And I’ve studied the art and science of auctioneering for almost as many.
A few things seem clear to me: we as auctioneers need sellers (clients) with property to sell, and buyers (customers) who will desire to own such property.
Once an auction is secured by an auctioneer, the marketing and advertising of that auction becomes paramount. Bidders must know about the auction or they won’t be bidders.
As I’ve stated before, such auction marketing must be carefully crafted to invite participation. While an auction is designed to maximize price, it must be suggested to the bidders that they might get a deal, or they will shop elsewhere.
We discussed in length the “prospect of a deal” here: https://mikebrandlyauctioneer.wordpress.com/2009/12/11/auctions-and-an-iowa-corn-field/
Auction marketing is much more an art than a science. Portraying an auction as a great opportunity for a deal will likely draw bidders but discourage future sellers — and reversing the portrayal invites future sellers but fewer bidders.
I suppose the phrase I recently saw (I’ll note Western United States) which stated, “We won’t let you pay too much …” was possibly just puffing or sales talk, I wonder why it appeared at all in an auction advertisement unless it deserved some literal interpretation?
We won’t let you pay too much … even if I want to? In other words, a bid above a certain reasonable amount is refused? If I bid too high, my bid somehow reduced? Once a certain price is obtained, bidding is suspended?
I remember telling an auction school class some years ago that I’ve never held my hand up at an auction and said, “Stop bidding!” Not once — ever. In fact, such would be in violation of my fiduciary duties to my client.
That is, if my client wants to maximize price. If a client didn’t want to maximize price, then auction marketing might not be the best choice. There are many other ways to sell property where maximizing price is not intrinsic.
Have such cases ever been litigated? They sure have … where sellers sued auctioneers for saying “Sold!” too quick or otherwise not endeavoring to maximize price (insufficient marketing, improper descriptions, venue issues and/or order-of-sale questions.)
Further on this issue of not paying too much, regardless of the final bids, would a client have a legal case citing that the auctioneer affirmed in his adverting that he was indeed not maximizing price? That type of case seems academic.
Not letting your bidders pay too much? A better strategy would be letting them bid whatever they want — even if it is “too much” — whatever that means.
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. He serves as Adjunct Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.