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AuctionSaleThe more and more auctions are used to sell real and personal property, the more public perception of the advertising of such events becomes material.

For decades, all over the United States, auctioneers have been saying in marketing materials: “Selling at auction …” denoting a time and place. But, is whatever is being offered that day really, “selling?” In many cases, it is not necessarily.

Auctions are by default, with reserve. That means that unless explicitly denoted otherwise, the seller may withdraw the property from the auction anytime up until the announcement of, “Sold!”

So, would a bidder potentially cry fowl if an auctioneer advertised that a 5 acre tract was “Selling at auction …” when in fact, the seller reserved the right to reject the final bid, and not sell the property? In fact, bidders have done just that, and filed lawsuits asking for compensation.

A similar case was the landmark case known as Drew v. John Deere Company of Syracuse, Inc., 19 A.D.2d 234, 241 N.Y.S.2d 267, 269-270 (1963) where the judge in the case pointed out that “selling to the highest bidder” was not the same as a without reserve auction — even though Drew felt the advertising clearly denoted an absolute auction.

Based upon Drew v. John Deere Company of Syracuse, Inc., it would seem that a court would likely favor the use of “Selling at auction …” meaning that the property is merely being offered for sale, subject (or not) to the seller’s consent.

However, might such thinking lead to other questionable tactics? Let’s say we have that 5 acre tract scheduled for auction July 7. What about …

    • “It sells July 7! 5 Acre Tract located …”
    • “It will sell! 5 Acre Tract on July 7 located …”
    • “Seller says sell it! 5 Acre Tract on July 7 located …”
    • “We are going to sell this 5 Acre tract on July 7 located …”
    • “On July 7 this 5 Acre tract will sell located …”

While any of these variations might be ruled legal in light of the seller reserving the right to not sell this 5 acres, does such advertising invite negative public perception, or worse, litigation? I think so.

Could (or would) an interested bidder conceivably say, “You said this property was going to sell, but you didn’t sell it” given a with reserve auction? “What exactly does ‘It will sell’ mean if the seller can turn down my high offer?”

No auctioneer is looking for upset bidders and/or a lawsuit. Upset bidders tell others about their experience, and lawsuits cost money to defend regardless. It seems clear to me that if auctioneers are saying that something is, “selling” and it’s (maybe) not, they are asking for both.

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.