Pulling an Item Before or During the Auction: The Why’s and Wherefore’s

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Pulling an Item Before or During the Auction: The Why’s and Wherefore’s

In my last blog, we talked about whether or not someone could purchase something from an auction before the auction begins.  We decided the correct answer was no.

In this blog, we’re going to investigate whether or not an auctioneer can pull an item from an auction. The short answer is yes. The longer answer gets a big more complicated.

First, we need to clarify that we are talking about completely pulling an item from the auction (and not selling it to anyone) rather than selling an advertised item before the auction. When we talk about pulling an item, it means the auctioneer makes a very conscious decision to not sell a particular item, whether it was itemized or not. Notice the key words: NOT SELL.

But why, and when, would this happen? Let’s look.

Acacia (age 13) with her Farmall Cub

The first reason an item might be pulled from the auction (or not sold) is that it did not meet the minimum reserve price. Most items at an auction will be sold for whatever it can bring, even if it is just a couple dollars. However, some items might have a minimum reserve price, which is an undisclosed price that the seller has communicated with the auctioneer before the auction. The item is identified to the crowd as having a reserve price. If this minimum price has not been reached, the item will not be sold.  For example, say Acacia was going to sell her Farmall Cub tractor. She’s not going to, but imagine she decided to. She works it out with the auctioneer that she wants a minimum of $2500 for the tractor. The day of the auction arrives. People getting ready to bid on the Cub know there is a reserve price, but after a couple minutes of bidding, the high bid is only $1250. At this point, the auctioneer would state that the Cub didn’t reach it’s reserve price and it would be set aside.

Another reason that an item might be pulled or not sold at an auction is because it is in an auction with reserve. This simply means that the seller has reserved specific outlined and contracted rights, one of which is the right to not sell an item. The biggest catch is that seller (or the auctioneer acting on the part of his client) must pull the item before the auctioneer brings down the hammer. Once the hammer comes down, the item is sold and cannot be pulled from the auction. While this might make a buyer upset (especially if they are bidding on it), and while it might make the auctioneer look, well, not so good, it does offer the seller some protection from a way too low of a bid.

Going along with this, some auction houses will reserve the right to withdraw an item if it only receives nominal bids (bids by people who think they can buy something for $5 when it’s worth $100) or when an item doesn’t receive bids that reflect what the item is actually worth. This is something that is more common in larger auction houses, or when the seller and auctioneer put it in their contract.  This is also usually stated somewhere on the auction house’s Terms & Conditions for all to see.

A fourth reason an item might be pulled, or withdrawn, from an auction is because the item is defective.  Perhaps an item was listed for sale, like perhaps an oak infant crib. A day before the auction, the seller or the auction house is made aware of a recall on the crib due to a defect in which the side rail would not stay up and children’s arms and legs were getting hurt. The auction house will pull this item as it could not in good faith sell a defective item to another individual. Similarly, if it is noticed that there is a defect that was not otherwise noted and cataloged, the auctioneer may choose to withdraw the item, or set it aside without penalty. Again, this provision is usually noted in the auction houses Terms and Conditions.

A fifth reason an item might be withdrawn could happen if the auctioneer suspects that there is something fishy going on that is influencing the sale of the item. This could be collusion between buyers or someone purposefully bidding the item up to get a higher sale price. Both of these scenarios are unsavory, distasteful, and unacceptable by those who love to attend auctions to get a good deal or purchase a treasure.

Well, there you have it. Five (5) big reasons that something you thought was going to be sold, didn’t get sold. Happy Auctioning!

 

2 thoughts on “Pulling an Item Before or During the Auction: The Why’s and Wherefore’s

  1. I was the opening bid required $300 on a silent auction for a pistol listed to be valued at $850.00. Now the item has been pulled, because mgmt felt like it sent a conflicting message regarding the rehab center’s mission / purpose.
    Would you consider that legal?

  2. Mark, while this is certainly disappointing, I sincerely doubt it is illegal for them to pull the weapon. The following is why I think it is uncustomary and unethical from a certain point of view, but not illegal.
    #1 This was an “auction” for charity. Charity auctions in the state of Wisconsin are not subject to standard auctioneer rules. In fact, they have almost no regulations regarding auctions or silent auctions. I am not familiar with all states, but in the upper midwest, this seems to universal….anything goes at charity events and no formal rules apply.
    #2 This event was probably not held under a working auctioneer’s license. Now, while rule number one trumps this point, I would presume that this is true in your situation that the charity wasn’t operating under a licensed auctioneer….which is legal in the upper midwest.
    #3 If the item had a set end time for the silent auction and they pulled the item before the scheduled end time, it would be legal even under licensing. If the organization had a “reserve”, non-stated or stated, it is legal for them to not complete the sale, even if under licensing. Keep in mind, as an auctioneer and as a bidder, I hate to see situations like these happen. I try to never let these situations happen, but sometimes, the power is with the seller. Another point is that while these are legal, they may not be ethical or customary.
    Here is an example of something legal but from most people’s perspective, not ethical–A young mother of 3 loses her husband in a car accident. She has credit card bills and a mortgage which she get behind on because of a life insurance delay. Her bank decides to go into foreclosure the first day possible under law. This is legal, but I believe that most people would think that this is not ethical or customary.
    #4 On a contrary point, if this was offered at a charity event, my suggestion is to let it go. With charity events, I would assume that you were at the event to help the cause or may even be some part of the cause. If that is the case, even if there are other members that have opposing views on firearms, take it up with the board if you feel very strongly about the situation.
    If you were just there for a deal and didn’t have much interest in the organization and were just there because you saw an advertisement, there probably isn’t much that can be done. It is very likely that the organization acted within the law.
    Thanks for the comment and I hope this perspective is helpful,
    Scott Hueckman

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