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Sometimes auction bidders (mostly personal property) bid and then don’t pay. Some auctioneers apparently pay their seller minus commissions and keep the item, reselling it themselves keeping the subsequent proceeds.

First of all — auctioneers are advised that in order to do that, you better have your client’s knowledge and consent — memorialized in the contract between you and your seller. Otherwise, you have no such authority to do that.

“Why would that be? We do it all the time.” If an auctioneer sells a lot the transfer of title goes from the seller to buyer — not auctioneer. If title doesn’t pass to a buyer for whatever reason, it remains with the seller.

Further, as an auctioneer pointed out … what if this happened?

If I’m a crook … I’m going to consign a $50 item with your auction, and then secretly send my cronies to your sale to run the bid up to $500. They won’t pay of course. Are you saying you’re gonna pay me out on the $500 hammer price and then re-auction the item next week as your own?

Of course, such might be criminal but an auctioneer policy as we’ve described here might just suggest this is prudent behavior. If this policy of paying, keeping and reselling isn’t in your auctioneer/seller contract, may we suggest you, “Ask your client?” https://mikebrandlyauctioneer.wordpress.com/2011/06/27/ask-your-client/

For that matter, an auctioneer could do worse: Let’s say an auctioneer wants to take title (ownership) of any lots which in his opinion are selling below market, but doesn’t want his seller to know … so he “sells” lot(s) to fictitious bidders and then pays the seller, reselling for his own profit.

Generally, auctioneers can bid themselves but with this ruse, it appears disinterested third-parties are bidding/buying keeping the auctioneer’s ownership covert; this may discourage auctioneers from endeavoring to maximize price.

If lots (real or personal) are not selling (no bid, bad high bidder) at your auction — what happens next with those lots? The contract between the auctioneer and seller can address these situations and/or you can check with your seller to secure next steps. However, title never transfers to the auctioneer automatically.

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.