A rare 18th-century coin — a 1794 Flowing Hair Silver Dollar — expected to sell at auction for over 10 million goes unsold. That’s right, it was put up for auction and didn’t sell.
We as auctioneers love the phrase “Auctions Work!” and they usually do, but when something doesn’t sell, it’s more “Auctions Don’t Work!” This isn’t a symptom of auctions generally, and rather an auctioneer and seller who should have agreed to have the seller keep the coin.
Any time real or personal property is put up for auction and not sold, it sends the wrong message. For example, others see this coin not sell and think that their coin probably wouldn’t sell either, likely choosing to sell their prized coin in some other manner.
Selling absolute (without reserve) is not always an option, but selling with reserve should only be attempted when the seller has reasonable expectations. Without reasonable expectations, it’s better to not sell at auction at all.
We look for sellers who have equity, a sense of urgency, and reasonable expectations. It’s not a terribly bad idea for every auctioneer to endeavor to find these three traits, and work for sellers who really want to sell, rather than “maybe” want to sell.
Bidders and buyers don’t like property “not selling” either, and certainly are more attracted to without reserve (absolute) auctions. That’s the main reason absolute auctions attract higher prices — there are more bidders participating. There’s not much “prospect of a deal” in a minimum bid, seller confirmation, or otherwise reserve auction.
We wrote about the prospect of a deal years ago: https://mikebrandlyauctioneer.wordpress.com/2009/12/11/auctions-and-an-iowa-corn-field/. An auction without this key characteristic will almost always garner less bidder participation and lower prices.
Lastly, some low or reasonable reserves ($10,000,000 coin with a $6,500,000 reserve, for example) can produce results, but always prompt this question … if this is a $10,000,000 coin, who wouldn’t give $6,500,000 for it? In other words, why not sell it absolute?
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, and an Instructor at the National Auctioneers Association’s Designation 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.