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mikeauctionhouseManny owns an auction house. He holds a twice monthly auction, where he sells antiques, collectibles, guns, coins, furniture, etc.

Sometimes, people stop by Manny’s auction the day before — or the afternoon of — and see an item or two they want to buy “right now.”

Usually, these interested “buy-it-now” inquirers ask Manny, who says,

    “These items are contracted to be sold at auction, so I can’t sell anything ahead of time. You’re welcome to come to the auction, or leave me an absentee bid on any items in which you are interested …”

Therefore our question today concerns if the “Auctioneer can’t sell items prior to auction?”

Typically, auctioneers’ contracts with their sellers dictate that the auctioneer has the exclusive right and authority to sell whatever property is deemed to be sold per the contract — by auction.

Therefore, the auctioneer would not have the authority to sell any of said property by any other method, including by private treaty prior the day before.

However, there are instances where property can be sold prior to auction:

  1. The seller has the right to withdraw any property prior to auction, and then sell it, keep it, give it away, etc.
  2. The seller and auctioneer can include a clause in their contract which states that the auctioneer has the authority to sell prior to auction if he feels the price is reasonable, and/or with the seller’s consent.

In personal property exclusive right to sell contracts, this is atypical. However, in real property exclusive right to sell contracts, this is not so unusual.

In fact, most all states hold real estate licensees to a standard which includes presenting all offers (including those prior to auction) and the seller retaining the right to accept or reject such offer.

And, especially in light of receiving an offer far in excess of what the auctioneer is reasonably expecting auction day … it’s prudent to accept an offer prior.

For those who think auctioneers cannot sell anything prior to auction, the simple answer is two-fold:

  • The auctioneer can only do anything which is permitted per his or her contract with the seller/owner.
  • The seller has a right to withdraw prior to auction, and therefore can sell his or her own property prior as desired.

It’s worth noting that with an “exclusive right to sell” auction contract, the auctioneer would be entitled to earn a commission on the sale of any item which is sold prior to auction. However, it’s likely his commission would be forfeited for any item withdrawn from the auction by the seller, and then sold, as the “secondary transaction” would likely not be held to the auction contract’s commission application.

It’s also worth noting that with an “exclusive agency” the seller would have a right to sell without paying the auctioneer a commission. Further, in an “open listing” arrangement, no commission would be due the auctioneer unless he could generally prove procuring cause.

Can an auctioneer sell property prior to auction? Maybe. Can property be sold prior to auction? Almost assuredly.

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.