By: Gov Auctions | 28 July 2015
What Auctioneers Don’t Want Bidders to Know
Here’s the truth: in the world of business or marketing, everyone keeps something from you. It may be a trade secret or information that can take the marketing power or competitive edge away from them.
The same principle applies at auctions, but today you’ll learn some “secrets”:
- There’s a reason why they speak fast. One of the biggest mysteries when it comes to auctions is why auctioneers speak above average speed. First they are expected to sell so many things in only a short amount of time. Second, it’s a strategy. The less time you think, the higher the chances they can take a bid from you.
- Not all auctions are advertised. Do you know there are hundreds of auctions in the country happening regularly? But you don’t know most of them simply because most auctioneers don’t take time to market. Many already have a steady stream of bidders, aka dealers and traders. Fortunately there are already websites that can give you a reliable database of auctions so you can keep track of them properly.
- Lots can come from the government. A common misconception is that items in an auction come from private institutions such as banks and other lenders. A good number of them are also from the government.
- If you’re wondering why governments participate in auctions, well, there are a couple of reasons:
- They need to let go of their excess assets. After all, assets such as cars or old buildings require money for maintenance.
- They don’t have any purpose for these assets. Rather than let them depreciate quickly, they’re better off being sold while they still can enjoy some market value.
- They are not in the business of keeping certain things. Cars that have been seized through certain laws or regulations can’t be kept. But instead, they need to be converted into funds, which may then have to be turned over to treasury.
- You don’t always win in auctions. By joining auctions, you can save as much as 50% to 90% of a property’s book value. However, that doesn’t really happen all the time. Sometimes you end up paying more than its market value. This usually happens when it’s a prized item. Thus, it’s always best to perform your due diligence.
- Once you get hold of the list of auctions, choose the ones you want to participate, learn about the lots, and research as comprehensively as you can, particularly their present market value.
- You can perform inspections. It’s unfortunate how people tend to forget or ignore a very critical step: inspection. During this process, you’re allowed to scrutinize the items, though you may not be able to touch or, in the case of vehicles, test-drive them. Take note, though, that inspections can happen only an hour from the actual auction, so always be prepared.
- When they say items are as is, they are correct. Auctioneers don’t have the time in the world to inspect all of the items. It’s your job. So if you learn that there’s a lien on a property, for instance, the fault is yours, not theirs.