Auctions - Auction Education - How Does an Auction Work?

Services for Real Estate Pros with Palatium Auctions Moving, Downsizing, Liquidation Auctions, Estate Sales. 314-690-1978 Certified Personal Property Appraisals

"How do Auctions Work"? and "What does the Auctioneer say?" are questions I'm oftern asked by clients.

There are generally three types of Auctions used to sell Real and Personal Property.

Types of Auctions

Absolute Auction (or auction without reserve)
1. The property is sold to the highest bidder, regardless of the price.
2. Since a sale is guaranteed, buyer excitement and participation are heightened.
3. Generates maximum response from the market place.
4. Many sellers, including financial institutions and government agencies have begun to use this method more frequently.

Minimum Bid Auction
1. The auctioneer will accept bids at or above a published minimum price. This minimum price is always stated in the advertisements and is announced at the auction.
2. Reduced risk for seller as the sales price must be above a minimum acceptable level.
3. Buyers know they will be able to buy at or above the minimum.
4. The seller may, however, limit interest in the auction to only those buyers willing to pay the minimum bid price, and therefore it must be low enough to act as an inducement rather than a hindrance.

Reserve Auction (an auction subject to Seller's Confirmation)
In this scenario, the high bid is reduced, in effect to an offer not a sale. A minimum bid is not published, and the seller reserves the right to accept or reject the highest bid within a specified time -- anywhere from immediately following the auction up to 72 hours after the auction concludes. Sellers predetermine the price at which the property will be sold and are not obligated to confirm a sale other than at a price that is entirely acceptable to them. The main disadvantage of a Reserve Auction is that prospective buyers may not invest the time and expense of due diligence when there is no certainty they will be able to buy the property even if they are the highest bidder.

The trademark bid call of an Auctioneer can be broken down into two parts:
Statement: “I have 5 dollars”
Question: “Will you bid 10”
Speed it up and repeat and you have the famous chant of an Auctioneer!

Some Fun Facts - according to the National Auctioneer Association

Consumers are willing to drive 1.3 hours to attend an auction
83% of consumers feel auctions are an exciting way to get great values and deals
65% think they offer exciting items they wouldn’t otherwise purchase
97% think auctions are FUN!!!

Attend an Auction!

Posted by

 Cathy Roesch Palatium Auctions

Cathy Roesch, Auctions, Appraisals
Online Auction Expert
Palatium Auctions and Liquidations
618-406-2065 mobile or 618-233-1000 Office

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All original text, video, and photo content is the exclusive property of Cathy Roesch and / or Palatium Auctions (the Company) and may not be used without expressed written permission. All information deemed reliable but not guaranteed. All personal, real and intellectual property is subject to prior sale, change or withdrawal. Neither the Company or information provider(s) shall be responsible for any typographical errors, misinformation, and misprints and shall be held totally harmless. Listing(s) information is provided for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. The Company has no control over the quality, safety or legality of the Auction Items listed, the truth or accuracy of the listings or any other information provided by Sellers about the Items. Listings may be sold, withdrawn at any time or subject to change without notice.



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Cathy Roesch 618-233-1000

St Louis MO Auctioneer, Estate Appraiser & Auction
Should I have an Estate Sale or Auction? What's the difference?
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