Auctions are generally fast and furious places where there is little time to examine the goods fully, items may be difficult to get at and see and others may not even be on view at all. Similarly, auctions are full of traders, many of whom are very experienced in the business of assessing the quality of goods quickly and accurately. With practice you should be able to do this in a very short time and after a few visits to auctions you will pick up what is happening very quickly. However, there are a few basics which you should learn at the outset.
Auctions can be full of junk! There are always truly ‘duff’ lots and it is important not to get tempted by a so called ‘bargain’ that is of no use to you or of no resale value just because it was ridiculously cheap.
For every 100 items offered for sale at an auction there may be only a handful that are worth your while thinking about buying. Your goal must be to become so knowledgeable about the pros and cons of second-hand goods that you are able to judge which are worth closer inspection, and worth bidding for and which must be totally ignored and not worth wasting any further time over. Sometimes there may not be much to choose from. At such situations, you must organise your time efficiently.
Do be prepared to admit that there may be nothing at that particular auction worth giving a second thought to and walk away. Although this is extremely unlikely to happen, particularly at the bigger auctions, you must not approach an auction with the belief that it is simply jam-packed full of bargains. This is not so. Most auctions will be but there are a few which are not. Don’t whatever you do go to one with a fistful of money and expect to take away a lorry-load of gear at the end of the day. You might be fooling yourself into bidding for many things which you don’t want to deal with, don’t need, and you may even end up paying more than they are actually worth.
The most important thing to realise is that there are good auctions and there are bad ones. The vast majority of them are good, in most places they are very good but there are a few that are absolutely awful.
Make sure that you check on arrival the auctioneer’s conditions of sale.
The auction house is legally obliged to display this information on their premises. Normally it can be found in the sales office and you should be able pick up a copy from the desk. Usually the conditions of sale are also stated prominently in the catalogue. It may seem a bit strange to take the time to read them – every time – but it is absolutely necessary.
Your instincts are key; you have to trust them.
Every time you look at a lot of goods you must ask yourself if they look and feel right. Then check the conditions of sale to see what the auction house guarantees. For example, if you buy an item and it turns out to be faulty, will you get your money back?
Normally you won’t, but you want to be aware of this. Usually at such auctions goods are sold “as seen”, with all their faults and problems and this will be stated in the auctioneer’s terms and conditions. Similarly, people have bought goods at auction that have turned out to be stolen and have lost quite substantial amounts of money. While this is truer at car auctions and antique auctions than it is at liquidated stock auctions, it is well worth being aware that auctioneers only act as agents and are not legally responsible for the title of goods which pass through their hands.
All auctions sell goods “in good faith” and it is your responsibility to confirm the authenticity of any particular article. This may sound unfair and to be quite honest it is. The auction house gets well paid for its services. Most people would agree that auctioneers should look into the history of the goods that they deal with. Some do but most don’t. They are not obliged to. However, that is the way the system operates so be aware of it, tread carefully and suspiciously.
At the Auction
At any auction there are generally two areas.
The first is known as the viewing area (where the goods can be viewed) and the other is the bidding hall, where you will find the auctioneer and where bidding and buying takes place. At most smaller auction houses, both the viewing area and the bidding hall are the same place with bidding entered into in a cleared area amongst the goods. Usually an item will have a lot number on it and this indicates when it is due to be offered for sale.
If there are only a couple of items you are interested in you can often judge when they are likely to get around to corning under the hammer by studying the list in the catalogue and watching how fast items are selling, thus avoiding having to hang around all day. Items usually have stickers on them giving some information as to the history and condition as well as their lot number. The amount of information displayed and the reliability of that information depends entirely on the auction house. It is worth noting that the more information that is provided the more credible the auction is likely to be.
Sometimes you can pick up further information from the catalogue or a sheet of photocopied paper available at the door or, as at most auctions, you are charged for a catalogue even if it is only a sheet of photocopied paper when you wish to gain entry.
Items Sold ‘As Seen’ and ‘With Warranty’
At auctions items fall into two distinct groupings.
There are those that are sold ‘as seen’ and those that are sold with some form of ‘warranty’.
As seen means you buy an item with any faults and problems and you have no recourse whatsoever if it breaks down, doesn’t work or falls to bits once you get it outside the room. Be very careful in buying an item as seen at an auction, particularly a mechanical or electronic one. Having said that though, many auctions will not warrant very much or give any warranty whatsoever for items over a certain age.
In this case you will need to know whether the goods you are buying have any serious problems or not. Except where you are at an on-site auction, it is very rare to have the opportunity to plug in the item, switch it on or try it out. It is a real gamble to buy ‘as seen’ and the odds are stacked against you, but the price of the article when sold will bear this in mind.
Do remember, however, that you are not the only one in this position, dealer and the public alike are all in the same boat. If you buy three photocopiers ‘as seen’ for £25 each and only one of them works, then you still got a bargain. In addition, the other two may come in use for spare parts and may even have scrap value. Buying an item with warranty means that you normally have a period of time ‘after sale’ to inspect the item thoroughly and ensure that it works to your satisfaction. If it does not work, you can get your money back.
Check what ‘after sale’ means, as it could mean after the fall of the hammer, after the auction ends or after you have paid your money and bought the item, it varies from place to place. Buying an item with warranty is almost as good as buying it privately and you probably have paid much less for it. It you find a fault then you can take it back and have your money refunded. However, fewer auctions these days offer goods with warranty.
No-Reserve Auctions (unreserved)
Items go into auctions at two levels, those which have a reserve price and those that don’t. Basically, if an item has no reserve price then the highest bid buys it on the fall of the hammer, irrespective of whether it fetches a good price or a bad one. If an item has a reserve price then you will not be told what it is. It is a secret between the auctioneer and the vendor of the goods.
It is the price below which the seller is not prepared to let the item go and may be prepared to keep it or sell it privately. If bids go above the reserve price then the item will be sold to the highest bidder. If bids do not reach the reserve either one or two things can happen. Either the auctioneer stops trying to raise the bids, refuses to sell the item (where it may be offered at the next auction in a few weeks time) or he or she will sell it “provisionally”.
A provisional sale means that the highest bidder has an opportunity to negotiate, via the telephone in the auctioneer’s office with the seller to perhaps agree on a compromise price, somewhere between the highest bid and the reserve price. This often happens because people offer their items (particularly collectibles and antiques) at auction for too high a reserve price. In short they are greedy.
The seller obviously wants to get as much as possible for the good and people also often consider their goods to be worth more than others are actually prepared to pay for them.
No reserve auctions present the greatest opportunity for bargains as the auctioneers MUST sell the item regardless of how little he gets for it.
Learning the Ropes
Before attending an auction where you wish to purchase something, it is a good practice to go along to one or two auctions as a spectator with no intention whatsoever of buying. Here you can get to know the feel of the place, how an auction works, the kind of people who attend auctions, and learn to try to differentiate between the dealers and the general public. What you are trying to do is to attune yourself to the atmosphere of the place. Become aware of the auctioneer’s method of presentation, his slang and his speed.
Check some goods out. Try and value them yourself and see if they go for what you expect. This exercise is not pointless. Apart from being a great deal of fun, particularly if you go with friends and bet on who guesses to the nearest price, a dummy run can save you lots of money when you are first starting out.
When you view the goods, you may detect a slight fault, scuff mark, some slight shop soiling or bumps or cracks. That is to be expected with anything that has been used. It may be just slight which does not affect the fact that it is still a good item and might go for a good price. Take a notepad and pencil with you, write down the lot number of the item and jot down any defects that you must take into consideration when judging how much to bid.
You can often use the catalogue as your notepad, and many people who visit auctions regularly develop a short-hand style. It is important to have as much information easy to hand when the bidding starts as you do not want to get flustered and either miss an item when it comes up for sale or forget details about the problems with the items you want to bid for and bid too much.
There are several schools of thought about how people behave at an auction. Many people believe that feigned disinterest is the best policy at an auction because too much attention will push up the price someone else is prepared to pay. They are afraid that by taking an interest in an item it will make it look like a good buy in the eyes of others.
Others believe that the opposite is true. They say that the more attention you pay to an item prior to the sale, the more you will put off the competition who will think that you are going to buy the item whatever the price. They may give in and look elsewhere for similar models or at other goods. Also, you want to inspect the potential purchase as fully as possible.
Do not be afraid of intimidating people and look like you have made up your mind. These people will not know that you have carefully set a price above which you are not prepared to go. Make sure you do your inspection well in advance of the time the item is likely to come up for sale.
Always keep your eye out for this item though and make a mental note of others who are looking at it. You will then be able to pick them out in the crowd and know who you are bidding against.
It’s All a Game
Being at an auction is all one big game. If you want to win this game, you have to know and be able to be good, if not better, than the other players.
Prior to bidding, the auctioneer may subtly suggest to the dealers in the room what the reserve price is.
For example if the reserve price is say £200 he may very well say: “well ladies and gentlemen, where shall we start today, how about £200 – no, okay then let’s start at £150 – you tell me”.
If the auctioneer considers the reserve price too high he may deduct almost 50% of the price and suggest that as a starting bid. If too low he may say: “it’s here to be sold”. When the bidding is gone above the reserve, he may suggest this and say: “the goods are on the floor now folks” or: “I’ll take a chance and put it on sale”.
When the bidding commences change tack from your earlier strategy, try and keep a low profile, and not let any opponents see who they are bidding against. Otherwise, they may be able to psyche you out. Mingle with the crowd and don’t stand apart.
Don’t throw your hand in the air and shout like a maniac to attract the attention of the auctioneer. Attracting his attention through eye contact or by a nod of the head or by a slight wave of the hand or catalogue is a much better strategy.
The vast majority of auctioneers are very good at their job and they will know if you are bidding and keep looking at you for another bid. Once you have gained the auctioneer’s attention and he knows that you are interested in a particular item, you will be able to bid by making the slightest movement.
In a crowd of people this will be very difficult for other people to detect. If another bidder cannot see who he is bidding against, then he may believe that the auctioneer is accepting false bids in order to raise the price and mistakenly stop bidding. You might benefit from this by eliminating the competition.
Value the items and set the price that you are willing to pay well before bidding commences. Do not go above this price.
Don’t get carried away with the excitement of the game. You are bound to be nervous to start with, and in any situation everyone is prone to becoming a little illogical. Convince yourself that the item is not worth buying above a certain price and stick to your limit.
Try not to join the bidding until the last possible moment, if an item is still going at a reasonable price jump in towards the end and put the competition off their guard. Consider it as a game in which you are trying to outsmart your opponent. Wait until the auctioneer is in the process of offering the item for the last time, or raising his hammer before you jump in. This will cause all sorts of disruption.
However, make sure that the auctioneer can see you before you do this. The auctioneer will usually take only two or sometimes three bids at a time and may not look around for anyone else until there is only one person left or someone has dropped out so don’t feel as if you are being ignored.
An auctioneer will generally expect a private individual to pay more for an item than a trader who he is familiar with. An auctioneer can expect to be in control of the price and is therefore advisable to look as much like a trader as you possibly can. The trick is to act in a professional manner, appearing to know what you are doing, and be recognised when you visit time after time.
If your bid has been successful, then you may have to go to the roster immediately and pay the deposit of say, 25% of the purchase price. This percentage varies from auction to auction and sometimes can be a fixed amount, like for example £5 or £10. At another auctions, all payments are dealt with in full at the end of the sale. At some auctions, you may be allowed to return the next day and pay for the item in full without having to pay a deposit.
If deposits are required before you start bidding, make sure you have checked with the office as to the exact money they will require and that you have the cash on you. Auctions do not take kindly to someone who wins the bid and then hasn’t got the deposit. You are wasting their time and if done repeatedly they may ban you from the auction house.
Most reputable auctions run accounts for regular customers. This method of payment will save you an awful lot of time, trouble, worry and hassle. The sooner you open an account with an auction house the better. The requirements for opening accounts vary from place to place. Some auctions ask that you have been in operation for a year and that you are VAT registered. If you are thinking about going into business, you are therefore advised to set up your business as professionally and as soon as possible.
Auction houses now fall under the new anti-money laundering laws – Basically, they have a duty under threat of prosecution to know where your cash has come from – they are duty bound to report anything suspicious and will not accept large payments in cash.
You are normally expected to pay for any item by the end of the next working day after winning a bid; otherwise you could become liable to pay a storage fee. Make sure that before you bid you have the money ready to pay for it – or that you can get it out of a bank quickly. Some building society accounts have a limit on how much a customer can withdraw in cash in any given period of time. If you are buying at the cheaper end of the market you are not going to worry unduly about carrying a few hundred pounds. However, when you get into the larger price range to carry thousands of pounds it would not be sensible to carry around that kind of money with you.
You can pay by cheque but you may have to wait until the cheque clears before you can collect your purchases (above any cheque card limit). In the meantime, you may incur storage charges. Plus, when you have bought an item, it becomes your responsibility immediately and the auction house will usually wash their hands of it. If an item suffers from vandalism while in their possession, it is you who have to pay for any damages.
You can usually pay for items at auction by Bank Draft or Building Society Draft. However, you should check with the auction house first. Upon receipt of the draft, you will be able to take away the items. In the past this method was accepted as being perfectly secure but more and more bank drafts are being stolen or forged. For this reason, the auction house may ask you to wait while they phone the branch to ask for verification.