Equipment Auctions...Beware

[MotorSeven]

I am sorry to say that I was a bit naive about auctions. They seem to be getting more pervasive around the country as a sign of the times. I have bought a few things over the past year, and recently tried to sell my dozer at a local auction without any luck. I have learned some things through my observations that I want to share. If others here want to add to the list please do so, because I would like to reveal some of the under handed, manipulative practices that some auctioneers use.

The first is one we all fear, the fake biddeder. Someone working for the auction house walking thru the crowd and using subtle signals at key times durng a bid. This can also be the official looking(well wearing the t-shirt anyway) auction employee doing proxy bids with a cell phone stuck to their head franticly pretending to have trouble hearing over the noise.

Now here is one I didn't know about, but have witnessed. You see, auctions are kinda like a living entity, it gains & looses momentum depending upon many factors. When the tempo is up, more people bid, and bids go higher, tempo down the opposite occurs. The auction houses use fake bidders and better yet non existant bidders to keep momentum. Yelling "sold" when the item never met it's reserve and moving on to the next item sounds way better than "NO SALE". This most likely is not illegal, but to me it is a huge red integrity flag. You have to ask yourself this question...if they go that far to play smoke and mirrors, what else are they doing?

These tactics prey on human emotions. Some of us are more vunerable than others, getting folks to bid on something that the had not intended to bid on, and most likely did not need. So far I have not fallen in the trap because I never bid on something that I do not know it's value. If I want something, but don't know what it's worth, I walk away. But, when I did bid, could I have paid a little more due to bid manipulation? It's possible.

So, if you go to these things, heighten your awarness. Watch the crowd carefully. Pay attention to prices on items that you know the value of even if you were not bidding. Even better, grab a program and write down every winning bid. If you have time hang around after it's over & see who loads stuff up, you may be suprised to see things that "sold" being loaded back up by the vendor that brought them.

There are great deals and fair deals at auctions. There are respectable auctioneers out there that do not play games. For me, if I smell something rotten, I am just getting in my truck and driving away.

So, how about y'all? Stepped in anything at an auction & didn't know it until the wind changed?

RD

 

[PAGUY]

I have my suspicions concerning an auction that I'm participating in presently. It is an auction house that displays your merchandise for a month and accepts written bids during that time. Then on the first Saturday the auctioneers awards the item to the highest bidder on the tag. The thing is a couple of times I have searched for all my items to see how the bidding is going and I haven't been able to locate every item. This leads me to believe the auction house is selling items to "special customers" before the actual auction. I have also experienced being told a few items had "No bid" but when an auctionhouse employee tries to locate these items one may not be found and then I was told that it must have been sold after the auction. So this leads me to believe either the special customers or auction workers are taking advantage of items not bid on at the day of the auction. If it wasn't for the fact that I'm trying to rid my home of stuff I don't need anymore or wouldn't have room when I downsize I might question my observation but then I might lose my source of selling my junk that can be someone else's treasure.

 

[Western]

The few I've been too, I went early, found what I liked, went over it, came up with what I was willing to pay and stuck to it. If they want to bid me out, that is fine. Most of the time I did get out bid, but I never went to buy something that I "had" to have. so I really never get caught up in the "hype".

Cattle auctions are easier to me, unlike auto or equipment auctions, easier to get some one else s headache.

 

[Cat_Driver]

I sorta agree and can understand, but when an item gets up there artificially the "shills" back off pretty early and are pretty insignificant because the shill can get stuck with the item and that's bad for the auction house.


I think if an item is worth 5K and the bidding starts out at $500.00 the shill might bid it up to 2K but then has to walk away.

Remember it is an auction and that NEXT BID is never guaranteed, so all bids can back fire. Besides everyone at an aution bids what they feel comfortable with or on how bad they want that item.

I've been to hundreds of auctions and have seen homes sell for $1000.00 and large big rig tow trucks sell for 3K ( heck you couldn't even buy the tires on that rig fro 3K )

The only time I was stung at an auction I bid in a 2 suit cases at a storage facility auction contents unseen. The guy brought the two suitcases out and set them down by bending his knees sorta squatting like these things weighed 100 pounds each, I won the big and the two suit cases were empty and weighed about 5 pounds each.

Every item I have ever won a big on has been a huge savings for me.

But yes I agree there are scam artists everywhere and it can never be stopped, just big at the max you feel comfortable with and walk away, that's the best defense.

 

[chh]

Some auction companies are pretty straight and some are quite a bit more on the "shady" side. I have seen items end as "sold" and see them a month later still sitting on the lot. The only equipment auction I go to nowdays will either end with "sold" or call "passed out"(reserve not met). If it is close to the reserve and the seller is present I have seen them ask him if he will sell it for the bid amount or if he will change the reserve, some do and some don't. I have seen equipment owners bid on their own items(or have a friend do it) trying to get the bids up, knowing they will have to eat the commision if they go one bid to far. I actually saw an dozer owner run before they could get his bidder number once at a heavy equipment auction. They resold it and it brought about $5000 less the second time.
Most of the time the most common tactic seems to be to have one of the hands try and talk you into one more bid when you stop. I try to have a very good idea of the value of anything I am interested in before I get there and set a price and stick with that limit.
One of the big items here in OK at farm autions is corral panels. There is a company that builds them mainly for that market is it seems and a lot of times they will bring more at auction than you can buy buy better made ones for from the feed store.

 

[two_bit_score]

Inexperienced buyers do get caught up in the auction and bid haigher than they really intend. Experienced buyers rarely do.

What's the difference in experienced and inexperienced?

The experienced one's have been caught up in it enough to know when to back out.

 

[Lloyd_E]

Motorseven,

You nailed it. I used to go to auctions all the time but found your remarks bang on to what was happening at the sales. I do better on kijiji or local inet selling site and negations.

I also do cash deals and if they want to sell it they meet my price - if not I walk away.

Lloyd

 

[Taylortractornut]

Ive sold many an item to a shill Lol. I got tickled one time my neighbor had an auction. He had a parking lot full of items I bid on a consignment and one a trailer type chisel plow. for 25 bucks. There was a nice IHC 4 row planter there and it belonged to a contractor. This boy that was kissin arse before the bidding was braggin Im gonna sell that for my buddy. on an on he bragged about running the price up. This old man got it up to 2000, and the shill got greedy when they said 2100 the old man bidding stepped back and said he can have it. That old boy got a sick look. He still has it in his yard for sale and thats been a few years ago. I also hate it when they already have the new owner picked out. When Belmont homes went out I worked there, they let the workers view items way beforethe sale. The day of the sale i went to buy a 3 phase welder. I got the welder and beside it was a pallet of cylinders about 12 of them. I bid 250 and the other bidder had stopped at 225. I already had my bid in and they took his over mine.
I have a friend that runs and auction company and anyone that offers to be a shill will get asked to leave.
I also dont like an auctionneer that has alot of bs in the works where they kinda visit during the sale and pick at buyers. Ive been to TAC enterpises sale and its no nonsense and they move fast.

 

[QRTRHRS]

I learned alot at auctions by striking up casual conversations with strangers while strolling around scoping out the offerings before the show started. By acting a little naive and curious, people will point out things that you might not have seen or were not aware of as well as what a good price would be.

 

[Scooby074]

I learned alot at auctions by striking up casual conversations with strangers while strolling around scoping out the offerings before the show started. By acting a little naive and curious, people will point out things that you might not have seen or were not aware of as well as what a good price would be.

Thats why i keep my big mouth shut Or if their insistent, point out several "defects" and try to convince them to look elsewhere. I know their games, and play one of my own.

My issue at auctions are the big money guys, the ones that have no idea what a object is or its value, but jump in on the action because several people are bidding on it, "So its gotta be worth somethin".

Dealers at a auction take away some of the bargains. They usually have deep pockets, and always seem to have that extra $100. Usually they dont drop out till theyre within spitting distance of what they'd sell it for retail. They look at a couple hundred profit as good. Ive lost out on several lathes and mills to this.

 

[MotorSeven]

I always knew that the auctions had a potential for shenangans. But after seeing it in person it really bugs me to see people manipulated like a puppet. I know that every marketing strategy is geared to get a person to buy. But this auction thing seems to be trampling ethical lines and seeing it as a normal modus operandi. I refuse to support their actions by participating in this carnie type atmosphere. I guess having the dozer in the auction was what really openend my eyes, as I paid way more attention as seller than a buyer.

RD

 

[marimus]

I've seen auctions where the auctioneer calls for bids around what he thinks its worth, say $500.

No bidders, $450, $400, $350, $300 then someone bids $300 and its away do we here $350? 350? 350? 325? 325? 325 is bid 340 340 the bid now..

345, 45, 45, 45, 45 SOLD! for $545!!
(read that last line out loud).

Now at this point the experienced buyer points at the bid was $345 and the auctioneer correctly notes that as the selling price with apologies.

I see this mistake everynow an then, usually when a new bidder comes in

 

[charlz]

I've seen way more people overpay from lack of experience, lack of knowledge of the items worth or simply getting caught up in the 'action'.

I've been hit by the BS'ing thing, bidding slows way down so they start cracking jokes and talking about how fantastically rare or special the item is this usually gets someone to jump in and run the price up.... but I just let them have it if they have exceeded my price.

Around here there is 10% buyers premium and 6% sales tax.... I think a lot of new bidders forget or aren't thinking about that as they bid. I have seen quite a few people pay new or more than new price for a used item at auction once you factor in the 16%.


Overall I think I have gotten more and better deals off Craigslist than at any of the auctions. But I still like to go to the auctions to see all the 'treasures'

I have seen more shady things with Real Estate auctions where there are larger margins.

 

[forgeblast]

A buddy of mine will do a lot of auctions, from buying to selling. If he bids on his own object and becomes the high bidder he only has to pay for listing the object. I was taken back a bit by this, but then you replay the auctions you have gone to and you start second guessing whats going on.
I learned a lot by going to my first couple of auctions and bidding on one or two objects. I also would sit back and watch what looked like chaos, and try to figure out what was happening. A lot of the older farmers where more then willilng to help me out and let me know who was on the up and up. The older farmers where around a lot longer and where taken by some of these guys so they liked to expose what they where up to. That way when you sit back and watch you see some of the players involved in bidding things up, or if you didnt they would point them out. That way if they would start bidding on something i wanted or just liked i would stop bidding immediatly. But mostly I would have a price in my head, if it went over i walked away, no regrets.

 

[2manyrocks]

This thread reminds me of a guy who showed up late to a house auction. He thought it was going low--and hadn't looked at the interior of the house. He ended up being the highest bidder and then found out that it had a flat roof that was leaking and had a lot of interior damage. It was sold in a hot market--it the house had been any good, it would haven't been up for auction in the first place.

Biggest problem with auctions is in not knowing what shape something is in--then you have all the auction fees and the tricky practices.

 

[Charlesaf3]

Interesting.

A hint on bidding strategy. Don't bid yourself up. Meaning, wait till the bidding slows before you start to bid, so you aren't pushing the price up on yourself through keeping the tempo up etc.

Knowing what something's worth makes a big difference obviously.

 

[Tig]

My peeve is the "speculative banter" Auctioneer is working the price of a table up and as interest peters out he remarks to his assistant. "Say that's a great price for that table. Why it looks like solid oak doesn't it, Roy?" Roy reply's on cue "It sure does" and the bidding picks up to a price that is more appropriate for a table that is solid oak as opposed to one that "looks like solid oak".

 

[scgargoyle]

I go to an auction house that mostly does bankruptcy liquidations. They run a very clean sale- maybe the g'ment will get after them, since it's a bankruptcy auction? There are a lot of dealers there, so prices are decent, but not give-away. I did very well a few weeks ago, though. The auctioneer was getting cranky because things weren't selling, and he started getting ugly with the crowd. Bad move. Prices were very cheap after that, and a lot of people left. I got a like-new Honda generator for $300- and it retails for $3,000! I could have bought a lot more stuff that day, but I'm about out of room for more stuff.

 

[QRTRHRS]

Thats why i keep my big mouth shut Or if their insistent, point out several "defects" and try to convince them to look elsewhere. I know their games, and play one of my own.

My issue at auctions are the big money guys, the ones that have no idea what a object is or its value, but jump in on the action because several people are bidding on it, "So its gotta be worth somethin".

Dealers at a auction take away some of the bargains. They usually have deep pockets, and always seem to have that extra $100. Usually they dont drop out till theyre within spitting distance of what they'd sell it for retail. They look at a couple hundred profit as good. Ive lost out on several lathes and mills to this.

Let me state further that I am not a shill nor a dealer or anything like that. I only go to an auction if I happen to be looking for a piece of equipment of some kind. I do know what you are saying in general though.

 

[charlz]

My peeve is the "speculative banter" Auctioneer is working the price of a table up and as interest peters out he remarks to his assistant. "Say that's a great price for that table. Why it looks like solid oak doesn't it, Roy?" Roy reply's on cue "It sure does" and the bidding picks up to a price that is more appropriate for a table that is solid oak as opposed to one that "looks like solid oak".

Yep, see that lots. However, who do they represent? Is it unethical for them to try to maximize their clients profit? I see some of this as 'doing their job' and some of it as 'buyer beware'.... "It must be worth something! The auctioneer said you just don't see this 'Made in Taiwan' stuff anymore! So I thinks it's rare!"