Have you ever wanted to go to an auction? Are you unsure about how they work? While auctions seem rather freewheeling, there are actually customs, rules, and regulations that you should be aware of as you wait for the bang of the gavel and the shout of, “Sold to Number 27!”
First, auctions have previews where you can inspect all the merchandise that will be going onto the block. Make sure that you spend time inspecting items that you are interested in carefully, as all goods are sold as is. Box lots, or boxes that have several items in them that are going to be sold for one price, can hold hidden treasures that the auction house overlooked. At the same time, some of the merchandise in box lots, or any of the other items for sale, may be damaged. You should take this under consideration when deciding if you are going to bid. Whether you are interested in a single item or a box lot, note the auctioneer’s item number on a piece of paper that you have brought with you, along with a description of the item itself.
If you are interested in bidding on anything after looking over everything that is available for sale, signup with the office to get a bidding number. You will have to give the office personnel your name, address, and phone number at a minimum. Some auctions require a refundable deposit against any purchases that you might make. If you have a resale license number, the auction house will need to have it at this point so that you will not have to pay any sales tax.
Before you leave the office, it is important to take note of the “buyer’s premium.” A buyer’s premium is the percentage that the auction house is going to charge you on top of the closing bid. Buyer’s premiums run from roughly ten to twenty five percent. So, if you win a bid for a fur coat for $100 and the buyer’s premium is ten percent, you will have to pay $110 for your coat, plus tax if you do not have a resale license.
Now, your work begins. Review your notes and write down the maximum amount of money that you are willing to part with for each entry on your list. Do not forget to deduct for the buyer’s premium and taxes. Looking back to the fur coat that we just bought in the last paragraph, if you really wanted to walk out the door with that coat for $100, the most you should have bid was just over $80 if there was a ten percent buyer’s premium and a seven percent sales tax.
The auction is getting ready to start. The best place to sit if the auctioneer does not know you is as directly in front of him or her as you can get so that it is difficult to miss your bid. If you place a bid, raise your bid card with the number facing out so that it is easy for the auctioneer to see your number. Be careful–there is no such thing as “Whoops! I made a Boo-Boo” when bidding. If you bid on a lot, the auctioneer calls your number, and you win the auction, you are legally required to follow through on a purchase even if you made a mistake on the price or the lot number.
It is a good idea to watch the bidding process a round or two before jumping in to get an idea about how the auctioneer conducts business. You should get a feel for how the auctioneer increases bids. Some auctioneers open at a low dollar amount and increase each bid by $5. Some automatically increase it by $10. Some auctioneers will take the bid up to $100 by increments of $10, and then jump the level up to $25 until the bid hits $200, and so on. You should also listen to how quickly the bid goes up. If the bidding is going around between two or three people quickly, you may end up spending more money than you wanted just because you did not put down your bidding card quickly enough. Some auctioneers will also allow you to “split” the bid. For example, instead of upping the bid by the requested $10, the auctioneer will let you bid up $5. The bidder shows the desire to split by lifting up a hand horizontally, with the palm facing down to the ground. The auctioneer will either accept the bid or refuse it and ask for the full increase.
There is one more thing to be aware of in the basics of auctioneering. Auction houses do not always own the items that they are selling. Sometimes they sell consigned items, or merchandise that is still owned by someone else. The owners may set a “reserve,” or the minimum amount of money that they are willing to accept. The auctioneer may or may not inform you in advance that there is a reserve. So, you may end up being the high bid on what you want, but still may not be able to take it home because your bid did not reach the minimum that the owner wanted to accept.
When you are ready to leave, go to the office and pay for your prizes. Many auction houses will let you come back later to pick up your merchandise. For example, if you have bought some furniture, you might need to rent or borrow a truck in order to take your couches home. The auction house will prefer that you remove your purchases as soon as possible. Check with them as you are paying to find out how long you have to arrange shipment.
Now, let us look at some of the intricacies of auctions.
Did you notice when you tried to get a seat that all the ones up front were already taken, and that they had names taped to the chairs? If you want a seat up front and center, try to get to the preview early. Many houses will allow you to “reserve” a seat after you get your bidding number and come back just before the auction starts.
Be very careful with your hands and your bidding number. People sometimes wave their hands around for emphasis when talking. If the house thinks you are bidding and you are actually talking, you may be able to tell the auctioneer that it was a mistake once, but you are less likely to be taken seriously, or even ignored, in a heavy bidding situation.
You might notice that there appear to be “regulars” who seem to know a great deal about everything that they are bidding on. Do no be intimidated. The “regulars” are most likely to be dealers, or people who buy for resale. If you have done your homework, you can stand up, or actually bid up, with the professionals. Remember that dealers have to consider whether they have a customer that will buy the item from them immediately, whether they are going to have to put it into a store, and what kind of margin, or profit, that they need to make on anything that they need to buy, something that you do not have to consider at all.
Be very careful to try to avoid getting caught up in “auction mania.” Auctions can generate excitement, something the house capitalizes on. Some auction houses employ “spotters,” or people who help the auctioneer identify who is bidding. Part of the spotters’ job is to yell, jump up and down, and encourage customers to keep on bidding on hotly contested items. It can be hard to resist bidding up on an auction without spotters when you really want what you are bidding on, let alone when everyone there are several people screaming about the thing-a-ma-bob of your dreams. This is why you write everything down in advance, so you do not let your excitement overcome your good sense.
Auctioneers, like all of us, tend to look for people that they see regularly, so if your bidding card is up in the air and no one is pointing at you, it is perfectly acceptable to start yelling yourself to get attention. While it might seem somewhat embarrassing, the house actually appreciates this because they want to get every last dollar out of their customers that they can. And, since you are potentially adding to the coffers, the auctioneer is more likely to notice you in the future.
You should be aware that there are two other methods of bidding. Houses will accept absentee bids from bidders who either can not get there at the time of the auction, or do not want to wait for the items that they want to come up to bid. The auctioneer starts the bidding in the normal process until the bidding becomes “close” to the absentee bidder’s maximum. An employee acts as a proxy for the absentee person and bids as if he or she were the real bidder. If the absentee bidder does not have the high bid, the bidding continues until the auction is closed. Some auction houses also accept bidders over the phone. In this scenario, an employee calls the bidder when the item he or she is interested in comes up on the block and describes what the action on the floor is to the bidder, who participates through the employee as if he or she were actually there. In both cases, the auctioneer is aware that there are absentee and/or phone bids and adjusts the bidding to accommodate these types of bids.
Now you are ready to tackle your first auction. Try several different houses to see the different kinds of merchandise in which they specialize. “Auction mania” is fun to watch, particularly if you are not involved in it. Actually, it is fun to participate in it, too. Good luck and happy hunting!