Frequently Asked Questions
Say the word “auctioneer” and the rhythmic cadence of an auctioneer’s chant comes to mind. The art of perfecting the auctioneer’s cry take years of practice, but understanding what auctioneers are saying is simple.
- The auctioneer’s “bid call” can be broken down into two parts:
- Statement (Example: I have 5 dollars)
- Question (Example: Would you bid 10)
"I have 5 dollars, would you bid 10, would you bid 10, now 10, I have 10 dollars, would you bid 15…"
The cadence and repetition of words and use of “filler words” vary from one auctioneer to another, but the format is usually the same.
Always remember that the number the auctioneer keeps repeating is the dollar amount they are wanting. Are you ready to bid?
Understand the basic types of auctions: absolute, reserve and subject-to-seller confirmation. Arrive early and register for the auction. Bid in sync with the chant. You should be listening closely and following the increasing bids.Remember: The number the auctioneer is repeating is where the bid is and what the auctioneer is now accepting.
There are different types of auctions (i.e. Reserve, Minimum Bid, etc.). An “absolute auction” is an auction where the property is sold to the highest bidder. Unlike a reserve auction, there is not a reserve price that must be met to complete the auction sale.
A “reserve” auction means that a price has been set between the seller and the auctioneer that must be met to complete the sale. Reserves are often used to provide the seller with security that they receive at certain amount of money to meet their sale goal.
Whether you’re selling sentimental and prized possessions or looking to buy one-of-a-kind treasures, an auction is just the place to make things happen. Contrary to what some might view as complicated and time consuming, a fast-paced auction is one of the most efficient ways of converting your property or assets into immediate cash. With the combination of pre-sale marketing and the auctioneer’s attention-grabbing chant, you could have enthusiastic, attentive buyers aggressively competing to purchase your property.
Everywhere you turn at an auction, there’s a thrill in the air as potential buyers find something they want and set out to successfully bid against others who want the same thing. Auctions bring out the competitive nature in all of us!
We encourage you to view the property before the auction starts. Due diligence on the part of the bidder is important with auctions. Contact the auction company managing the auction and inquire about times when previews will take place. Auctioneers want you to feel comfortable on auction day. Always feel free to call and ask questions.
A “buyer’s premium” is commonly used in auctions today as a form of payment for the auction company conducting the auction. The “buyer’s premium” is an advertised percentage of the high bid or flat fee added on to the high bid to determine the total contract price to be paid by the buyer.
We hear this misconception a lot! In fact, to bid at an auction or for your bid to be received by the auctioneer, you typically need a bid card. You will receive this bid card at registration and it will have a number on it. This number allows the auction company to know who is bidding from their list of registered bidders. If you mistakenly bid or the auctioneer misinterprets your movement as a bid, immediately notify either the auctioneer or their staff.
We encourage people to explore auctions by attending one as a spectator. There is no better way to learn about auctions than to watch one firsthand.
Minimum bids are routinely used at auctions to provide prospective buyers with an initial price range of where bidding will begin. If an auction has a “minimum bid” of $50,000; prospective bidders will know that the auction will start with an opening bid of $50,000 and that the asset will not sell for anything less than $50,000. Often times, auctions are advertised with an “opening bid”, this should not be confused with a “minimum bid”. An “opening bid” simply means a price where the bidding opens.
Cash payment is commonly NOT required at auctions.
Auction companies accept multiple forms of payment: cash, check, or credit card.
When attending real estate auctions, auction companies may require a specific down payment on-site in the form of a cashiers check to qualify as a bidder. Financing is available on auction day with many auction companies where lenders can qualify you for loans on-site. It is important that prospective bidders read all documents regarding the sale prior to auction day.
The person you see and hear working amongst the crowd of bidders is known as a ‘ringman’. This individual is part of the auction team and is an extension of the auctioneer. The job of the ‘ringman’ is to convey bids back to the auctioneer from the crowd. When bids are received in the crowd the ‘ringman’ will yelp to signal the auctioneer that they have received a bid and to increase the bid amount. These individuals are also there to help answer questions you may have while the auction is being conducted.
This is one of the biggest misconceptions with auctions. The competitive bidding of an auction and the bidding of prospective bidders sets the price and market value of an asset. The item will not sell for more than the highest bid and will not sell for less than the high bid. You, the consumer, and other bidders determine the market value of an item when you buy at auction.
One of the most common statements made at auction, “as is, where is” simply means the property is being sold without warranty and that there are no contingencies based on the status of the asset being sold. It is important that you inspect all auction properties before you bid, both real estate and personal property. It is your job as a well informed bidder to thoroughly inspect and know what you are bidding on BEFORE the start of the auction. Once you bid and buy an asset at auction, you are the new owner.