Aaron Traffas inquired about a certain type of “customary closing” he witnessed at an auction.
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.
- 2,750? $2,750? I’m at $2,500 now $2,750? “Sold!” for $2,500 to number 361.
- 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.