Bids are binding and subject to being received by the deadline.
So not only is there bidding ahead of the 15-days-from-now auction starting time, but those offers are binding and memorialized as inducements. I would counter those bids are likely not binding, and further since we now have offers in response to an inducement, this seller’s last-minute cancellation clause is voided. In other words, the property must sell to the highest bidder.
We wrote about bids (offers) being deemed irrevocable, and the fact they probably are revocable here: https://mikebrandlyauctioneer.wordpress.com/2017/12/18/can-your-bidders-offer-bid-be-irrevocable/. In this case, is the inducement consideration in return for keeping the offer open? Maybe — but maybe not as inducements are not customarily considered consideration.
Will the property actually sell? I doubt it, unless in the unlikely event there are bids sufficient to satisfy the seller/auctioneer prior to the auction officially (unofficially) starting — and that’s the problem — in that the public is mislead about the word, “absolute” as so when property is really selling absolute, they (the public) is justifiably suspicious.
There is no kinda absolute, sort-of absolute, more-or-less absolute. There is only one absolute: The genuine intent to transfer to the highest bidder regardless of price.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College of Business, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and Texas Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.