A recent caller asked me, “If the auctioneer purchased my items, do I still pay commission?” My answer was, “Yes, you do, so long as the auctioneer had the right per your contract to bid and buy.”
Auctioneers sometimes buy personal property — and even sometimes buy real property at auction while they are bid calling. Some states regulate such activity in that auctioneers can or can’t bid at all, or auctioneers can’t bid on real property (dual agency.)
My caller was maybe suggesting if her auctioneer purchased an item, he wouldn’t pay full price as he’s earning a commission so maybe she shouldn’t pay it. That is a longstanding myth that we talked about here: https://mikebrandlyauctioneer.wordpress.com/2014/08/25/auctioneer-doesnt-pay-full-price/.
Another issue generally with auctioneers purchasing is that their bid is (was) higher than anyone else’s. Don’t sellers want their property sold to the highest bidder? It’s rare a seller prefers the backup bidder’s price.
As we suggested, if an auctioneer desires to reserve the right to buy at his or her own auction, it’s important state law (and federal law) allows, the contract with the seller notes such knowledge and consent, and the bidders are notified in the terms and/or announcements.
Finally, if the auctioneer is bidding while bid calling or with his or her own identity on the online platform, some bidders might decide they don’t want to bid against the auctioneer fearing retaliation. Bidding can be done through a third-party to avoid this possibility.
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 Supreme Court of Ohio for attorney education.