Buying an auction item is a unique but fairly straightforward process. This article will help you walk through what to do as a first-timer at an auction. Read on to discover how the auction process works, as well as bidding tips and strategies!
An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder. Some exceptions to this definition exist and are described in the section about different types. The branch of economic theory dealing with auction types and participants’ behavior in auctions is called auction theory.
The open ascending price auction is arguably the most common form of auction and has been used throughout history. Participants bid openly against one another, with each subsequent bid being higher than the previous bid. An auctioneer may announce prices, while bidders submit bids vocally or electronically.
Auctions are applied for trade in diverse contexts. These contexts include antiques, paintings, rare collectibles, expensive wines, commodities, livestock, radio spectrum, used cars, real estate, online advertising, vacation packages, emission trading, and many more.
Here is How to Bid at an Auction
Attend a few auctions without bidding.
This will help you understand what the auction involves and the procedures that are followed. It will also give you a good idea of how people bid and react to price increases.
Inspect the items or property prior to bidding.
This is very important for property, as auctions are usually sold “as is”, so get your building inspections done in advance! For goods, pre-inspection times are set by the auctioneer, usually the day before or perhaps only hours before the live auction. Make use of this time; there is no point rocking up at the last minute and thinking you can work out what you want to bid on and why!
Speak to the auctioneer well in advance of the auction if you have questions or need clarifications. If there are things you’re not sure about, such as the title, condition of sale, auction process, etc., be sure to ask. It is useful to ask how long the auctioneer thinks it will take to get through the lots too. Most importantly, make sure you understand all the payment instructions and requirements before registering for an auction.
- Writing a personal or travelers check or using a credit card is not the same as cash. Many auction houses only accept cash.
- Many auction houses add a buyer’s premium and local taxes (such as general sales tax), so be prepared to pay more on top of the winning price. Find out in advance.
Get there early.
This enables you to get a good position and helps you see the auctioneer and the auctioneer see you.
Pre-register and get a bidding number.
Most auctions today require that anyone intending to bid be pre-registered with the auctioneer and assigned a bidding number. This bidding number is usually written on a card that the bidder can hold into the air, signifying to the auctioneer of the intent to bid. The registration is on-site.
- If you do not register and receive a bidder number you will not be allowed to bid.
- While allowing a bit of privacy for bidders, it enables being recognized as a bidder by the auctioneer.
- The auctioneer will announce the number of the winning bidder along with the winning amount.
Be clear when making bids.
Call out, put your hand up, flash your bidding card, etc. Basically, do whatever is effective in calling attention to your bid. If the auctioneer misses you, repeat your action until he or she sees you.
- The fall of the hammer constitutes the sale. A bidder can withdraw a bid prior to the fall of the hammer but not after; after, a contract of sale has been formed.
- If the hammer falls and you made a bid but the auctioneer did not see you, dispute the sale and ask for the bidding to be reopened. The auctioneer does not have to comply but if others saw you bidding and back you up, you might succeed. This is why it is important to be clear about bidding.
Be ready for the delivery
Have transportation ready or be prepared to pay for delivery. Auction houses tend to like fast clearance of purchased items, so be sure to have your transport options sorted out in advance.
wikiHow. “7 Ways to Bid at an Auction – WikiHow.” wikiHow. wikiHow, September 6, 2008. https://www.wikihow.com/Bid-at-an-Auction.