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We wrote about issues with auctioneers using an opening bid to suggest a minimum bid a few months ago. That post is here: The Opening Bid …
This practice is normally used to prey on unsuspecting bidders, drawing them to an auction under the pretense that they might buy the home of their dreams for as little as the “nominal opening bid.”
Take a look at this sign below; you can note that this home is selling at auction, with a nominal opening bid of $50,000. Does that mean that if you attend this auction, you can buy this property for $50,000?
Actually, despite what your eyes tell you, this home will most likely require a bid of much more than $50,000 in order to sell. In discussing this technique with different auction firms using such, I was assured that the ‘nominal opening bid’ was NOT a reserve amount or minimum bid.
And, that’s just the problem.
Auctioneers have used published minimum opening bids for 100’s of years. What those auctioneers have been communicating with such advertising is that a property with a minimum bid will sell for that price (or more), and not be subject to the seller’s acceptance or rejection. In other words, a property with a $50,000 minimum bid will sell so long as someone bids $50,000, or more.
In the case of the nominal opening bid, as noted it does not serve as a minimum nor reserve, so what purpose does it serve? What else but bait and switch?
- The bait is “Hey, look at this opportunity, you might buy this house for as little as $50,000!”
- The switch is “Well, now that you’re here, please realize we aren’t going to sell this house unless we want to …”
For auctioneers, bidders are typically customers. What do auctioneers owe their customers? We noted in that post:
- Fair Dealing
I would submit that if the $50,000 is indeed a minimum bid, then say it is. However, if it is just advertised to entice bidders to think it is a minimum bid, when it in fact isn’t, then it’s deceiving.
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.