What is the seller’s role in planning for an auction and what responsibility, if any, does the seller have prior to, during and after the auction? As a professional auctioneer, I meet many different kinds of sellers. There are those that are very honest and up front about the condition of the assets to be sold and then, there are those that are not honest. There are sellers who deeply appreciate the work the auctioneer does prior to, during and after the auction and then there are those that feel the auctioneer didn’t do enough or very disappointed in the prices they received and want to sue the auctioneer for not getting higher prices.
Many sellers do not understand that it is not the auctioneer who sets the price for an item, but the market, viz., the bidders. When the last bidder stops bidding, market price has been established.
Not long ago, a piece of old furniture sold for several hundred dollars only to have it show up several weeks later at a prestigious high end auction house where the same piece of furniture that was bought for a couple hundred dollars a few weeks before, sold for thousands more. Whose fault was this? The auctioneer or the seller?
Or how about the old print painting that was bought for $4 at a flea market, only to discover later that a very valuable, historic document, worth hundreds of thousands of dollars, was found behind the picture after the picture was dismantled from the frame. While the flea market was not an auction, I have heard about similar situations at an auction.
As an auctioneer, we must wear many different hats and deal with different personalities. While some auction houses provide appraisal services for personal property, I would submit to you that most do not. So what should a seller do?
First of all, a seller must provide a full and honest description of the asset to be sold. When there a hundreds or more lots to be sold, the auctioneer will find it impossible to “appraise” each and every lot. Does the seller know factual information about the asset or only what his relatives or friends told him. In many cases, particularly in liquidating an estate, the heirs know very little about the asset(s). By the way, just because something is old doesn’t make it an antique.
I think it is a good idea for sellers to do a little research on their own prior to contacting an auctioneer, to get a good feel as to what they could expect at an auction. This can also help establish an opening bid for the item. Keep in mind, if an item looks like a bargain, it will attract more bidders. Setting an opening bid too or a reserve too high, can discourage bidding.
Some sellers want to be actively involved in the auction. Let the auctioneer and his/her staff do their job. If present, the seller should never interrupt the bidding. The seller should never try to micro-manage the auction process. Never bid on your own items unless it was announced prior to the starting of the auction. The seller should never lie to bidders or appear arrogant. If a bidder were to ask you a question and you don’t know the answer, just tell the bidder you don’t know.
After the auction, the seller should secure any items that did not sell. If the items were taken to the auction site, it is the seller’s responsibility to remove the items from the site as it’s not the auctioneer’s responsibility to store them. If the items are on the seller’s property, the seller should cooperate with the auctioneer and buyer in the orderly removal of the sold assets. Depend upon the asset that was purchased, this could take more than one day to be removed. Example: farm or heavy equipment.
While some auction companies pay the seller at the end of the auction, it takes time to get payments from absentee or internet bidders. Thirty (30) days or less is a reasonable time period for the seller to get paid. Along with getting paid, the auctioneer will provide the seller with a settlement statement that the seller should retain for his/her own records. This settlement statement shows the lot number, description of the item, and prices received for the item, less commissions.
The buyer also has a responsibility at an auction. In a future article, we will address the buyers role and responsibility at an auction. For further information on auctions, go to our website at http://www.cansellnow.com . Give us a call if you have questions at 252-2057-4822.