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Are you a “professional” auctioneer? One who makes a living as an auctioneer? That would be a common definition, but others are telling us that to be professional, one must misrepresent, falsify, distort and/or lie to bidders.

Do I think most auctioneers are lairs? Do I think to be a “professional” auctioneer, one must lie? I do not. Further, I believe very strongly that we as auctioneers must be honest, ethical and sincere with our sellers, bidders and buyers.

In fact, I watched a video recently of a Livestock Marketing Association World Champion auctioneer helping a newer auctioneer, proclaiming that “You indicate what you have, and then ask for the next increment — of course, you can’t say you have … if you don’t.” I suspect most would consider him a “professional auctioneer.”

Let’s take a look at this contrary position:

I think the argument could be made that as a professional auctioneer you are allowed (and possibly obligated) to imply a realistic opening bid along with a realistic bidding increment.

So … this statement implies to me that as a professional auctioneer, one must misrepresent bid amounts to bidders. Further, to suggest that such doesn’t have an effect on hammer price is foolhardy as the astute bidder doesn’t participate in such schemes … and what does less bidders result in?

Here’s a quick summary of permitted/not permitted auctioneer bidding in the United States:

     Q: Can auctioneers bid themselves with the intent to purchase?
     A: Almost every state permits that.

     Q: Can auctioneers bid for the seller?
     A: In all states, that is legal in a with reserve auction or a forced sale.

     Q: Can auctioneers pretend to take bids that aren’t there?
     A: In the United States, that is illegal.

Concentrating on the last Q/A above, the Supreme Court of the United States has stated that taking fictitious bids is illegal/actionable — and further I can assure everyone that fraudulent inducement is actionable as well.

If an auctioneer says, “I have $5,000 and I want $6,000” there is an inducement to bid $6,000 but it becomes fraudulent when the $5,000 bid wasn’t really made. We wrote more about this here: https://mikebrandlyauctioneer.wordpress.com/2018/06/21/that-other-bidder-and-fraudulent-inducement/.

How might one prove that you as an auctioneer didn’t really have that $5,000 bid? If nobody bids $6,000 so the $5,000 bid sort-of disappears and you’re suddenly saying, “I have $2,000 and want $2,500 …” that might be proof. If that continues to happen, that’s even more proof.

It might be prudent for “professional” auctioneers to want to stay in business — and one sure-fire way to be out of business is to commit illegal acts. I can assure you that for deals involving millions of dollars this is even more important for all us (auctioneers) to remember.

Further, new generations of bidders/buyers entering the world of commerce have lots of choices. The Internet has opened up a world where there is more speed, transparency and ease. Traditional auctions — especially with all these tricks and games — is not something these buyers (maybe any buyers) are looking for …

If you as an auctioneer feel you must take bids that aren’t there, misrepresent bidding and/or lie to bidders, be advised there are many possible severe consequences well beyond bidders not participating in your auctions; in any court of law in the United States, bid calling is much more a science than an art.

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.