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  • Writer's pictureMike Brandly, Auctioneer

25 basics for every auctioneer

It seems we’re all busy and sometimes forget the very basics of the auction profession. While there are many things every auctioneer needs to know, here are maybe the most important 25 things that every auctioneer should know.

  1. Auctioneers [typically] work for sellers (clients) as their agents with fiduciary duties including obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care.

  2. Auctioneers [typically] work with bidders and buyers (customers) adhering to duties including honesty, integrity, and fair dealing.

  3. When the auctioneer is engaged by a seller, the auctioneer and seller are parties to a bilateral contract.

  4. You are only allowed to earn any profits (commissions, fees) in your agency relationship for which your client has knowledge and consent. You may earn no “secret profits.”

  5. If you charge a buyer’s premium, that premium is part of the purchase price and belongs to the seller unless you specifically note in your contract that you have a right to retain or keep that premium.

  6. When the auctioneer allows bidders to register, the auctioneer and bidders are parties to a bilateral contract with all the same terms (equal footing) * See Alex Lyon & Son, Sales Managers and Auctioneers, Inc. v. Leach, 844 S.E.2d 120 (W.Va. 2020).

  7. When a property is up for bid, the auctioneer is merely inviting offers from the bidders, possibly suggesting an offer amount, and not “offering” the property for sale.

  8. When a property is up for bid, and the auction is with reserve, that property may be withdrawn anytime until the sale is completed.

  9. When a property is up for bid, and the auction is without reserve (absolute) the auctioneer makes a collateral contract (promise) to sell that property to the highest bidder.

  10. When a property is up for bid, and the auction is without reserve (absolute) that property may be withdrawn only if no bid is made within a reasonable time. That property must sell if a bid is made within a reasonable time.

  11. When the auctioneer denotes a property “Sold!” there is a bilateral (sales/purchase) contract formed for that property between the seller and the buyer.

  12. There are only two types of auctions. Your auction is either with reserve or without reserve (absolute.)

  13. Your auction is with reserve by default (except in Louisiana where it’s without reserve by default) and can only be held to be without reserve by using explicit language to that effect.

  14. The seller is the person or entity with complete title. Therefore any other person or entity with only partial title or no title bidding to take title otherwise is not the seller.

  15. If a seller bids (outside of a forced sale) and the right for the seller to bid has not been reserved (disclosed,) the buyer may void the sale or take the property at the last good faith bid.

  16. In a forced sale (for instance, foreclosure, repossession, storage lien, court-ordered) the seller may bid no matter the type of auction.

  17. The Statute of Frauds dictates that real property contracts need to be in writing to be enforceable in court.

  18. The Statute of Frauds suggests that personal property contracts with monetary consideration of $500 or more need to be in writing to be enforceable in court, but typical auction contracts of this type aren’t required to be in writing.

  19. When the auctioneer says, “Sold!” or otherwise the hammer falls for real property, an executory contract is created between buyer and seller with title and payment transferring typically at a later date with a deed.

  20. When the auctioneer says, “Sold!” or otherwise the hammer falls for personal property, title transfers at that moment unless a title is forthcoming, the lots are being shipped, or the terms denote otherwise.

  21. Anything you are selling must have clear title unless the bidders are advised of any title problems which note notoriously that the property is being sold subject to those encumbrances.

  22. Bidders are induced to participate in any auction given the “prospect of a deal” and with adequate marketing, final bid prices are considered “market value.”

  23. Bidders better engage with more disclosure including details about the auction, terms, and the property.

  24. You can’t disclaim any expressed warranties, and you can’t disclaim any implied warranties without giving the buyer a reasonable opportunity to preview the property.

  25. You can have your own terms of auction, but your terms cannot be completely wacko … nor specifically lacking good faith, diligence, reasonableness, or care.

How do I keep track of all this? I talk with dozens of attorneys and sit in several courtrooms involving auction litigation every year. The above list is an overwhelming consensus of those interactions and observations.

Certainly, it’s a good idea to reach out to your own attorney for specific questions about you or your business. If we can help your attorney with any auction-related concepts, feel free to contact us.

Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at Mike Brandly, Auctioneer, Brandly Real Estate & Auction, and formerly at Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.

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