Recently, I was asked, “Can an auctioneer auction his own property?” The answer seemed clear enough, and I responded, “Sure, it happens all the time.”
The basics of selling one’s own property to someone else goes on all around us every day. Owners of homes sell (or attempt to sell) their own home, people have yard sales and peddle their own possessions, and large retailers such as Walmart sell items they have purchased for the purpose of resale.
While auctioneers are generally in the business of selling other people’s property at auction, there is nothing that prohibits auctioneers from selling their own property however they desire, including at auction.
In states where auctioneers are licensed, is a license required to auction your own property? In a few states, selling one’s own property at auction doesn’t require any type of license, where selling others property does require a license.
However, a few license states make the distinction that if a person is selling real or personal property at auction for which they acquired “for the purpose of resale,” then they are required to be licensed. Not much different than say the automobile business, as selling and buying cars yourself for your own use doesn’t generally require any license, but engaging in the business of buying cars for the purpose of resale typically requires licensure.
Some states require that when an auctioneer is selling is own property, he must disclose that fact to the bidders.
Do auctioneers always take the opportunity to sell their own property? Not always. Some auctioneers who own an inventory of items, or real property involved, choose to have another auctioneer actually do the bid calling, and they alternatively work the ring, or even sometimes aren’t involved at all.
There is an adage which says, “A lawyer who represents himself has a fool for a client.” So, what about an auctioneer selling his own real or personal property at auction himself? Maybe not as egregious as our attorney phrase would indicate, but there may be some disadvantages.
Would buyers reasonably assume that an auctioneer selling his own property at auction would be more interested in the final bid prices, and more aware of his own cost of procurement, and therefore more likely to run the bid, or no-sale items not meeting his expectations? Certainly, this does go on, but it doesn’t suggest that all auctioneers selling their own property at auction would behave this way.
I would argue that most all auctioneers, or at minimum all seasoned auctioneers, are conscious of the market, and accepting of the final bid price as an indication of market value, and therefore unlikely to use any questionable practices to increase the bids, or no-sale items in hopes of a higher price down the road. With the public watching, even a short term loss will be eventually overcome with future profits via ethical bid calling practices, and lack of arbitrary no-sales.
Selling at auction is one of the most open, fair, and entertaining ways property is sold in the United States and elsewhere. Auctions result in property selling to the highest bidder in a quick efficient manner, therefore minimizing holding costs.
Can an auctioneer auction his own property? Sure, and why wouldn’t he?
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 is Executive Director of The Ohio Auction School.