In other words, bidders are placing bids on property (chattels) without the actual knowledge of where that property is?
Certainly, auctioneers use the phrase “as-is” and “where-is” but where-is implies the “where” is known. I suppose the approximate location is disclosed, or constructively the bidders can assume a general vicinity? Let’s hope so …
Where the property is located is paramount. Is it 25 miles from me, or is it 125 miles from me? Is it 15 minutes from me or is it 115 minutes from me?
An important note for auctioneers in the United States: If an auctioneer is selling things “as-is” the bidders must be provided the reasonable opportunity for preview. That is, per the Supreme Court of the United States.
It goes without saying that if the location is being kept from the bidders, they are prohibited from previewing — and would have recourse if anything they purchased was not as they had been lead to believe.
This would be either if the property was selling “as-is” or not.
If selling “as-is” without reasonable opportunity for preview, the contract for sale could be voided; if not selling “as-is,” then any descriptions (or material omissions) would be intrinsic to the contract for sale and if found otherwise, would constitute a breach of contract.
Why would an auctioneer not disclose the location? I’ve heard reasons including, “They might steal things …,” “There isn’t sufficient room to preview …” to “I don’t have adequate security …” It would seem to me those are problems which are solvable in light of the potential issues with no preview opportunity.
Certainly an advantage of a live auction is the preview is part of the process. Bidders are literally previewing before they bid, and as they bid. Too, the location is expressly noted — the property is … “right here.”
And it’s important to note that pictures and/or videos do not constitute inspection; Further, bidders cannot be held to a waiver of inspection with as-is terms.
To firmly form contracts between buyers and sellers without preview opportunities, auctioneers have to accurately describe what is being sold, not omitting any latent issues, nor misrepresent any material facts.
Not that describing accurately and disclosing latent issues is an impossible task, but too often chattels are not accurately described and/or latent issues are not noted — something a preview opportunity helps to mitigate.
Overall, total online retail sales for 2014 were estimated at $304.9 billion, accounting for 6.5% of total sales in the United States, with a majority selling with no physical preview opportunity; retail includes commodities which may not practically require prior inspection.
Nonetheless, auctioneers sell primarily non-commodities and can set themselves apart (and should) to provide the seller increased proceeds and better insulation from liability.
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.