It seems like a simple question — when is an item “Sold!” at auction? In a live auction, most people would conclude it’s when that gavel falls …
However, online it’s apparently not that clear. It could be when the auctioneer (or software) says “Sold! or it could be when the invoice arrives, or when the entire auction “event” is over, or when the rooster finally quits crowing that evening … or whenever it appears.
I even saw a suggestion lots could be “unsold,” in other words, deemed sold then not — as in withdrawn? While that seems a bit far fetched, let’s look at auctioneers finding various ways to denote “Sold!”
First, state law in every state says, “A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner.” It may be debatable if this customary manner is one the auctioneer chooses (thus customary for him or her) or if this suggests customary (as in customary in commerce generally.)
Nonetheless, even if every auctioneer can essentially denote, “Sold!” however they want and the effect is the buyer and seller are in contract — distinctly different than a live auction event bidder — online, bidders have access to thousands of auction events running simultaneously; thus one bidder may be exposed to dozens (if not more) ways “Sold!” is being denoted all at the same time.
Here’s the danger. The more complex, confusing, puzzling, inconsistent auctions in general become, the less people will be attracted to this way of purchasing property. In contrast, what do countless national hotel chains, restaurants and other retail establishments endeavor to provide? Consistency.
Auctioneers are right to assume they and their sellers control the terms and conditions for their auctions — with the obvious concern that those terms and conditions don’t deter nor discourage participation, nor invite litigation. However, we as an industry might want to more look at our buyer pool and ask, “What would they expect?”
The more a hotel guest or restaurant patron (or auction bidder) sees essentially the same policies, payment methods, terms … the more he tends to think those terms are normal for the industry — thus customary — thus acceptable. On the contrary, the less customary, normal, everyday auction bidding becomes, the less acceptable.
Lastly, I would encourage every auctioneer to avoid situations where your “customary closing” is not customary for the industry giving your buyers possible reason to pursue damages, claiming your particular customary closing isn’t.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.