Buying Advice Auctions?

[joea99]

Thanks for all the comments. After a quick call to the auction house, I had a good feeling about the item I was interested in.

Apparently so did a lot of others. I had set a limit for my bids which allowed for transportation costs. I was out with the first bid. Hammer price, with the fees, was somewhat below the asking price around here. But to me, no worth the aggravation and doubts.

There may be great deals to be had, but, not that day, for me.

 

[lilranch2001]

It seems to me that if you’re bid got knocked out after the first round your expectations were a bit low ( high)

 

[joea99]

It seems to me that if you’re bid got knocked out after the first round your expectations were a bit low ( high)

Either way, you're right.

I had always heard these tales of "great deals" at auctions. Must have been an alternate universe.

 

[EddieWalker]

I was sitting next to a guy at an auction a few years ago from up North. He said that he travels all over the country to buy tractors at different auctions. He liked my area for buying Kioti tractors. He said that they sell cheap here, and he can make money selling them where he's from. I forget where that is. In other areas, he finds other brands that don't do well there, but he can make money hauling them back to where he's from. I didn't see him buy anything, so I can't say what a good deal was for him.

If I'm interested in something, and I've looked it over, I'll see what it sells for with my phone so I know where it's a deal. Several times I've seen people pay more for a used implement then it sells for brand new.

This is where I like to go for their auctions. J & K Auction Service The auctions are usually once a month, but sometimes, they might skip a month. Everything sitting around for the auction can also be bought for a price from the sales guys that run the place. It's like a massive used tractor lot with implements and other stuff all month long, but when it's auction day, they try to get rid of as much as possible. The auctions are pretty big with at least a hundred trucks with trailers parked all over the place to haul off what they buy. Parking is a huge challenge!!!

 

[CobyRupert]

There’s an old saying “It only takes 2 fools to make an auction.”

Only bid against yourself (i.e your upper price limit.)

Never bid first, you’re just bidding against yourself at that point.

The price that someone else pays for an item at an auction, is irrelevant. Forget about it. It will only haunt you. It was fundamentally impossible for you to get it at that price (see line 1).

The “market” price is irrelevant at an auction. The “market” is the people who are there.

Never trust a stranger at an auction. I had friends go to a county foreclosure sale to buy a specific house they were interested in. Multiple houses being auctioned. Just a handful of the “regular” buyers and my friends are there. Man approaches them. “Hey strangers, which house are you interested in?” “…Me too!” (Sure he was, not!) “I buy and flip. Say, instead of us bidding against each other and driving price up, how about only I bid, and sell it to you for $x ( close to the accessed value) .” ..which he knew (or was told or guessed) was also their upper bid limit. They agreed. The guy bought it and sold it to them 15 minutes later. He made a neat $30,000 in those 15 minutes, and didn’t have to spend 8 months evicting the current tenant, or worry about the condition of the house, or rehab costs (a lot!), or pay property taxes while it’s getting flipped.

I thought it was genius on his part. Be that guy at the auction!!

 

[Sonny580]

The items are at auctions for a good reason!!! Sumpin wrong and seller dont want to spend the money to fix it in most cases!!!! Bid accordingly!!!

 

[CliffordK]

Keep in mind that prices at auctions can go up quickly. So, your tractor may be languishing around $1000 for a week before the auction ends. Then jump up to $10,000 the day before the auction, then doubling during the live phase of the auction.

There are quite a few good deals at auction. However, I find it annoying that some individuals will send their broken junk to auction. And the auctioneers seem to think it either isn't worth their time to be thorough, or perhaps that they'll sell items for more if they keep some negative details quiet.

 

[CliffordK]

The items are at auctions for a good reason!!! Sumpin wrong and seller dont want to spend the money to fix it in most cases!!!! Bid accordingly!!!

It all varies. In some cases that is true. In other cases a person is just getting an upgrade. Or, one has a business that closes or an estate that is being settled, and one gets surplus equipment.

However, too much broken equipment gets sold as good. Some should have been hauled directly to scrap.

 

[Lastkidpicked]

If you want the best auctions, look for the term "Dispersal Auction"

This means a farmer has retired and is selling everything at auction. Much different than a consignment auction, where lots of different people bring in their stuff to be sold.

 

[paulsharvey]

Oh yeah. I forgot about buyer's and seller's fees. More and more I'm seeing buyer's fees. If there is a 10% buyer's fee that means you will have to pay an additional percentage on top of the bid that won the auction. a 10% buyer's fee on $10,000 would require $11,000 paid to settle your winning bid.

Shoot, better have close to 25% above the bid price; 12.5% buyers premium; 3% card fee; plus 7% sales tax. It's gotten to the point where it has to be a real good deal to make it worth it...

 

[Lastkidpicked]

However, too much broken equipment gets sold as good. Some should have been hauled directly to scrap.

This is one example of how efficient our economy is. The auction company near us has a business relationship with a metal scrapper. At the end of each auction, the scrapper comes in and picks up any "No Sales" and hauls them off for scrap. He gets this for free.

The flip side of this is he has to pick up everything left behind. So he has some expenses getting rid of some items, but that's okay becuase he makes enough on the recycling.

It's a win-win for everybody.

 

[EddieWalker]

Not related to tractor and farm auctions, but I had a client who owned a used car lot in town. He would buy the cars for $50 each at the car auction and then list them for a grand or more. They where all older cars with some miles on them, so the people buying them tended to not have a lot of money. He financed them for a couple hundred down, and expected them to quit paying after awhile . Usually he'd get a year or two of payments out of those cars, but he already made his profit from the down payment. Every payment that he got was just bonus cash in his opinion. This was a retirement business that he owned, and he made enough to make it worthwhile, but it wasn't something that he relied on. He probably sold a dozen or so cars a month.

 

[Sonny580]

Buyers premium here is up to 15% now on the average. A few years ago there was 0%, then 1.5, then 6%, etc, etc. ----Taxes on top of that and that "CHEEP" item just went thru the roof!! lol!!!

 

[CliffordK]

Shoot, better have close to 25% above the bid price; 12.5% buyers premium; 3% card fee; plus 7% sales tax. It's gotten to the point where it has to be a real good deal to make it worth it...

No sales tax here in Oregon.

Most auction companies will accept either cash or cashier's checks, and sometimes personal checks at no fees. Due to COVID, most have gone online, so one generally has time to stop by the bank before heading there to pick up. If you're over $1000 in the purchase, then even wire transfer may be cheaper than the Visa.

I think the auctioneers make all their money from the buyer's premium. So, if the sale is $100,000, then they earn about $10K (at 10%), out of which they pay all their employees, rent any equipment, pay advertising, and etc. And, it often takes substantial time to organize an estate auction, as well as doing loadout.

 

[workinonit]

The items are at auctions for a good reason!!! Sumpin wrong and seller dont want to spend the money to fix it in most cases!!!! Bid accordingly!!!

May be true in some cases but here that is not the norm. Especially for bigger ticket items.

 

[newbury]

The items are at auctions for a good reason!!! Sumpin wrong and seller dont want to spend the money to fix it in most cases!!!! Bid accordingly!!!

That's one of the benefits of many Government auctions for equipment like tractors. Many places have a policy of getting rid of equipment due to age and many get rid of equipment when they have a policy change.
One site near me auctions off a few ~40HP tractors a year, very lightly used.
About 10 years ago our school system had a change to decrease "shop" classes, increase "computer" classes. Almost every high school had to change "woodshop" classrooms to "computer" classrooms.
There was a glut of used jointers, drill presses, planers etc. on the market. I was picking up a load of such and was given a 18" Band saw in good condition because they needed the space.

 

[4get gto]

Buyers premium here is up to 15% now on the average. A few years ago there was 0%, then 1.5, then 6%, etc, etc. ----Taxes on top of that and that "CHEEP" item just went thru the roof!! lol!!!

Most buyers premiums around here in Eastern Pa. are 19% +6% tax . Across the river in New Jersey its 21% + 7% sale tax...but people still keep showing up..
Buyers Premiums are just another money grab. Plus they charge YOU tax on it so they don't have to. And its their profit....

 

[MattB4]

Either way, you're right.

I had always heard these tales of "great deals" at auctions. Must have been an alternate universe.

It happens just enough that people are lured in. Sorta like gambling. If no one ever won it would quickly lose a following.

One of the things that amuse me about Auctions is if I get interested in some piece of equipment it seems everyone is interested in it and makes bids like no tomorrow. But I see the results of past Auctions of the same model and it was sold for a rather reasonable or even low amount in terms of what I would offer.

 

[LouNY]

Most buyers premiums around here in Eastern Pa. are 19% +6% tax . Across the river in New Jersey its 21% + 7% sale tax...but people still keep showing up..
Buyers Premiums are just another money grab. Plus they charge YOU tax on it so they don't have to. And its their profit....

That kind of buyers premium is pure dee nuts.
Most of the ones that I've seen around here at at 10% with a cap on the premium of not more then a set amount per item. Personally I tend to avoid most of the auctions with the buyers premium or I have to factor that in my bids. Last time I stopped bidding on an item and the auctioneer was trying to get me to go again I told drop the buyers premium and I'd think about , got quite a response from other bidders and the auctioneer and I had a conversation about it after the sale. Didn't change either of our minds but he did learn that the buyers premium was one reason for less bidders then he used to see.

 

[Lastkidpicked]

About 10 years ago our school system had a change to decrease "shop" classes, increase "computer" classes. Almost every high school had to change "woodshop" classrooms to "computer" classrooms.
There was a glut of used jointers, drill presses, planers etc. on the market. I was picking up a load of such and was given a 18" Band saw in good condition because they needed the space.

Is anybody else saddened just by reading this?