Auctions . . . Important Tips

Inspect The Item Before you Starting Bidding

How do you know that the item(s) you are buy at an auction is actually a bargain? By inspecting any merchandise you intend to bid on beforehand and by doing a little research. Let’s say you’re looking for computers, but you know very little about computers, you would be wise to get out the phone book, turn to the yellow pages and start calling computer dealers. You might have to spend a couple of days doing this, but the payoff will come when you save big dollars simply because you did some research before bidding. Everything that’s sold at an auction is not a bargain, and it‘s never a bargain if you paid too much for the item.

Most auctions allow bidders to examine items going up for bid prior to the auction and you definitely want to take advantage of this. Arrive early and thoroughly inspect any item(s) on which you intend to bid. Remember - all sales are final. Whatever you buy at an auction cannot be returned. All items are sold “as is.”

Research First . . . make sure you know how much to pay for the item

There are many ways to research the items you want to buy. For example, if you’re planning to buy a car at auction, you might want to visit a few car lots. Compare prices. Take test drives. Pick up a copy of your local Auto Trader. Be certain to get an NADA Blue Book or Yellow Book. If you can’t find one at a newsstand or bookstore, check your local library. You will want to know the Blue Book value of any car you plan to purchase; and, when you buy a car at auction, you want to pay the wholesale price. If you pay the retail price, you might just as well go to a dealer. Depending on the age of the auto, there may be a warranty still in existence, and many dealers will offer extended warranties—something you won’t get at the auction. Your best bet when buying a car at auction is to bring someone with you who knows automobiles, perhaps a friend or neighbor with mechanical skills. Paying a friend or neighbor a few dollars to go to the auction with you could be the smartest move you’ll make. What you’ll pay them could be minor in comparison to what you might lose if you buy a lemon. When you’re inspecting a car, be certain to have one of the auctioneer’s assistants start the car for you. Observe closely, listen closely and inspect closely.

Boats/Airplanes: The same rules apply to the purchase of a boat, airplane or any big ticket item you intend to bid on at auction. If you’re not an expert, find and consult one. One very good source is Consumer Reports. It’s available on most newsstands, and computer types who are also members of Compuserve can access Consumer Reports on-line. For electronics, you may want to contact Orion Research Corporation at and, for art items, you could pick up a copy of Art & Auction magazine. It’s published monthly and available at most newsstands. If your interest is in computers, be aware that computer technology changes rapidly. Unless you’re an expert, or know one, you need to exercise caution or you may find yourself the owner of equipment that no one wants.

The bottom line is, be certain to inspect before you bid. Most people who are new to the auction scene will not inspect and therefore leave themselves wide open to loss. Most auctions provide time before the auction to inspect the merchandise. If you should attend an auction that does not allow you to inspect the item you wish to bid one, just get back in your car and go home, it's not worth the risk.

Don’t Lose Control

Auctions are fun, and it’s easy for people to get caught up in the excitement and end up buying something they had no use for, or paying too much because the auctioneer noticed their excitement and took advantage of it. If you’re attending an annual auction at your church, where it’s unlikely you’ll spend much for any of the items bid, you need not be so careful. But, if you’re attending the auction of a piece of real estate, you need to keep your emotions in check. Don’t get caught up in the moment and do something you’ll regret later. I’ve noticed people behave irrationally at auctions very much like a gambler out of control. Unlike the gambler, however, instead of losing everything but the kitchen sink, the person who gets carried away at an auction can find himself carrying home the kitchen sink, even though he might not have wanted a kitchen sink.

Have a Plan

Before you go to an auction, know what you want, how much you plan to spend, and stick to the plan. If you’re attending an auction where you are looking for something to resell and don’t have any particular item in mind, set a spending limit and stick to it.

Get There Early

Remember, you want enough time before the auction starts to inspect items on which you want to bid. You also want to get a good seat near the front. Professional auctioneers speak very rapidly and, if you’re sitting in the back, you’re more apt to misunderstand or not be able to hear the proceedings. This could cause you to miss out on an exceptionally good buy. If the auction is to be held in an area with which you’re not familiar, you may want to scout the area a few days before the auction, just to make certain you’ll be able to find it without any trouble.

Ask Questions

Because auctioneers typically speak fast, it’s easy to miss something. If you’re bidding on something and you’re not certain what the last bid was, speak up. The auctioneer won’t mind and you’ll eliminate the chance of missing a bargain or getting stuck with something you didn’t want.

Types of Auctions

If you plan to be doing a lot of buying through auctions, you’ll need to be familiar with the different types of auctions and how they work. There are five basic types. They are:

• Public Auction—an auction where everyone is invited to attend. The auctioneer calls out the bids and an item is sold at the highest bid.
• Private Auction—the same as a public auction except that attendees have been invited and the general public is not invited. An example might be a coin club auction for members, held at the same time they hold their club meeting.
• Negotiated Sales Auction—with this type of auction, bids are taken away from the auction site prior to the actual auction.
• Sealed Bid Auction—these auctions are conducted by mail. You mail in your bid, the highest bidder wins, and results are usually mailed to the bidders.
• Spot Bid Auction—like a Sealed Bid auction except that you attend the auction. Individual bids are handed to the auctioneer by participating bidders. The auctioneer will go through all of the bids and announce the winner—the highest bidder.

The following government agencies conduct auctions:

• Police Auctions
• City, State and County Auctions
• Estate & Bankruptcy Auctions
• United States Government Auctions

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