Auctions are not only exciting, but they are also one of the most visible ways to demonstrate “market value” – a value determined by a willing buyer and a willing seller, each having full knowledge of the transaction. In other words” I’m willing to buy if you’re willing to sell. Let’s make a deal.
The mechanics are simple. An auctioneer offers an item and asks for bids. “Will you bid $5?” If you raise your hand, that bid is yours — but only until someone else offers more. Each new bid bumps the last one out. The highest bid standing when the auctioneer says ‘SOLD’ wins the item. Make sure that’s you if you really want to win.
A quick Colorado note: by law, all auctions here are ‘with reserve’ — the seller sets a minimum and can walk away if bids fall short. The exception is an ‘absolute’ auction, where the highest bid wins no matter the price. But it only counts as absolute if it’s clearly declared that way (true in every state except Louisiana). If you don’t see the word ‘absolute’, assume the item has a reserve.
So, if you’d like to be a winning bidder and bid like a pro, pay attention to these 4 principles:
1. Know what you’re bidding on. Study the descriptions, look at the photos, and make sure you’re willing to buy the item as is. In some cases, you might even have the opportunity to inspect the item in person. In most cases, once you buy it, it’s yours. There are no refunds or exchanges.
2. Do a little “Google Detective” work. In most cases, a little research will give you an idea of what the item should be worth in the general marketplace. Of course, it’s worth what you’re willing to pay. How badly do you want it? Are there others available?
3. Know your limit, and STICK TO IT. People don’t buy things at auction, they WIN things. It’s a competition. It’s easy to get caught in the “I’ll bid just one more” trap. And then you bid again and again and again.
4. Use the “Maximum Bid” option if you’re bidding online. Placing a max bid tells the system to bid on your behalf, at the next bid, only if someone bids against you. In that case, the system will continue to bid for you until you reach your maximum. Then it stops. With discipline, this is a good way to “set it and forget it”. The systems are designed not to bid for you if no one else is bidding.
Auctions are a fun, fair, and transparent way to buy and sell things. Questions? Give us a call.
The Schur Success Group is a Monument-based, award-winning Real Estate, Appraisal, and Auction Company, celebrating more than 42 years of business in Colorado.
(719) 667-1000
