Want to know how an auction works? Here's an overview of how auctions work. This should answer most all of your questions about how we do auctions.
The very first thing you need to know about auctions is that in most cases ANYONE MAY ATTEND.
MOST AUCTIONS ARE PUBLIC EVENTS. THERE IS NO SPECIAL LICENSE YOU NEED, THERE IS NOT SOME MYSTERIOUS SECRET CLUB YOU HAVE TO BELONG TO, YOU DON'T HAVE TO PAY SOME KIND OF FEE TO ANYONE TO LEARN ABOUT AUCTIONS. ANYBODY CAN GO TO AUCTIONS. Most of the people who go to auctions are friendly and sociable. Most are helpful. You can pick up terrific bargains at auctions and that's why people go to them!! We think the idea that auction-goers are a closed community comes from wholesale car auctions where you have to be a car dealer to attend, BUT THE VAST MAJORITY OF AUCTIONS ARE OPEN TO THE PUBLIC. All you need is a driver's license or state issued idendity card, see the Registration section below for why...
ALL OF ABSOLUTE AUCTION CO. AUCTIONS ARE OPEN TO THE PUBLIC.
The first time you attend an auction you'll pick up what's happening very quickly. If you have questions someone with the auction company will be happy to answer them for you.
In order to bid you have to register. Registration and entrance to the auction are free. Registering only takes a few minutes the first time you register. (At subsequent auctions registration only takes seconds.) To register you have to have and show a driver's license or state issued identity card. The reason you have to register and show your identification is that when you bid at an auction you're entering into a legal contract with the auction company. You bid, you promise to pay. That's why we have to know who you are.
We pledge and guarantee that your e-mail address, or any incidental "marketing" information about you accumulated in the process of doing business, will NEVER be sold, rented, given, loaned, or in any other way transferred to another entity, short of a court order. In other words, you will neither receive junk mail, physically or electronically, nor will your personal privacy be invaded because you've joined our mailing list or you've done business with us.
Inspection or Preview Period
Before every auction an amount of time is allotted for bidders to examine the goods to be sold. This is a very crucial time. Bidders should examine any items upon which they want to bid and make sure they know just what they're bidding on.
This period is usually an hour before auction start, though sometimes it may be more or less time. The preview time period is always announced in all of the auction promotional materials. It is very risky to bid at an auction without having inspected the items first. If you bid on an item you haven't inspected and then it turns out it isn't what you thought it was, you are out of luck.
Warranties and Guarantees
There aren't any. Items sold at auction are sold "as is, where is" without any warranties or guarantees whatsoever. There are no refunds or adjustments. The only time a refund or adjustment will be made is if there was a misrepresentation in the description of an item. If an item is said to be working and it isn't, or if an item is described as something it isn't, then the auction company will refund or adjust the purchase price.
The items to be sold at an auction are organized into what we call "lots". A "lot" is defined as one or more items with a single inventory number. Some things are sold individually, some are sold in groups. One lot might be a TV set, one lot might be a five piece bedroom set, one lot might be a diamond ring, one lot might be a set of china. The inventory numbers have come to be called "lot numbers."
Lots are either composed of like items, e.g., five vases, three computers; or sets, wherein the items go together but are not the same, e.g., a set of dishes, a set of golf clubs; or location. Sometimes the only sensible way to sell some items is by the shelf, or the contents of a closet or cupboard. The auctioneer will make it very clear exactly what is included in each lot.
Cataloged And Non-Cataloged Auctions, Length of Auctions
An auction catalog is a printed document that lists all the lots to be sold in numerical order. For each lot there is a quantity and a description. Almost always the items are sold in the order listed in the catalog. If there is going to be a deviation from the numerical order bidders will be advised at every opportunity. Some auctions are cataloged and some are not.
Absolute Auction Co. does more non-cataloged auctions than cataloged auctions. When we are liquidating an estate or large business, many times we will catalog the auction in advance. On smaller auctions we usually work without a catalog and do the auction "on-the-fly."
Cataloged auctions are almost always sit-down auctions. Bidders inspect the items to be sold, mark what they want to bid on in their catalogs, and when the auction starts, all the bidders are seated together in one place. A cataloged auction moves at the rate of about 100 lots per hour.
With a cataloged auction, if a bidder is interested only in lots being sold later in the auction, that bidder can leave the auction and come back approximately when those items will be sold. There are no guarantees when an item will be sold, but estimating the pace of the auction at 100 lots per hour, the bidder can get a good idea when he or she should return to bid.
Non-cataloged auctions are usually done standing up and moving around. Since there is no catalog, the description of each lot has to be punched into the computer as the item is being sold. The auctioneer will say "Lot 123 is a five piece bedroom set." The clerk will type that into the computer. Then the lot is sold. Because of this, on-the-fly auctions go slower than cataloged auctions, usually at a rate of about 50-70 lots per hour.
With non-cataloged auctions the bidders usually follow the auctioneer through a house, apartment, or business. A lot number is slapped onto an item or group of items, the item is described, and the bidding starts. With this type of auction it is much harder to predict when specific lots will be sold and therefore much more difficult for a bidder to leave and return when he thinks the lots he wants will be sold.
During this type of auction the auctioneer may ask the bidders how they want to buy items, i.e., individually or in group lots. "Is anyone interested in buying all these filing cabinets in one lot, or do we have bidders who want to buy them individually?" After he gets input from the bidders he will then make a decision which way to sell them. The auctioneer, however, has complete charge of how he wants to group and sell lots. Other methods of deciding how items are grouped is discussed under the heading below of "Bidding by Quantity"
The Auctioneer's Chant
Some people refer to it as "fast-talking", but the vocal style an auctioneer uses to call bids is called a "chant." If you've never been to a live auction before you've probably still heard it in movies or TV. Every auctioneer develops his own style of chant and some are easier to understand than others. The purpose of the chant is to move through the bidding as rapidly as possible.
The basic chant is simple. The auctioneer starts out asking for an opening bid. Once he gets an opening bid he asks for the next bid. That's all there is to it. "I have a 20 dollar bid, would you bid 25." A good auctioneer doesn't confuse anybody, he keeps them informed of the bid he has and the bid he wants. Anything else added to that is for style, but the style should not obscure the information.
Bidding at an auction is simple. When you register you are given a bidder card with a number on it. To bid you merely raise the card in the air and make sure the auctioneer sees it. If the auctioneer doesn't see you he won't take your bid. If the auctioneer doesn't seem to be looking in your direction you can speak out to get his attention. This won't often be necessary, but it does happen. All auctioneers occasionally miss a bid.
Veteran bidders develop their own style of bidding. While most bidders will raise their card or hand, some bidders want to be more subtle. Some bidders don't even want other bidders to know they are bidding. They develop subtle bidding styles, like a small nod or raising a finger. This only works if the auctioneer becomes aware they want to bid. If you want to employ a subtle bidding style make sure you are in tune with the auctioneer.
It seems that before people have been to an auction, it's difficult for them to understand the way bidding opens. They ask: "Where will the bidding start on that item?" The fact is that the opening bid is usually up to the bidders.
When the auctioneer is going to start the bidding on a lot, he will generally tell people approximately the market value of the item, then suggest an opening bid. He might say "Market value on this is about 150 dollars. Let's start it out at 75." If he doesn't get a bid at 75 he'll ask for less, say 50, and then less again, say 25 until he gets an opening bid. Once he has the opening bid, he asks for the next bid at an increment of his choosing.
The "increment" is the amount by which the bid advances. To begin with, the auctioneer chooses what the increment will be on a particular lot when he gets the opening bid. The increment has a lot to do with how fast the bidding goes on an item. Bidding with an increment of 5 will advance this way: 5, 10, 15, 20, 25, and so on. With a 25 dollar increment it will go 25, 50, 75, 100 and so on.
Typical increments are 1 dollar, 2.50, 5, 12.50, 25, 50, 100, and with very high value items, 250, 500, or 1000.
The auctioneer may change the increment during the bidding. If the bidding stalls at, say, 50 dollar increments, he may ask for a 25. If the auctioneer has a bid of 400 the bidding stalls at 450, he may ask for 425. If he has a bid of 75 and is asking 100, he may drop the increment and ask for 87.50; and so on.
Sometimes a bidder will signal the auctioneer he wants the increment cut in half. This means he's willing to bid half the increment but not the amount the auctioneer is asking for. If, the bid is at 300 and the auctioneer is asking for 350, the bidder might signal or call out "how about 325?"
The important thing to know is that the auctioneer is in charge of the increment. He may reject a bidder's request to cut the increment, he may refuse a bid not on the increment. If the bid is at 7.50 in 2.50 increments, he will almost certainly reject a bid of 8.
Bidding By Quantity
Most lots sold at auction are sold as a quantity of one. If a lot is five vases or three filing cabinets, it will be sold as if it were a single item. Your winning bid of 100 dollars means you get all five vases or all three filing cabinets for 100.
A variation from this, however, is selling by quantity, or, as it is called "times the money." If there are 10 filing cabinets, for instance, being sold "times the money", then what you bid is multiplied times the quantity of items on which you're bidding. If you bid 12.50 times the money on 10 filing cabinets, you're actually going to pay 125.00. Think of it as unit pricing.
A variation on "times the money" is "bidder's choice." Bidder's choice is only employed in "times the money" situations. If there are 10 filing cabinets being sold times the money with bidder's choice, then the winning bidder gets to choose how many of the filing cabinets he wants at that price.
Let's say the winning bid is 25.00. The bidder then picks how many of the cabinets he wants. Let's say he chooses to take 4. That leaves 6 filing cabinets to sell. Bidding reopens. This time the winning bid is 20.00. That bidder chooses to take 4 of the cabinets leaving 2. And so on.
Bidder's choice gives the bidders the opportunity to insure they'll get the number of cabinets they want. Sometimes the first bidder will take all of the items. Sometimes only 1 or 2. It depends on how many he wants.
An alternate method of grouping items is called "Tie and Bundle." This is employed when there are several related items and it makes as much sense to sell them individually as together. The auctioneer may then employ the "Tie and Bundle" strategy. With Tie and Bundle, several items are sold item by item provisionally. When the bidding on the items individually is done, the highest bids for each are added up and a total is computed. The auctioneer will then ask for bids in excess of this sum on all the items as one lot. If no one is willing to bid more than the sum of the provisional sales, the sales stand. If someone bids more, then the highest bid for all the items in one lot will prevail.
An example might be sports cards. There might be three collections of sports cards, basketball, baseball, and football. Some collectors might just want a particular sport and want to bid on the collections individually. Some dealers might want to buy them all together. If the auctioneer decides to sell them with Tie and Bundle he'll sell each collection provisionally. Basketball sells for 100, baseball sells for 150, and football sells for 200. That's a total of 400. The auctioneer will then open the bidding for all three collections as one lot. He'll ask for 425 dollars. If someone bids 425, the bidding continues until someone wins the bid. If no one is willing to bid in excess of 400, then the provisional sales stand.
Bidding at the Hammer
Section 2328 article 2 of the Uniform Commercial Code states: "A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner. Where a bid is made while the hammer is falling in acceptance of a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods sold under the bid on which the hammer was falling."
Absolute Auction Co. does not use a "hammer", or gavel, and the sale of an item is announced when the auctioneer calls out "sold."
If there is a dispute over whose bid was taken the auctioneer will, at his sole discretion, either award the bid to one of the bidders or reopen the bidding.
Reserve And Minimum Prices
A reserve price is the lowest price for which an item can be sold. It is very similar to a minimum price. A reserve price is generally not told to bidders, a minimum price always is. It amounts, really, to the same thing. This is typically with items consigned for auction. The owner of the item sets the reserve price. The auctioneer cannot then sell the item for less than its reserve. He may accept bids less than the reserve to get the bidding moving, but still cannot sell the item for less than the reserve. With a minimum price, he can't even accept a bid less than the minimum.
The term "absolute auction" is a legal term. It designates an auction in which there are no reserve prices or minimum bids and in which every lot will be sold to the highest bidder regardless of the price.
The name for this auction company, Absolute Auction Co., is taken from that legal term, but all auctions Absolute Auction Co. does are not necessarily absolute auctions. The name was chosen to honor the purest form of auctions. All abandoned property auctions are absolute auctions.
Absentee or Proxy Bids
Most auction companies will accept absentee bids from regular bidders. The bid may be used as an opening bid, or someone on the auction staff may proxy bid for the bidder. What that means is you give the auction company a maximum bid and someone on the staff will bid for you just as you would if you were there. Sometimes you will win the item at less than your maximum bid, and sometimes you won't win at all. When you submit your absentee bid you will be told whether it will be used as an opening bid or if your bid will be handled by a proxy bidder.
Phone bidding is sometimes available to bidders who are regular customers of the auction company. Unfortunately, it requires more staff to accept phone bids than we can normally handle. On items of significant value and extensive interest, the auction company will accept absentee bidders and high absentee bidder has the opportunity to phone bid.
The auction clerk is the person entering the winning bid and bidder number for each lot into the computer. This requires a great deal of concentration and focus. It is important that during the auction no one talks to the clerk or interferes with what she is doing. If the clerk becomes distracted, errors may be made or the progress of the auction may be stopped. So, PLEASE DO NOT SPEAK TO THE CLERK DURING THE PROGRESS OF THE AUCTION.
Check-out is when the bidder pays for his purchases and gets them together. The auction software keeps a running total of winning bids and amounts. The bidder will receive an invoice when he checks out that will detail each lot he won, the description, and the sale price.
Sometimes check-out will be available during the auction and sometimes it won't be. Usually with larger auctions there is both a clerk and a cashier/registrar. When a bidder is finished bidding he can go to the cashier, pay for his purchases, and begin collecting them.
If there is a clerk and a cashier for an auction, a bidder may ask the cashier during the auction what his total to that point is.
With smaller auctions many times we will not have a cashier/registrar in addition to the auction clerk. At those auctions, check-out is held until after the auction is done. Without a cashier, it is also impossible to check your running total of purchases to that point.
Removal of Purchased Items
Buyers are responsible for removing and transporting their purchases. The auction company may have casual labor available to help, but if you ask for their help you will be expected to tip the laborers. How much you tip them depends on the amount of labor involved. To carry a box of dishes to your car requires much less effort than carrying and loading a bedroom set, so the tip should be commensurate with the effort involved.
In most cases all purchases must be removed within two hours after the auction. If you purchase large items or a copious amount of items, you may be able to make arrangements to return on a different day. This needs to be arranged in advance of the auction, however, especially before you bid on an item. You should always check if you suspect you will not be able to remove your purchases within two hours following the auction.
Your Responsibilities As A Bidder
As a bidder you are responsible for inspecting whatever items you might want to bid on, and knowing what those items are and in what condition they are. After you are done bidding, you are also responsible for making sure you get all the lots you won and all the parts and pieces of each lot. Don't depend on those helping you to check out, you need to make sure you have everything.
Payment is accepted only in legal tender of the US of A. If you've won items in the auction, those lots must be paid for the day of the auction before you leave the auction. Terms are cash, Visa and Mastercard debit or credit cards, OR Discover. We DO NOT accept American Express or checks except for people on our pre-approved list.
Locations of Auctions
You never know where we're going to turn up next. Read down the list of cities on the past auctions schedule.
Absolute Auction Co. does auctions all over the entire greater San Francisco Bay area, including the South Bay, Peninsula, East Bay, and Monterey Bay areas. Absolute has had auctions in Santa Clara County in Gilroy, Morgan Hill, San Martin, San Jose, Santa Clara, Milpitas, Sunnyvale, Cupertino, Los Altos, Los Gatos, Saratoga, Mountain View, and Palo Alto. In Monterey County, we've been in Monterey, Salinas, Sand City, and others. In Santa Cruz County, we've done auctions in Santa Cruz, Boulder Creek, Ben Lomand, and others. In San Mateo County Absolute has conducted auctions in Menlo Park, Atherton, Redwood City, Belmont, San Mateo, Foster City, Burlingame, and South San Francisco. Absolute services the city and County of San Francisco. In Alameda County we've been in Fremont, Union City, Newark, San Leandro, San Lorenzo, Hayward, Castro Valley, Alameda, Oakland, Berkeley, El Cerrito, Emeryville, Pleasanton, Dublin and Livermore. In Contra Costa County Absolute has done auctions in San Ramon, Walnut Creek, and Richmond. Absolute has also done auctions in the San Joaquin County in Tracy and Stockton.