Do all these words mean the same thing? I believe this item is worth $140,000? I estimate this at $140,000? The value of this item is $140,000? Guide: $140,000? An auction I was watching the other night was using “Guide: $140,000” for an item that was clearly not.
We wrote about the word, “worth” and suggested this might amount to an expressed warranty — in other words, if I say it’s worth $140,000 shouldn’t it be? https://mikebrandlyauctioneer.wordpress.com/2022/09/14/could-worth-be-an-expressed-warranty/.
It appears to me that the word, “Guide” suggests some sort of actual “guide” with this item listed at $140,000 in value, which is factual. However, in reviewing the sale (or not) prices, it certainly looks like there is in fact no guide suggesting this.
We wrote about coming in way below pre-auction estimates, and this unfortunate perception that tends to instill in potential auction sellers. https://mikebrandlyauctioneer.wordpress.com/2017/06/22/coming-in-waaaaaay-below-the-pre-auction-estimate/.
We have long held that with the Internet and the vast availability of value data, nobody is fooling anyone with a “Guide: $140,000” that sells for $2,500. So, why is someone suggesting a guidebook or the like has this lot listed as worth $140,000 when it’s not? I have reason to believe there’s no buyer at $2,500 so maybe it’s all a ruse.
Maybe this auctioneer has the misconception that if he puts the actual value, nobody will bid past that amount. We addressed this fallacy here: https://mikebrandlyauctioneer.wordpress.com/2020/11/20/bidders-wont-bid-past-disclosed-reserve/. Wouldn’t the message “We sold a $3,200 coin for $2,500” be better than “We sold a $140,000 coin for $2,500?”
There really isn’t any necessity to display the estimate (Guide?) at all, especially if items are selling absolute. We have held with minimum bids, context can be helpful — such as appraised for $140,000, minimum bid $45,000″ — but is not essential.
Understanding that appraisal (which determines value — an opinion) is many times more an art than a science, possibly are these auctioneers just not good at appraising property? I don’t think that’s the case, but that might be their best answer if asked how they came up with some of these “estimates.”
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, Brandly Real Estate & Auction, 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 and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.