I want to go to an auction. What should I know before I bid?
Understand the type of auction you are participating in (absolute, reserve, etc.) and make sure to review the complete terms and conditions of the sale. You will want to arrive early to register for the auction. Certain auctions (i.e. real estate) may require a cashier’s check or other payment in advance of the auction to qualify you to bid in the auction. If you are attending an auction with a live element, you will want to bid in sync with the chant. You should be listening closely and following the increasing bids. Remember: The number the auctioneer is repeating is where the bid is and what the auctioneer is now accepting.
I want to hire an NAA auction professional. Where do I start my search and what should I know?
If you are considering an auction for your personal or business assets, consider the following tips: Whether it be real estate, art or automobiles, select an NAA Auction Professional with expertise in your particular type of sale. NAA Auction Professionals are at the top of their field in the auction business. Members are professionals well versed in the psychology of selling. Their education, commitment to the NAA Code of Ethics, expertise and networking capabilities stimulate competition among bidders, securing you the highest prices for your assets. CLICK HERE to Find An Auction Professional! Ask for references, attend one of their auctions and learn about auctions firsthand. Take an active role in the marketing and advertising of your assets. Make sure to fully review all contracts, terms and conditions of the auction with a legal expert.
What should I do if I have an issue with an auctioneer or auction company?
As a voluntary professional organization that does not have jurisdiction in licensing or regulation, the NAA can only field ethical complaints about our members and does not offer legal recourse, including the recovery of financial or physical assets. If you believe that an NAA member has violated the NAA Code of Ethics , you may file a complaint in writing using this form and submit it to NAA Chief Executive Officer Aaron Ensminger, at email@example.com. You can search our member database here. If your grievance is accepted, a copy will be sent to the accused individual so they may provide their version of the facts. The NAA's Grievance Committee will review both documents and render a decision. You will be notified of their decision within 90 days of when the NAA receives your original complaint. For legal and financial recourse, you will need to file a complaint within the state where the auction company is located and/or where the auction was held. For states that require an auction license, the licensing board is the first place to start. For all states, we recommend contacting the consumer protection division of the attorney general’s office as well as local city, county and Better Business Bureau offices.
How do I become an auction professional?
- Find out about license requirements. While some states require a license to be an auctioneer, others do not. Likewise, some specific types of auctions may require a special license. Find out what is required in your city, county and/or state to make sure you are abiding by all laws. - Get educated. Before becoming an auctioneer, you should seriously consider attending auction school. These schools provide aspiring auctioneers with the training and education needed to learn the art of bid calling, marketing, operating an auction business and more. While the NAA does not endorse or recommend any specific school, you can find a list of known auction school providers here. Is Auctioneering Really a Full Time Job? How to Become an Auctioneer
Can I attend an auction and participate and spectator without bidding?
We encourage people to explore auctions by attending one as a spectator. There is no better way to learn about auctions than to watch one firsthand.
Who's the person yelling in the audience at an auction?
The person you see and hear working amongst the crowd of bidders is known as a ringman. This individual is part of the auction team and is an extension of the auctioneer. The job of the ringman is to convey bids back to the auctioneer from the crowd. When bids are received in the crowd, the ringman will yelp to signal the auctioneer that they have received a bid and to increase the bid amount. These individuals are also there to help answer questions you may have while the auction is being conducted.
What is the auctioneer saying?
The art of perfecting the auctioneer’s cry take years of practice, but understanding what auctioneers are saying is simple. The auctioneer’s bid call can be broken into two parts: - Statement (The Current Bid) – I have five dollars. - Question (The Next Bid) – Would you bid 10? Example: I have 5 dollars, would you bid 10, would you bid 10? Now 10, I have 10 dollars, would you bid 15... The cadence and repetition of words and use of “filler words” vary from one auctioneer to another, but the format is usually the same. Always remember that the number the auctioneer keeps repeating is the dollar amount they are wanting.
If I scratch my nose or wave at a friend, will the auctioneer think I'm bidding?
We hear this misconception a lot! In fact, to bid at an auction or for your bid to be received by the auctioneer, you typically need a bid paddle or bid card. You will receive this bid paddle or card at registration and it will have a number on it. This number allows the auction company to know who is bidding from the list of registered bidders. If you mistakenly bid or the auctioneer misinterprets your movement as a bid, immediately notify either the auctioneer or their staff.
Am I required to have cash on hand at the auction?
It is important that prospective bidders read all documents regarding the sale prior to auction day. Cash payment is commonly not required at auctions. Auction companies may accept multiple forms of payment: cash, check or credit card. When attending real estate auctions, auction companies may at times require a specific down payment on-site in the form of a cashiers check to qualify as a bidder.
Are auctions only for distressed or discounted property?
This is a major misconception about auctions. The fact is auctions are the primary sales method when selling valuable assets such as vintage vehicles, multi-million dollar homes and priceless pieces of art. The competitive bidding of an auction and the bidding of prospective bidders sets the price and market value of an asset. The item will not sell for more than the highest bid and will not sell for less than the high bid. You, the consumer, and other bidders determine the market value of an item when you buy at auction. A Buyer's Guide to Real Estate Auctions
What are the differences between an absolute and reserve auction?
There are two different type of auctions: those with reserve and those without reserve (sometimes referred to as absolute). NAA Auction Professionals should consult with their seller(s) to determine the best method suited to the seller. - Absolute Auction: An "absolute auction" is an auction where the property is sold to the highest bidder. There is not a minimum or reserve price that must be met to complete the auction sale. - Reserve Auction: A “reserve” auction means that a price has been set between the seller and the auctioneer that must be met to complete the sale. Reserves are often used to provide the seller with security that they receive at certain amount of money to meet their sale goal. Should I Sell My Home by Reserve or Absolute Auction?
What is a Buyer's Premium?
A buyer’s premium is commonly used in auctions today as a form of payment for the auction company conducting the auction. The buyer’s premium is an advertised percentage of the high bid or flat fee added on to the high bid to determine the total contract price to be paid by the buyer.
What does "As Is, Where Is" mean?
One of the most common statements made at auction, “as is, where is,” simply means the property is being sold without warranty and that there are no contingencies based on the status of the asset being sold. It is important that you inspect all auction properties before you bid, both real estate and personal property. Photos may not show all the details or potential faults with the asset and it is your job as a well informed bidder to thoroughly inspect and know what you are bidding on BEFORE the start of the auction. Once you bid and buy an asset at auction, you are the new owner.
Can I inspect the property I'm interested in bidding on before the auction?
We encourage you to view the property before auction day. Due diligence on the part of the bidder is important with auctions. Contact the auction company managing the auction and inquire about times when open houses will take place, as well as any paperwork available on the property. Auctioneers want you to feel comfortable on auction day. Always feel free to call and ask questions.
What is a minimum bid?
Minimum bids are routinely used at auctions to provide prospective buyers with an initial price range of where bidding will begin. If an auction has a “minimum bid” of $50,000, prospective bidders will know that the auction will start with an opening bid of $50,000 and that the asset will not sell for anything less than $50,000. Often times, auctions are advertised with an “opening bid”, but this should not be confused with a “minimum bid”. An “opening bid” simply means a price where the bidding opens.