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It’s hard to not hear this if one goes to a lot of auctions. Usually, there will be a reasonable number of like items, and the auctioneer will sell “choice” to the high bidder.

Almost always, this will be the bidders choice, i.e. their decision which one or more they take for the high bid price each, although it could be the auctioneer’s choice as well.

Sometimes this method is referred to as, “Selling choice with privilege.”

So here are maybe the various ways auctioneers sell choice; let’s say there are 32 iron fence panels selling, “choice.” The auctioneer would typically say, “Folks, we’re selling choice of these 32 fence panels, high bidder gets his choice!” Once a high bid is secured, it is that price times the number chosen for a final total price. And, there are some variations discussed below:

  • High bidder may take 1, 2 … or all 32 of the fence panels for the high bid price each
  • High bidder must take at least 2 (or at least some number, disclosed prior to the bidding) and up to 32 fence panels
  • High bidder may take 1, 2 … or all 32 of the fence panels, but must take in order. In other words, if he wants 3, he must take the “first” 3, or panels numbered #1, #2 and #3
  • High bidder will indicate how many fence panels he wants, but the seller (auctioneer) chooses which ones

No matter the variation, what are the benefits of the choice method of selling at auction? Are there any downsides?

The advantages can be increased prices, as if one farmer wants 12 fence panels, and another wants 20, they bid against each other, where otherwise, they might not be forced to do so. In cases such as this, competitive bidding is created by selling choice. The bidder who wants only 12 fears the other bidder might, “take them all” and so he bids to prevent what in fact isn’t going to happen — but he has no way to know that (although we’ll discuss more later).

The disadvantages include the time it requires to sell choice. From the moment the auctioneer says, “Sold!” in choice, there is the extra time required for the high bidder to pick out his fence panels. Of course, the auctioneer could move on to other items while this decision is being made, but still the choice method requires more time. And, sometimes it is difficult to move to other items while the high bidder is choosing, especially if the next item is something that previous high bidder may be interested in purchasing.

Here’s that “later” part about one bidder bidding to prevent another from taking what he wants … selling choice invites bidders to collude. If Albert and Roy both want to buy some fence panels, and neither wants them all, Roy might be tempted to discuss with Albert that he can bid first, and take the ones he wants, and Roy will wait and only bid after Albert is done bidding. In cases such as this, although strictly illegal, prices become depressed.

And, another important note is that the high bidder may only choose from what was offered for choice. In our fence panel example, if another lot of 10 fence panels was around the barn on the other side, the high bidder would have no right to say, “I’ll take these 32 and those other 10 on the other side of the barn” because the other 10 panels were not part of the invitation for offers made by the auctioneer.

It is generally agreed that choice be used only when the items are fairly alike. Selling choice of a Van Gogh painting and a newer Ball canning jar is probably not prudent. One old saying in the auction business is, “If there is an obvious choice, then don’t sell choice.”

Something auctioneers must be alert to, is if they are selling choice and items are not selling for similar prices, maybe they should not be selling choice. Many times the public might sense the auctioneer doesn’t have the proper command of the products he is selling in such cases. Just imagine an auctioneer selling choice of 5 paintings, and the first choice goes for $1.2 Million, and the other 4 paintings sell for $20 each. The presumption would be that if the auctioneer knew he had a significantly higher priced painting, he would have sold it separately; selling choice of these 5 suggests he thought all 5 paintings were about the same.

Further, the time it requires to sell choice is worth discussing more. If an auctioneer sells a lot of “high bidder gets choice …” and his otherwise 5-hour auction becomes an 8-hour auction, prices may actually suffer, rather than be enhanced.

Bidders will only stick around so long at any auction. Kids need picked up from soccer practice, there’s a game on that night, and any number of other things to do. All the benefits of selling choice can be lost if the auctioneer’s crowd disperses before all items are sold.

Because choice requires extra time each time it is employed, most auctioneers consider its proper use to be occasional — or sparingly — rather than all the time.

Lastly, how is the auctioneer’s contract between buyer and his seller affected by selling choice? As we know, once the auctioneer says, “Sold!” a contract is formed. In this case of choice, this collateral contract necessitates another contract with a further determination of quantity and total price, and typically mandates at least 1 (one) in quantity be secured at the agreed-to price each. Only then, is the final contract firm between the seller and buyer, including what sold (how many) and total price.

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.face book.com/mbauctioneer. He is Executive Director of The Ohio Auction School.