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  • Writer's pictureMike Brandly, Auctioneer

Seller motivated, ready … but not really

I almost spit out my … ahem … coffee. The ad says the seller is motivated to sell, ready to sell … but the auction is subject to this seller’s confirmation meaning the seller isn’t motivated nor ready to sell.

Auctions are two types: (1) where sellers believe in the process and sell absolute. (2) where sellers don’t necessarily believe in the process, and sell “with reserve” — the worst of which is a right to accept or reject the highest bid.

There aren’t any sellers who are motivated and ready (suggesting they believe) who are selling with confirmation (where they don’t believe.) This auction will likely result in a smaller crowd of registered bidders due to the lack of a “prospect of a deal.”

Ironically, this means they will need this “confirmation” protection. As we wrote, “reserve” auctions need reserves because fewer bidders engage. https://mikebrandlyauctioneer.wordpress.com/2023/05/17/reserve-auction-needs-reserves/.

The unfortunate misunderstanding here is … when a seller is motivated and ready to sell, that same seller can benefit from an absolute auction — which attracts far more bidders and higher prices. Selling well over 2,000 real properties at auction taught us this …

There are indeed some auctioneers not familiar with absolute auctions — and/or possibly don’t completely believe in auction marketing. Interestingly, there are even auctioneers who tell their sellers the auction is absolute but do not advertise it as such …

Here is our article on that subject of “absolute” for the seller, but not the bidders/buyers, which qualifies as completely nonsensical and a breach of duty: https://mikebrandlyauctioneer.wordpress.com/2019/02/22/is-your-absolute-auction-being-advertised-conducted-as-such/.

Another issue with “seller confirmation” auctions is often the auctioneer tells the seller “We’ll see what the market says, and then make a decision.” Yet, if this particular auction is advertised as “subject to confirmation” you nor your seller are actually “seeing the market.” https://mikebrandlyauctioneer.wordpress.com/2022/06/27/your-seller-seeing-the-market/.

There is no question that absolute auctions produce larger bidder pools and thus higher prices. https://mikebrandlyauctioneer.wordpress.com/2018/03/12/what-drives-bidders-to-an-auction/. Of course, auctioneers advertise their absolute auctions as “with reserve” all the time to get bigger crowds, right? Of course not.

If you have a seller with the right mindset and circumstances and sell “subject to seller’s confirmation” you’re not maximizing price like you should be — and/or maybe not understanding the power of absolute auctions? It’s important to use the correct methodology for the job at hand.

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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