How to Hire an Auctioneer: Five Questions to Ask
Have you ever wondered what questions to ask when hiring an auctioneer? Maybe you are looking to sell your home, a collection of antiques, or surplus items from your business. The possibilities with auctions are literally endless.
We’ve already discussed how to prepare for your search; but, what questions do you ask an auctioneer once you’re ready? Here are five broad questions to ask when you have an auctioneer on the phone or meet for an appointment.
Is the auctioneer a member of the National Auctioneers Association?
To ensure a quality and consistent experience, ask your potential auctioneer if they are a National Auctioneer Association or NAA member. NAA Auction Professionals have the education and ethics to help you sell anything. And, NAA members are part of the largest global network of auctioneers. They bring the collective knowledge and experience of around 3,000 members to bear on your project. Additionally, auctioneers might be members of state auctioneer associations and/or groups related to different asset classes.
Do they follow a code of auction ethics or practices?
Members of the National Auctioneers Association voluntarily agree to follow the NAA Code of Ethics and Standards of Practice. Ask them what that means for you as a seller and for bidders and buyers. A code of ethics and standards of practice help ensure the auctioneer treats you fairly. It also assures that all fees and expenses are discussed upfront and recorded in an auction contract.
What is their education and experience in selling at auctions? What is their experience with your particular asset?
While each property, collection, and item is unique, there are fundamentals to the auction process that remain critical. Ask your auctioneer for a broad outline of past auction results and business history. Members of the National Auctioneer Association regularly attend profession-specific education. They are happy to share their educational designations and commitment to continuous professional improvement.
How interested will the bidding public be in your property, asset, or collection?
An auctioneer will help establish realistic and reasonable expectations on the amount of interest your auction will command. It is difficult to always accurately predict what an asset might sell for at a public auction. The right auctioneer for you will help you understand the market.
Do they have the time and labor available?
Auctioneers of all sizes and types have a certain amount of capacity or ability to handle your auction adequately. It is essential to ask any auctioneer if they have the time and labor available. So, if all other criteria are relatively equal when comparing auctioneers and auction companies, this might be the determining factor.
Asking these five questions will help you make an informed decision and will improve your auction results. Auctions are a great way to sell items for fair market value. With these steps, you will help ensure a smooth and transparent process.
How to Hire an Auctioneer: Preparing for your Search
Date: March 8, 2021
Author: National Auctioneers Association
Ever wanted to hire an auctioneer? Auction professionals work all around the country selling anything from real estate to cars, farm, construction and recreational equipment, household items, antiques, livestock, commercial property, and raise money for nonprofits. So, if you have something to sell, there’s an auction professional ready to help you sell it. If you want to hire an auctioneer, you might find yourself at a bit of a loss on where to start. Here are five steps to make the selection of an auction professional fast, fun and transparent.
Create an inventory. One of the first questions an auction professional will ask is: What do you have to sell? Creating some sort of inventory will allow you to quickly identify the right professional. This list can be very general or very specific. If you sell real estate or other high-value assets, your inventory might include specific details about the asset. As you create the inventory, be sure to take photos that may assist to the auction professional.
Think about your time frame for selling. Do you need to sell this week, this month or this year? Thinking about how quickly you want to sell something will help answer many questions from the auctioneer and result in a much smoother process.
How involved do you plan to be in the sales process? Some sellers want regular updates on every step of the auction, and others want to sign a contract and forget it. Knowing your own tendencies and desires for communication will help your peace of mind. There are 100s of actions and decisions in successfully conducting an auction, and auctioneers are happy to share as many or as few with sellers as they request.
Who else is needed to make the selling decisions? Does your spouse, relative or business partner need to be involved in the decisions making process? Having these people identified and present at the beginning of the auction process will save you from repeating meetings.
What are your major questions about the auction and the process? A trained and professional auctioneer will seek to answer all your questions and bring up things you have not considered. Write your questions down because during conversations it can be easy to forget something. You want to get all your questions answered before you sign a contract. Once you have these five steps complete, use the National Auctioneers Association’s Find an NAA Auction Professional tool. Using this tool, you can search by geography and specialty. And, since auctioneers often work over a wide area, try looking at the state or region level. If you’re seeing ads in print publications, emails, online, or at an auction, look for the National Auctioneers Association logo. If you don’t see the logo, be sure to ask if your prospective auctioneer is a member. Auctions are a great way to sell, and with these steps, you will help ensure a smooth and transparent process. Source: https://howauctionswork.com/2021/03/08/how-to-hire-an-auctioneer-preparing-for-your-search/
How Do Auctioneers Value a House?
Need to find the value of your house? Auctioneers preach the merit of the marketplace determining the value of anything for sale (true market value), so how can they tell you what your house is worth?
Auctioneers use various information sources and experience to value a house for sale. Economic value is a measure of the benefit provided by a good or service to an economic agent (households/individuals, firms, governments, and central banks). It is generally measured relative to units of currency. The interpretation is therefore, “What is the maximum amount of money a specific actor is willing and able to pay for the good or service?”
An auctioneer would rather offer that the proof is in the pudding. Place it up for bid and let the marketplace define true market value through a public and transparent competition. After all, isn’t that true price discovery?
Despite selling thousands of properties, auctioneers are still surprised at final selling prices every day. Although they can estimate, there are regularly outliers that would have proved their predictions wrong. This isn’t an exact science, and if this was a skill, with certainty auctioneers would be on an island via their yachts by now.
Oftentimes sellers, bankers, creditors, realtors, appraisers, buyers and inquisitive neighbors like to test auctioneers’ skills; they try and see if the auctioneer can predict the ultimate selling price well before the bid-off begins. How do they manage that? How do they estimate value prior to the sale? Well, a true auction professional capitalizes on all the resources they have to estimate or predict value. Data is knowledge and data is more prevalent than ever. Auction professionals utilize a handful of tools that, combined with strong experience, make up a true professional estimate of value.
Current county appraisal/assessment
Although far from an accurate appraisal amount, most counties have been tracking sales data for decades. This data can identify neighborhoods trending up and down in value equating to greater accuracy than decades ago.
MLS sales data
Many auctioneers are subscribing members of their local Realtor association and typically their local multiple listing service. The MLS is a compilation of regional sales data that evolves real time with the marketplace, providing the most relevant data relative to market value.
Past sold auction data
2020’s global pandemic has only heightened the demand of online only auctions. Auctioneers today understand the value of past sold data greater than ever. Many auctioneers own data or subscribe to database systems, which include bidder demographics, contact information and sold prices. An auctioneer can walk into a client’s home and lay out the past 25 properties auctioned in that zip code.
Current or past appraisal
Occasionally, a seller may have engaged a licensed appraiser to provide an estimate of value. Although numbers can be high and low, it can still be a tool or resource to contribute to a professional’s analysis.
So how does an auctioneer value your house? Data. And the experience of a professional. While the auction method of marketing a house for sale is different than what some sellers are used to, it is a fast, fun and transparent way to get true market value for your home!
Four Ways to Tell if an Auction is Legitimate
Maybe you’ve seen an auction advertised in your town or online. Maybe you’ve thought that might be a good place to find exactly what you’re looking for. You’re right, but how do you ensure these auctions will result in a fun and exciting buying experience?
In order to determine if an auction is legitimate or “steer clear,” there are four simple things to look for when you find an auction advertisement.
Look for the NAA logo. Members of the National Auctioneers Association agree to follow a rigorous code of ethics and follow the highest standards of practice when conducting real estate, equipment, automobile, personal property, and other auctions. Many auctioneers and auction companies are also members of their state auctioneers associations, as well as other relevant professional associations. All these memberships give you confidence in the auctioneer and his or her auctions. If you don’t see a logo, ask if the auctioneer is a member.
Look for complete, detailed terms and conditions. Ethical, well-managed auction companies clearly list the terms and conditions and welcome your questions prior to bidding.
Look for other auctions by that company in the past or upcoming. While not true for every auctioneer and auction firm, most successful auctioneers can point to a past list of auctions and look forward to upcoming auctions and events.
Check online reviews of the company on Google and Facebook. If a company has little to no reviews, or a series of bad reviews, be cautious. All companies will have a few bad reviews and good companies will often respond or reply to those reviews in a public posting. If you find a company with perfect reviews and no disappointed customers, also be cautious—as it is nearly impossible to perfectly satisfy every single customer.
Bidding at an auction can be a fast and fun way to buy things you want and need for your home or business. Each year billions of dollars of real estate, equipment, livestock, cars, and commercial and personal property cross the auction block. When a legitimate auction is conducted by an experienced and ethical auctioneer, you can count on a great buying experience.
What is a Soft Close or Dynamic Ending of an Online Auction? Date: January 25, 2021Author: National Auctioneers Association
So you placed your bid on an item during the last minute of an online auction, thinking you snatched it before anyone else had the chance to outbid you. But then the time on the item extends, and you’re left wondering, “What happened?” No, it wasn’t a glitch you experienced—it’s called a soft close (or dynamic ending) to an online auction lot, and this feature is commonly used in online auctions.
What is a soft close (or dynamic ending)?
If someone places a bid in the last few minutes of an online auction, the end time for the specific lot is extended. The process continues until there are no more bids made within the last minutes or seconds. At that point, that specific lot closes. The overall auction continues until each lot has no advance. Oftentimes, online auction companies wills stagger the end times on each of the auction’s items so all lots do not close at the same time.
For example: Lot 1 has a closing time of 1:00 p.m. At 12:30 p.m. Bidder A places a bid. The auctioneer has set the bidding to extend if any bids are made within the last two minutes. At 12:59 p.m. Bidder B outbids Bidder A. The countdown clock resets and now Lot 1 will close at 1:01 p.m. Bidder A and any other bidder have the opportunity to bid. If no bid is made within that last two minutes, the auction for Lot 1 closes and Bidder B wins the lots. If a bid is made, the clock starts over again.
Why do auctioneers use it?
Auction professionals will use a soft close and/or staggering lot ending times to mimic the back and forth of a live auction. More importantly, this technology allows for every bidder an opportunity to advance their bid. This more faithfully captures the true competitive nature of an auction and eliminates sniping or other online strategies or technologies.
Is it fair?
The use of extending bidding allows every registered bidder the opportunity to bid and advance their bid. These systems also allow for bidders with slower or unstable internet connections to be on a more equal playing field.
For real estate and high-value assets, the auctioneer may decrease the bidding extension as the auction progresses and nears the final prices as the number of bidders decreases. This is one of the reasons it is important to read the auction terms and conditions and pay attention to announcements made in the bidding program.
If you have questions about how a specific auction works, contact the auction professional in charge of the auction. They are happy to answer questions and will quickly clear up any confusion.
The overall length of an auction depends on how many lots will be sold, the relative complexity of the process and terms and conditions, and the overall competitiveness of the bidding.
In a traditional live auction setting, excluding real estate, auctioneers typically take 20 seconds to 2 minutes to sell lots. Items might be sold more quickly if:
- The bidders are professional buyers
- The relative value of the items is well known and established
- The items are inexpensive.
Conversely, unfamiliar bidders, unknown value, or high overall value will extend the bidding process several minutes.
When selling real estate it is not uncommon for an auction to take anywhere from 10 minutes to an hour. This is due to the complexity and gravity of the transaction. At some auctions, multiple parcels or tracts of land are offered individually and in combination. These “multi-par” auctions might take several hours to complete.
How auctioneers speed up bidding
Of course, at a true public auction, every bidder will have at least one more opportunity to bid again. This means, theoretically, auctions can go on for a very long time. Skilled live auctioneers will often change the amount of the next bid to help accelerate the bidding process. Auctioneers in live and online auctions may also decrease the amount of time allowed for a bidder to bid. The decrease in the bidding window will increase urgency and speed up the bidding process.
At benefit auctions or fundraising gala events, the bidding may also take more time when compared to a commercial auction. This is due to the auctioneer’s entertainment factor and the charity/non-profit’s desire to fully explain and describe the auction item. At benefit auctions, this is especially relevant with bidders who might be unaccustomed to auctions and the bidding process.
While the settings may change, a skilled live auctioneer will continue to move the auction along to increase the amount raised within a given amount of time. Work with a professional auctioneer to fully understand the overall timeline and pace of your auction.
Date: December 28, 2020Author: National Auctioneers Association After a year of adaptation, what will auctions look like in 2021? A new year always brings new hopes and expectations.
Here are our predictions for the auction industry in 2021.
Limited live auctions
The COVID-19 pandemic will continue to cause live auctions in many states to be restricted or limited in size and scope. There will likely be more live auctions than at the height of the pandemic in 2020; however, this will vary state by state and region by region. Many auction companies have also signaled they plan to continue doing online-only or virtual live auctions for the foreseeable future.
Increase in business liquidation auctions
Businesses of all sizes continue to feel an assortment of COVID-19 related impacts. Some businesses have adapted to these impacts and are thriving, while others have been unable to adapt. As businesses close, that business equipment will make its way to the market via business liquidation auctions.
Continued business by appointment
As a result of COVID-19, many auction companies adopted a model that required customers to make appointments to pick up and remove purchased items and, in many cases, preview items. Both customers and auction companies have indicated this change is likely to stay due to safety concerns, convenience and efficiency.
Fundraising auctions and galas will continue to be online or virtual
Charity and not-for-profit auction events remain a critical fundraising tool for many organizations. There are limited live events tentatively planned for the fall of 2021. Many organizations expect to continue virtual fundraising through much of 2021.
Fewer companies doing more auctions
Mergers and partnerships have been a trend within the auction profession for the last several years. In 2021, this trend will continue, and bidders might see the same number or even an increased number of auctions; however, a smaller group of firms or companies will conduct the auctions.
The auction profession has been a vital part of the economy for centuries. Increased adoption and implementation of technology has ensured that auctions work even during a global pandemic. Auctions are still going on, and there are auction professionals in big and small communities ready to make an auction work for you, your business, or your organization.
Keep these predictions for the auction industry in 2021 in mind as you attend auctions or hire a professional to sell your assets or raise money for your organization. The auction profession, just like the world, has changed in 2020, and through these changes, has become more adaptive and responsive to your needs. Hiring an auction professional will ensure your auction takes advantage of any changes in technology and the speed of e-commerce evolution.