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An auction is defined as a
public sale of goods or property in which prospective purchasers bid until the
highest price is reached.
Definitions
Why are
goods sold at auction?
What type
of goods are auctioned?
How does an
auction work?
Hot
auction tips:
 Definitions
Absentee Bids
You can bid on an item without attending an auction personally by submitting
an "absentee bid". The bid is submitted on an item prior to the
auction starting by whatever means the auctioneer has specified.
Sealed Bid
Not a true auction. Confidential bids are submitted and opened only at a
predetermined place and time.
Absolute Auction
Absolute auctions are won by the highest bidder without any limitations or
reserve prices being imposed
American Auction
This type of auction has a number of items offered at the same price, the
highest bid for the most items wins the bidding.
Appraisal
When an item is valued or confirmed by an auctioneer it is known as an
appraisal the person doing appraisals may also be known as an appraiser.
Auctioneer
The person who conducts an auction sale
Auction House
Usually refers to auctioneers who hold auctions at their own premises, the
company is referred to as an auction house.
Catalogue Auctions
These auctions are usually held in a location different to where the actual
goods for auction are kept. Viewing of the goods will have taken place prior
to the auction.
Dutch Auction
An auction where a seller has listed multiples of the same item. All winning
bidders pay only the lowest successful winning bid amount.
Hammer Price
The price reached by the auctioneer when the hammer or gavel is dropped.
On Site Auctions
If a company has gone into liquidation and its assets are to be sold at
auction that auction sometimes will take place at the company site rather than
at an auction house , this is done when it is not practical to transport the
goods to the sale the goods are sold "On site".
Online Catalogue
The auctioneers often place details of the lots for auction on their website.
This can be in HTML, i.e.. as a web page, or can be a file made available to
you for download. ( Both a page of HTML and a file for downloading can be
saved to disk on your machine for viewing off-line )
Private Auction
Bidders identities are not disclosed in this type of auction.
Proxy Bidding
Submitting a confidential maximum bid to an auction service. The auction will
automatically increase the bid to maintain the high bid. The proxy bidding
will stop when the bid has won the auction or reached the limit of the proxy
bid.
Reserve Auction
The seller has set a minimum (reserve) price for the lot and can decide wether
to accept or refuse a bid. The reserve price may not be disclosed.
Yankee Auction
An auction where a seller has listed multiples of the same item. Each winning
bidder pays their exact high bid.
Why are
goods sold at auction?
There are several reasons why
goods may be sold at auction and it is important to know why the goods are
being sold and where they came from, this information can be found by
consulting with the auctioneers before the sale or it may be stated in the
catalogue of lots relating to that auction sale. One of the following may
apply:
- The goods are being sold
to raise cash to pay of debtors if the previous owner has gone into
liquidation, receivership or bankruptcy.
- The goods are being
entered in the hope of a dealer making a profit from their sale.
- The goods are being sold
by the owner to create space for new stock
- The goods are surplus to
the owners requirements due to new stock being acquired.
- The goods have been part
of a leasing agreement and the term of lease has ended and the goods are
not required by the leasing company who are now the legal owners.
- The goods will not sell
any other way due to poor demand or over supply.
- The goods may be part of
an illegal consignment and have been confiscated by an official department
who now wish to dispose of them.
- The goods may be
government department or armed forces surplus stock due to being out of
date or over stocked.
- The goods may have been
stolen and the previous owner cannot be traced by the appropriate
authorities.
What type
of goods are auctioned?
Just about anything can be
sold at auction here are some examples
ANTIQUES
Furniture - Jewelry - Antiquities - Artifacts - Clocks & Watches
FINE ART
Paintings - Sculptures
COLLECTIBLES
Stamps - Coins - Books - Postcards - Medals - Print - China & Glassware -
Memorabilia
LEISURE
Caravan & Camping - Marine - Aviation - Sports Goods
PROPERTY
Houses - Flats - Land - Commercial Premises - Warehouses - Workshops - Studios
HOUSEHOLD
Furniture - Appliances - Fridges - Freezers - Washers - Dryers - Electrical
Goods - Hi-Fi's - T.V's. - Videos - Clothing - Carpets - Beds - Garden
Equipment
CONSUMABLES
Foodstuffs - Wines - Spirits - Beers -
OFFICE
Equipment - Furniture - Consumables - Telecommunication Equipment
COMPUTER
Home Systems - Business Systems - Parts & Peripherals - Printers -
Scanners - Modems
TRANSPORT
Cars - Vans & Commercials - Trucks & H.G.V. - Motorcycles - Vintage -
Motor Parts
INDUSTRIAL PLANT & MACHINERY
Contractors Plant & Machinery - Engineering Machinery - Printing, Chemical
& Fabric Equipment - Commercial Catering Equipment - Stock Materials -
Scrap Materials & Equipment
AGRICULTURAL
Buildings - Machinery & Tools - Livestock - Vehicles
GOVERNMENT
Armed Forces - Government Department Stock - Seized & Confiscated Goods
How does an
auction work?
When you arrive at the
auction site you may need to register with the auctioneers in order to obtain
a bidding number, the information required is usually your name and
address and you may also need to pay a returnable deposit. You should be
familiar with the registration requirements for the particular auction before
you arrive in case a large deposit is required.
If you have not viewed the lots for auction prior to the auction day you will
need to allow yourself time to inspect your prospective purchases
before the auction starts if this is allowed, some auctions may not allow you
to view the lots other than in the specified viewing dates and times,
with some "catalogue" auctions you may not be allowed to view the
lots after the auction has started. You should confirm these details with the
auctioneers prior to the auction date.
When a lot you are interested in bidding on comes up for sale the auctioneer
will announce the lot number ( either found in the catalogue next to
the item or placed on the item during the viewing period ) and give a brief
description of the item usually tied to the description given in the
catalogue.
A starting bid will be suggested by the auctioneer and usually bidding
will start below this price so do not assume the auctioneers starting bid is
the lowest price available. If the item has a reserve price the auctioneer
will often start the bidding above this price and reduce the start bid towards
the reserve price until a bid is made. The auction catalogue will usually
display a guide price for the item which is above the items reserve price.
You are free to start bidding at any time after the auctioneer has announced
the starting bid. Some auctions especially liquidations, bankruptcies and
receiverships have no reserve prices so give it a little time before you start
your bidding, if there are no other bidders your first bid may be the price
you pay.
If similar lots are listed together in the catalogue and you are the buyer of
the first lot you may then have the option to purchase the similar lots
at the same price as the first.
When bidding it is usual to get the auctioneers attention by raising your
hand or making some other clear gesture to the auctioneer followed by the
amount you wish to bid if different to the auctioneers announced price. Now
you have started bidding the auctioneer will return to you every time the bid
is against you to see if you wish to raise your offer, a clear shake of the
head will indicate to the auctioneer that you do not wish to continue bidding.
Bids go up in steps
controlled by the auctioneer and until the bid nears the assumed final price a
bid of less than this amount will not usually be taken.
If your bid is the final bid and the price reached is above the items
reserve price you have been successful in your purchase.
After you have won the bid you will have to pay an immediate deposit,
the amount of deposit will be stated in the terms and conditions of the
auction catalogue. The type of payment method i.e. cash, bank drafts, credit
cards will be stipulated in the catalogue.
The amount of time given to pay fully for the purchase and clear the
goods from the auction house will also be given in the catalogue.
Remember it
is usual for the goods to be the responsibility of the purchaser after the
hammer has fallen
If the items for auction are
large, heavy or difficult to move, representatives of removal companies will
usually be present, but this is worth checking with the auctioneers before you
make your purchase.
Hot
auction tips:
- Before traveling any
considerable distance to the auction, you should obtain a catalogue of
items to ensure the goods for sale are what you require.
Certain auctions can be subject to cancellation at short notice and it is
therefore a good idea to phone on the morning of the sale to confirm the
sale is going ahead.
- You should inspect the
items thoroughly as most auction items are sold without guarantees, if
items are described as faulty check that the faults can be easily
repaired, sometimes you can test the goods before the auction starts, ask
the auctioneer if this is possible.
Some motor vehicle auctions give you a period of time after the sale in
which to return the vehicle if it is found to be faulty, again check this
with the auctioneer prior to bidding.
- Think about setting
yourself a price limit on the goods you are interested in and "stick
to it", how much would the item cost new with a guarantee?
Remember a "buyers premium" may be added to the final bid price
at some auctions and local taxes may also be added to the price ( check
the "conditions of sale" in the catalogue or consult the
auctioneer before bidding )
- Catalogues are not set in
stone and items listed can change.
- Listen out for any changes
stated by the auctioneer in the description they give of the item at the
start of bidding.
- If you bid for the wrong
lot, tell the auctioneer immediately, although you have a legal obligation
once you have won the bidding the auctioneer may present the item for
auction again, but this is purely at the auctioneers discretion and you
may have to make up any difference if the final price is lower than your
original successful bid.
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