Auctions – Going, Going, Gone!
Generally, prospective bidders have the opportunity to inspect the goods before an auction takes place. For instance, arrangements can be made for the managing agent to escort them around a property so that they can assess exactly what they might be buying and how far they are prepared to go to secure it. During this viewing, price will no doubt be discussed, perhaps an offer made which is sufficiently attractive to pass on to the owner who may choose to accept on the spot rather than risk the final bid at the forthcoming auction falling short of expectations. I would imagine it will cost the seller to withdraw, but a done deal is often better than a maybe, even if a penalty fee eats into the net profit. When a number of different items or lots are to go under the hammer, there is often the chance to look over them prior to auction day. Obviously, buyers need to know something about whatever they intend to bid for. It would be folly to pay more at auction than the normal market price. Anyone bidding based on looks alone while knowing nothing about what makes a particular item more valuable than another example which seems pretty similar, that person is asking for trouble.
It is always best to go in armed with as much pertinent information as possible. For items such as building materials, spare parts, white goods, anything in fact, doing the rounds of the stores and some online research can be invaluable. Check the average retail prices from a few sources – if you can buy lumber direct from the yard for $200, why would you bid $250 for the same stack at auction? The prices of antiques and artwork, unfortunately, can’t be as specific. These tend to be valued subjectively and any enquiries of regular dealers, even experts, are only likely to be ball-park; but a little knowledge is better than none. With properties, it is advisable to take along someone who knows enough to judge whether they are worth the likely asking price; for vehicles, a mechanic would be a good idea. Never go in unprepared.
Finally, it is all-too easy to get caught up in the heady euphoria of a bidding war. Set your sights on acquiring what you want, but for a realistic price that fits your budget. Calculate beforehand how high you can afford to go and don’t exceed that figure, especially when you suspect that a ring-in is bidding over you.
For an observer, auctions can seem like a game and a lot of harmless fun; but it’s not their money that is being tossed into the ring!
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