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

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!

 

Different Auctions for Different Purposes

What do you think of when someone says the word “auction”, or says that they are going to an auction? Do you immediately think of a bunch of upper-class people dressed to the nines, sitting on fancy chairs,  silently holding up a paddle to bid (or lightly touching their nose or giving an almost imperceptible nod of the head) while an auctioneer is dressed in a tuxedo with tails and the ringers in evening gowns and tuxes show off the items like Vanna White? Or do you envision of a bunch of county farmers chewing on strands of straw, standing around a barn yelling “Yep!” each time they want to bid on a bunch of old rusty stuff? Or perhaps you think of a bunch of items on a table with a piece of paper on them and people write down their bid and then keep walking around enjoying the fair, coming back on occasion to see if they’ve been outbid?

Postcard from the 1960's of an outdoor auction
Postcard from the 1960’s of an outdoor auction

Obviously, the word “auction” means different things to different people.

So, if you’ve looked at some of the past blogs, you’ll notice that we’ve referenced a couple different types of auctions. Hopefully, by the time you finish reading this blog, you’ll understand what each main type of auction is, and why that type of auction is chosen.  The easiest reason why there are so many different types of auctions? Different reasons may lead you to try a different type of auction. Different strokes for different folks.

Live Auction: A live auction is your traditional auction. Within this, you have a couple different variations.  There is the auction house / ballroom format, and the on-site or on-location auctions. These are open or transparent auctions in that people know what the other person is bidding and who is doing the bidding because you can see them. Let’s take a closer look at both of these.

Auction House: At an auction house or a ballroom auction, the auction is held in a large room. The auctioneer stands at the front of the room and items/lots are brought to the front by ringers to be auctioned off by the people in attendance. Each auction house has its own “flavor”.  Some favor a very quiet bid floor where people hold up their little paddles and nobody other than the auctioneer says anything (or much of anything).  Other auctioneers like a bit more life in their auctions and encourage people to move around and be vocal about their bids. This type of auction lends itself best to consignments and may have several different sellers. If you only have a couple choice items to sell, this may be the way to do it.

On-Site / On-Location: If when someone says “auction”, this is what most people envision. You drive out to the location, usually someone’s home, and the auctioneer conducts the auction, often moving around from one area to another to auction off items. Sometimes this is called an estate auction, as people are auctioning off a great many items from their estate to the highest bidder. To paraphrase Forest Gump: “An estate auction is like a box of chocolates; you never know what you’re going to find to bid on”.

On-Line Auction: This has become more popular as the internet has gained popularity. Perhaps you have items to sell and want to reach a larger audience than just your city and surrounding burgs.  Yes, now, you too can enjoy some of the benefits of an auction in the comfort of your own home. You don’t even have to change out of your jammies if you don’t want to. To take part in an online auction, you simply register as a bidder (including your credit card number to secure your bids), then scroll through the items for that auction. Then if you see something you really like, you type in the amount you want to bid, click a button, and Viola! You are now the high bidder on a basketful of great-grandma Johanna’s handmade aprons and embroidered dishtowels! Or not. You might have already been outbid by someone who placed a higher maximum bid. But more on THAT in a latter blog.

Vintage Aprons

Sealed Bid Auction: This is usually when something of greater value (selling a home perhaps) or a contracting a service (like the city is looking for sealed bids on the construction of the new pavilion in the city center) is being considered and when confidential bids are preferred. People put down their bid (and sometimes terms) in an envelope, seal it, and deliver it to a certain place by a specific time. The party involved in the selling/purchasing will then look at the bids and make their decision.

Silent Auction: This is a very quiet auction.  No talking aloud.  Ok. Not really.  But it is quiet in the sense that there is none of the traditional auctioneer banter and no one calling outbids. Often people donate items for a silent auction in the hopes of raising money for some charity or event. In front of each item is a piece of paper. Often the paper states the approximate value of the item. People then write down their name and the amount of their bid. Then the next person sees it, decides they want it, and records their name and a higher bid amount. The silent auction has a set ending time when people can come to see if they managed to win the gift certificate for a pedicure, pay for their pedicure voucher, and take it home.

Auction Podium

Now, obviously, there are a few more specific auction types within these auctions mentioned above.  There is the absolute auction, the reserve auction, and the minimum bid auction, just to name a few. But I won’t confuse you with those now.  I’ll save that for another time.

Happy Auctioning!