In the 1990’s, we were selling quite a bit of real property at auction — some weekends over 50 properties in one day. Many times, interested parties would want to buy one or more property prior to auction. Of course, any offers received were presented to our seller.
One afternoon we were discussing offers prior with our staff and our marketing coordinator remarked, “Don’t those offers need to be on our contract — in other words, as-is, no guarantees, and address our 10% buyer’s premium?” I told her that was a great idea, but that we couldn’t dictate what offers from other people looked like.
Offers come from offerors — and those offerors determine the price and terms of those offers. I told her that if we (or our sellers) wanted certain terms in those contracts, we could counter those offers with our preferences … but not require original offers contain certain provisions.
“But couldn’t we say, any offer must contain … or in essence be ‘on our contract?'” she replied. I informed our group that we could say that, and if the offeror agreed to write his offer on our standard contract, that would work, but that we could not require it.
Our capable marketing supervisor wasn’t finished … “How about we put in our contract with our sellers that any offers must be on our auction contract?” I told her we could do that, but that an offeror isn’t party to that contract — so such wouldn’t obligate him in any way.
Auctioneers are charged with selling property — and typically obligated to maximize the seller’s position; that is, along with following the client’s legal directions and presenting any pre-auction offers.
If the seller wants to accept a pre-auction offer, that is up to the seller, not the auctioneer. The terms of the listing agreement (auction listing contract) would then dictate what commission and/or fees would be deducted from that gross sale amount.
Lastly, it seems prudent for all auctioneers to put in their advertising, “Subject to prior sale” as in essence all property is as such. This way, interested parties are notified of that possibility — and opportunity.
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.