Frequent Auctionology Questions Answered for You
SELLING AT AUCTION
Why sell at auction?
Because no other method is better for selling your goods. An auction company exists to provide you a service. Whether selling a single item or an estate full of personal property, an auction generates awareness and exposes your merchandise to competitive bidding–not just locally, but from across the country, even around the world.
That’s right… With the Internet and sites such as AuctionZIP.com, auctions have the power to generate buyers from anywhere. The more rare, the more valuable, and the more desirable an item, the more reason it should be sold at auction. Why take one or two offers for your fine collectibles, art, jewelry, or antiques when an auction can expose your treasures to hundreds–even thousands–of hungry buyers? Likewise, why accept only one or two offers for your house full of modern furniture and every day merchandise?
Whether it’s a dining room suite, a piece of pottery found in a cupboard, or a boxlot of linens, everything that is sold makes money for you. So reap the benefits of auction and expose your merchandise to competitive bidding.
How do I sell my goods (consign) through an auction?
An auction company is there to provide a service to you. Therefore, its agents will take your items to auction, sell them for you, take their commission, and remit your share in a timely manner.
What should I expect from an auction company when selling my goods?
An auction company should work for you, not against you. When consigning your goods to an auction company, there are certain things you should expect from its agents:
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You should expect to be treated courteously and not bullied into doing business.
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You should expect all your questions to be answered directly and not artfully dodged.
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You should expect the auctioneers to be knowledgeable and honest.
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You should expect to enter into a written contract with the auctioneers in which are listed the items consigned to be sold at auction as well as a clear explanation of all terms, commissions, and fees regarding the sale of your items.
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You should expect an auction company to treat you and your goods with respect.
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You should expect an auction company and its agents to conduct themselves and their auctions in an organized and professional manner.
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You should expect to feel comfortable doing business with an auction company and trust that it and all its agent will work for you to achieve the highest possible prices for your merchandise.
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You should expect to be paid your share within 30 days of your items being sold.
If the auction company with which you are considering doing business does not meet all the aforementioned criteria, then you should look elsewhere. You should never feel pressure, apprehension, or confusion when entering into a contract with an auction company.
How much commission should I expect to pay?
This varies between auction companies. Some sell for a flat percentage of the total sales. Others sell on a sliding percentage scale, either per item or on the gross. Still others might charge a set-up fee, a per item fee, or a pick-up fee in addition to a pecentage of the sales. None of the aforementioned are wrong or unethical, and usually, nothing is written in stone.
Many auction companies may be willing to discuss commission rates and fees according to the quality and value of the merchandise you are looking to sell. But don’t be fooled! Paying a lower or commission or smaller fees does not guarantee that you will have more money in your pocket when all is said and done. An auction company’s reputation and ability to market goods means more than percentages.
Will my items be sold for the highest bid no matter what it is?
Yes and no. Most auctions are conducted “with reserve,” which means the auctioneer has a right to reject a bid (or all bids) when the current bid on an item is far lower than its average selling price. This may apply to fine antiques or high quality goods when interest is low at a particular auction. Other times, when appropriate, items may have a minimum starting bid or a specific reserve, an amount needed to be achieved before an item can be sold.
However, when it comes to every-day, general merchandise, it pretty much has to fly. Goods that are abundant in the market and of minimal value should be sold to the highest bidder, regardless of the price.
Some auctions are “absolute,” which means that the auctioneer must sell an item if a bid is given, no matter what it is. An auction is only absolute if it is advertised as such. We, the Savo Auctioneers, do not conduct absolute auctions.
BUYING AT AUCTION
Why buy at auction?
When we meet people who have never attended an auction, we invite them to join us at our next scheduled sale and tell them, “You’ll either love it or hate it.” That’s the truth. There is no in-between. Some people love the excitement, the crowds, the hunt, and the competition. Others hate auctions for those exact same aspects.
If you’re a collector of the rare, the fine, the unique, or the exquisite, then chances are you’ve had to participate in auctions. For, whether simple or great, most of the world’s treasures are sold through auction for the reasons given under the first FAQ.
However, if you’re someone just looking for useable furniture and household items, auctions are for you, too. When it comes to modern wares, whether they are sofas, dinettes, or appliances, buying them at auction only makes since. Contemporary items always bring far less than their retail prices. So there are deals to be found at auctions.
Auctions are for dealers as well. If you’re a buyer and reseller of items–antique through modern–then what better way to help build your inventory than by auction? Hundreds of items have been gathered for you, eliminating your need to lug the goods from the estates.
Indeed, auctions are accessible and useful for everyone from every walk of life. If you’ve never been to one, give it a try.
Who can attend an auction?
The auctions conducted by us, the Savo Auctioneers, are open to the general public. When registering with us for the first time, be prepared to show a valid photo ID. If you are tax exempt, you should have a copy of your tax license, and if you are a firearms dealer attending to purchase guns, you should have a signed copy of your Federal Firearms License (FFL).
Most auctions are open to the public. However, if you’re unsure, you should call the company conducting the sale you plan on attending.
How do I bid at auction?
Before attending and bidding at an auction, you should make an effort to inspect the goods being offered. Most auction companies provide their audience with a preview time before the auction starts. This is important! You should not bid on an item unless you are sure of its quality, condition, and validity. For most of the time, items sold at auction are as-is with no guarantees.
When you register to buy at an auction, you are provided with a card or paddle that has your buyer number on it. That number is used to keep track of the items that you win. When you want to bid on an item, the best thing to do is to raise your card into the air. This is a clear indication to the auctioneer or attending floor personel (ringmen) that you are bidding. Scratching your nose, pulling your ear, or wiggling your toes are not signs of bid advancement, but of a nervous tick.
While at an auction, will I be able to understand the auctioneer?
Some people are both fascinated and intimidated by an auctioneer’s chant, the rapid, sing-song syle of calling bids. A good auctioneer has a chant that is exciting and clearly understood. If you are unclear as to what the next bid is, don’t be shy to ask the auctioneer or nearby ringmen to clarify.
How do I pay for and remove items I buy at auction?
Forms of accepted payment vary among auction companies. Cash is always good. Most auction companies accept major credit cards. Some no longer take checks or money orders for obvious reasons.
Before attending an auction, make sure you know the types of payments that are accepted. Most of the time, full payment is due at the end of the sale. Keep in mind, there is usually state sales tax added to your bill, and many auction companies now charge a buyers’ premium.
At most auctions, removal of items is the sole responsibility of the buyer.
What is a buyers’ premium?
A buyers’ premium is a percentage of the bid amount that is added on to the final selling price. Buyers’ premiums range from as little as 10% to as much as 25%. For example: An item that has a final selling price of $100 and a 10% buyers’ premium would be charged as $110 to the buyer.
In essence, a buyers’ premium is simply a finder’s/convenience fee paid to the auction company for finding, transporting, and offering merchandise.
APPRAISALS
What is an appraisal?
An appraisal is an educated monetary evaluation of an item or items by a professional who has experience selling, handling, and/or brokering the items that are being examined. There are two types of appraisals: Fair Market and Replacement.
A fair market appraisal places a value on an item that is to be offered at public auction, the value being determined by the condition of the item, the strength of the market, and the desire for the item by a willing buyer who has reasonable knowledge regarding the current market. A replacement value is derived by calculating the cost of replacing an item should it be lost, stolen, or damaged.
When do I need an appraisal?
You could need an appraisal for the IRS if you inherit an estate or receive a gift, if you are donating an item to charity, if you or your business is filing for bankruptcy, if you looking to insure your valuables, if you are going through a divorce, or if you have lost or damaged goods due to a natural catastrophe or some other casualty occurrence.
What should I expect from an appraiser?
Someone who is going to appraise your goods should be well qualified and experienced. Many appraisers have taken educational courses and are certified in conducting valuations. (John C Savo, Senior Auctioneer and Appraiser for the Savo Auctioneers, is accredited by the Certified Appraisers Guild of America.) Equally important to certification is experience. An appraiser should have experience buying and selling goods in the current market, so as to better place a realistic value on the items being examined.
CAUTION: Do not let someone who is interested in buying your goods conduct an appraisal for you. An appraiser should only be interested in selling the items for you through a consignment agreement. An appraiser should never be interested in purchasing the items from you.
How much should I expect to pay for an appraisal?
Rates vary between appraisers. Some charge by the hour, some charge per item appraised, and some charge a flat fee.
CAUTION: The cost of an appraisal should never be a percentage of the total value of the items appraised.
