The benefits of selling by auction are many. Of course, converting property, possessions or inventory to cash is one of the major ones. But, people don't want to sell unless they get fair market value and that's where the auction comes in. An auction outperforms any other marketing method for whatever people have to sell. The competition created among the buyers stimulates prices and establishes current market value. And finally, the auction method is flexible. The customer decides when to sell and what to sell. Anything in real or personal property can be sold.
Well-trained auctioneers use established and successful procedures to ensure maximum benefits from an auction.
Step 1
First, the auctioneer meets with the potential seller to see what is to be auctioned and understands the seller's expectations. The auctioneer's services and the seller's desires are discussed. This process includes determining what type of auction will be utilized.
Step 2
The auctioneer will then present a proposal which details the auction date, location, time of auction, cost of advertising, sales commission and other matters. When the terms of the proposal are agreed upon, a contract is initiated.
Step 3
At this point, different steps are taken for different types of auctions. Today, with more and more strict regulations, many background checks take place to assure that the auction will conform with the Uniform Commercial Code, any city, county or parish and state license requirements, to verify title to the property, and to notify creditors of the auction.
Step 4
Next, an advertising campaign is prepared to help assure good attendance. Newspaper ads, handbills, posters, direct mailing pieces and radio and TV advertising are commonly used. A well-planned advertising program is essential to the success of the auction.
Step 5
According to the sellers' wishes, auctioneers may take the responsibility of preparing the merchandise before the auction. Much cleaning, grouping, organizing and often repairing and painting take place so that the property will be more marketable on auction day.
Tom’s Auction Tips
Items you may need before you leave for the auction.
Suggestions:
Print and take a copy of the on-line catalog for the auction you want to attend.
Prepare a list of items of interest for anything you’re thinking about bidding on.
Take time to preview the items of interest to you. All Items Are Sold As-Is Where-Is.
Pen and paper, any research notes, comparable values of items of interest.
Identification, checkbook or cash, letter of guarantee from your bank if you are a first time buyer unknown to the auctioneer.
"Dealers" Please down load a copy of the Virginia tax exempt form Found on our web site ( PLEASE FILL IT OUT IN ADVANCE) be sure to include your VA. tax exempt number and present it to our clerk when registering, this will qualify you for a non-taxable status at the auction.
Dress comfortably. Remember, it might be hot/cold outside but the air conditioning/heat might be working overtime inside.
There is allways ample food and drink on hand at all of our auctions.
Save a seat before you look at the preview. If this is an onsite auction you will want to bring a folding chair.
When you arrive at the auction be sure to register, Ask what types of payment are accepted. If the auctioneer charges a buyer’s premium, inquire about hauling/delivery concerns or pick-up times before you bid.
Preview the items you bid on before you bid. “You are the expert !
Please pay attention! Make sure you know what item number is being bid on at all times.
Raise your hand or paddle to bid. Once you’ve been acknowledged, further bids on an item can be made by a nod of the head, etc..
If you have any questions ask the auctioneer or auction staff, we are here to help make your auction experience an enjoyable one.
Thank You! Tom
Auction Bidding Tips
Feel free to just get your feet wet - don't think you have to go to your first auction ready to bid. Attend an auction or two in your area to get a feel for how they are conducted. Watch and listen, then move on to bidding if that makes you comfortable. 
"Am I getting a bargain?" is a frequent question. Think of it this way - buyers get exactly what they want, at a cost of only one bid higher than someone else was willing to pay.
Many auctioneers spend some time addressing commonly asked questions and explain how the auction is going to work. Some even conduct pre-auction or practice sessions, or brief tutorials, about the auction process. If you are interested in going to your first auction, check with local auctioneers to see if they offer such a service.
Always remember at an auction to feel free to ask questions if you don't understand something. Auctioneers and their staff want people to continue to come to their auctions, so they will do all they can to encourage repeat business. Ask a question of a member of the auctioneer's team and they will find the answer for you.
When people arrive at an auction, everyone is encouraged to read the rules printed on or displayed on posters, brochures or handouts. Again, ask questions if you don't understand a policy. Inspect the merchandise you're interested in, as most is auctioned on an "as is", " where is" basis. This means it is not guaranteed. When you buy an item, you become responsible for it. And, keep in mind that you'll pay for the items you purchase before you leave the auction, even if you aren't taking everything with you that day.
During the auction, auctioneers stand where they can be easily seen and often use a public address system so the bidders can clearly hear them. An item is selected, described and then bidding is opened.
In order to bid at an auction, you need to make contact with the auctioneer or the ring person. Ring personnel assist the auctioneer in hearing and acknowledging all bids and assures the bids are accurate. A ring person takes bids from the audience and then passes those on to the auctioneer. To bid, hold up your bid card, your hand or shout "yes." The auctioneer or ring person will make eye contact with you, take your bid and immediately turn and seek another bid. You can remove yourself from the process at any time by shaking your head "no" or saying "no" if the auctioneer or ring person turns your way. Should an auctioneer or ring person misinterpret any of your signals, simply report the mistake right away.
As increasing bids are received, the auctioneer's "chant" becomes a series of prices, with filler words to make the chant rhythmic.
When the final bid has been accepted, the buyer will identify himself/herself and the clerk will record the bid. When the buyer is ready to leave, the cashier will receive payment and release the merchandise. Today's modern auctioneer tape record the entire auction to benefit both the buyer and seller.
Newspaper ads and direct mail campaigns provide information on most auctions. They list date, time, location and often list many of the items for sale.
How to Buy at Auctions
The steps to buying real estate at auction include familiarizing yourself with the process, knowing the terms of the auction, doing your homework on the asset(s) you wish to buy, setting a limit and sticking to it, making sure you have the financial and emotional resources to buy on a cash “as-is” basis, and having a disposition plan in mind before you buy.
Familiarize Yourself
Do not rush in to the auction process. Take time to attend some auctions. Ask around about which firms are reputable. Familiarize yourself with auction terminology. An excellent source of auction terminology is the National Auctioneers Association website at http://www.auctioneers.org/glossary.
Go to different auctions. Deal with auction firms that are open and transparent about their business, who can earn your trust.
Do they use deceptive terminology such as a published “Minimum Bid” which is a fraction of the seller’s true acceptable price?
Is it easy to find and contact the principals or senior management from their website?
Do they post their sale prices after each auction? If not, why not?
Know the Terms
The terms should be posted on the website or in the sale brochure of the auction. Read and familiarize yourself with the specific terms of the auction you are interested in. Read the sales agreement that should be posted before the auction. Be prepared to live with the terms before you ever bid. The terms, although seemingly strict, are necessary to ensure that everyone is bidding from a level playing field.
Do Your Homework
We always urge our bidders, and many times require them, to certify that they have inspected the property before they bid. This should seem obvious, but the fact is when you buy a property that you have not inspected, or checked, such things as access issues, zoning, or utility availability, among other variables, you will be stuck with these problems if you are the winning bidder. Make sure you are aware of these issues, and that the price you bid reflects your comfort level with the property in its “as is” condition.
Set a Limit
We always encourage our bidders to set a limit on what they would pay based upon their knowledge and comfort level with the property, and to stick with it. Yet, in the heat of bidding, when everyone else seems to be enthusiastically bidding the price up above your limit, its sometimes very tempting to go ahead and bid higher. What will you do in this situation? It will come up, so try to be aware of what you may do if the price goes higher than you planned.
Make Sure You Have the Resources
Remember that properties at auction are typically not selling subject to financing. You should therefore have sufficient cash resources or lines of credit necessary to close the sale within the required time period (usually 30 days). Beyond the financial resources,you should make sure you have the emotional resources to be able to put a substantial earnest money deposit at risk, knowing that if you cannot close, you may lose it.
Have an Exit Strategy
Before you buy, you should have a clear investment strategy.
Are you buying the asset for a long hold, or do you plan to sell it in the near term? Know the local rental/ lease market.
Is the market headed up or down? Have a clear sense of the how long it takes to market a property conventionally, and what sort of price is attainable in an ordinary, “non-auction” marketing scenario.
Keeping these factors in mind will make your auction purchase a sensible one.
