Auctions for Dummies

The Official Beginner’s Guide to Auctions

Take a copy home FREE (you get what you pay for)

1. You failed to enjoy a beverage or auction staple hotdog from the lunch wagon; never a good thing to forget.
2. Hightailing it home is not good. When a mistake is made by either yourself or the Auctioneer, please bring it to the attention of the staff as soon as possible. Mistakes happen at every auction, and most Auctioneers just want to get as much correct as possible.
3. Running that far in that heat could cause health problems.
4. Always remember your bidder number, and what’s with the hat?
5. Come back soon, auctions are fun!
6. If after all this, you do decide to employ some clandestine bidding technique, i.e. blinking an eye or wiggling an ear, please let someone on the auction staff know this prior to the auction.

Situation #2 Mistakes:

1. Always understand what item an Auctioneer is selling and exactly what you are bidding on. Listen for terms such as “Choice Out” or “So much apiece times six.” Understanding what and how an item is being sold is paramount. You got a great juicer, and a pretty fair story, but unfortunately, no highboy.
2. Beverage?

Situation #3 Mistakes:

1. Many novice auction buyers often fear bidding against “dealers”. You have to realize that a knowledgeable dealer is buying at a price where they feel they can sell that item for a profit. Therefore, if you bid slightly higher then most dealers, you can purchase that item at a substantial discount to the price that the dealer intended to sell the item at in a mall or show. Many times, at an auction, it seems that the “dealers” are paying high prices and purchasing all of the expensive items at that sale. In truth, these “expensive” items usually have the most profit left in their selling prices. Smart dealers will only purchase items that they can see a profit in, and won’t take a chance on non-profitable items. 98% of the people at an auction understand that the nice restored ice box is a bargain at $225, but only a few realize that the $7,200 painting that just sold could retail for $80,000. Which is the bigger bargain, now?
2. Beverage? Hotdog? Come on, I’m starving here.

• “Expert” opinions.A person purported to be an expert (possibly even the “President” of a local clock collector’s club) is at an auction examining a clock when you overhear him say loudly to his “clock-a-doo” pal “This clock is a mess. The movement is from a grandfather clock and the case is from a Cuckoo clock. I wouldn’t give $10 for it,” and about an hour later you notice the same gentleman bidding $1,750 on the very same clock. It is very common for a spurious purchaser to run down the merits of an item in order to scare away other potential Bidders. You can hear this being done at almost every auction. An oriental rug “expert” might publicly mention that the rug you are looking at may have been subjected to a herd of non-housebroken puppies. An Art Glass “expert” may claim a Tiffany signature is not correct. It is always best to study the items that you intend to bid on for yourself, and not rely on “free advice” (or not) from supposed “experts” (or not).
• Bid speed.A Bidder intentionally slows down the bidding in an attempt to make you think an item may have reached its maximum value. A Bidder may also attempt to cut a bid increase in order to make you feel the bidding is already too high on an item. It is always best to learn values for yourself and not get fooled by another bidder trying to deflect your attention from a perfectly good item. This trick is occasionally done in reverse, when a Bidder will speed up their bidding in an attempt to make other Bidders think that they will pay any price for that item.
• Attempting to misrepresent.As an Auctioneer is describing the next item for sale, an elderly gentleman stands up and loudly asks “Is that the one with the large crack in the side?” (knowing full well the item is in pristine condition). This is another situation where an interested Bidder is attempting to deflect interest in an item so that he may purchase it at a lower price. Look over all items prior to placing a bid so as not to bid too high or even too low on that item.
• Leers, dirty looks, and intimidation attempts. Another common ploy is to try and frighten away potential bidding competition. I’ve seen bidders go as far as to stand up from their seats and turn to leer at a person bidding against them at an auction. I guess, occasionally, it may even work, to some extent.

Common Auctioneers Tricks

• Fictional advertising copy.The single, most often complaint we hear is from customers who drive a long distance to an auction, only to discover that the item they are pursuing is mis-described or worse yet, not even at the auction. This, and most other Auctioneer tricks can quickly be dealt with by avoiding future auctions by that Auctioneer.Find an Auctioneer who you trust and like, and attend their auctions. Auctions can be an educational experience for both you and the Auctioneer, at times. Take advantage of the knowledge that experienced Auctioneers are usually happy to share with you.
• Looks Like.Beware of the phrase “looks like”. “Looks like Walnut,” “Looks like Steuben”, “Looks like an early piece”, “Looks like Fenton”, “Looks Continental,” can all be misleading. Sometimes it’s intentional; sometimes it’s just an offer of an opinion, so don’t bank on it. Also the variation “looks good from here” should be questioned.
• Bid speed, skipped bids. Many auctioneers think they are in control at an auction, when in reality, the Bidders are actually the ones with the upper hand. An Auctioneer may try to control things by speeding up the bidding and creating an “Auction Fever” type of situation, or slow down the bidding to create an air of importance to the item being sold. Some auctioneers seem to take forever to say SOLD, eking out the last dime, and others say SOLDso quickly, you can barely get your hand up. An old-timers’ trick was to “skip” a bid, by inserting a fictional bid in between two actual Bidders. Some Auctioneers would employ “phantom” Bidders to push up a price. These types of activities are now illegal and the various Auctioneers Associations have also strived to regulate conduct among their membership.
• Other tricks of the trade. Auctioneers are part salesman, part educator, part entertainer, and sometimes part horse thief. I usually try to avoid the latter; however, greater knowledge can often foil their attempts at larceny. I have seen Auctioneers humor their audience into higher bids and I have also seen Auctioneers attempt to berate Bidders into raises; and a few others just plain beg. Some Auctioneers even speak in some unintelligible language in an attempt to confuse the Bidder. Thankfully, most Auctioneers are a relatively likeable bunch, who are only working hard to assist in public transactions between Sellers and Buyers.

Have fun at the Auction, and don’t forget to wave at the Auctioneer!

GLOSSARY

Auction

The actual event. The offering for sale of goods in a competitive bidding environment.

Bid

The offer to pay a specific amount for a particular item.

Bidder

Our favorite person in the whole world! Grandpa Schmidt once claimed to have conducted an auction during the depression with only one Bidder!

SOLD

The word an Auctioneer states to declare the acceptance of a final bid on an item.

Antique Auction

An auction offering antiques for sale from one or more individuals.

Estate Auction

An auction offering the contents of a single individual’s estate. While this type of auction has traditionally involved items from a deceased individual’s home or collection, modern usage has evolved into the term “Living Estate” which, of course, means that the owner is still among us.

Consignment Auction

An auction offering items from multiple owners, of undetermined age (the items that is, but I suppose it could be the consignors themselves).

Unreserved Auction

An auction offering goods to be sold to the highest Bidder, regardless of price. Many galleries and auction houses have minimum or “Reserved” bids, which set a minimum starting price for each item. This term can have different legal implications depending on the laws in each State. However, this is the practical definition.

Schmidt’s in Ypsilanti

Your source for great auctions in this area. Established in 1911 and conducting monthly auctions ever since. We are currently featuring a series of auctions we call “Schmidt’s Friday Nights”, a monthly consignment auction of mid-range antiques and select collectables on the 4th Friday of each month. These sales have NO BUYER’S PREMIUM, no minimums, and no reserves. Sort of like a high speed consignment shop with 400-500 new items every month. Call (734) 434-2660 for more information or for a free consultation of your auction needs. We sell antiques, estates, real estate, and collections.

AS IS

This is how 99% of merchandise is sold at auction, today. AS IS simply means that you are bidding and buying the item in the condition in which it is presented. As most auction merchandise is antique, used, or second hand, some wear or minor damage is inherent to the items and should be taken into consideration when bidding. Buyers should always act with due diligence and examine all items thoroughly, prior to placing a bid. There are usually no returns on items purchased at auction.

 

Absentee Bid

A bid which is left on an item by a Bidder who is not able to physically attend the auction. These bids are usually made by a member of the auction staff on the Bidder’s behalf. Other ways for a Buyer to bid when the auction cannot be attended, is via “Phone Bidding” and “On-line Bidding”. However, these are not always available.

Hammer Price

The final bid or the top price offered when the Auctioneer says “SOLD” is referred to as the “Hammer Price”.

Auction Fever

Any internal human temperature above 98.6o, brought on by the desire to purchase a particular item being offered at auction. Symptoms include: clammy hands, light-headedness, and uncontrollable bidding on that item. The only known cure is to take the item home, at any price.

Buyer’s Premium

This is a fee that is added to the “Hammer Price” of an item; usually 10% or 15%, to make up for a reduced Seller’s commission. More often, Consignors are negotiating their Seller’s commission and Auctioneers are forced to make up for these reductions with a “Buyer’s Premium”. Be aware that some Buyer’s will not attend an auction with a “Buyer’s Premium”, so that, in effect, cuts down your competition at that auction. In our experience, it really makes very little difference in the Consignor’s net proceeds. A savvy Buyer will simply lower his high bid in the amount of the “Buyer’s Premium” and the Consignor ends up with the same net result.

Choice Out

When a group of usually similar items are offered at the choice of the final Bidder. “Choice Out” means that the successful Bidder can choose how many of the items they wish to purchase at the final bid per item selected.

Mulligan

This term is not relevant to an auction situation. This is a term used by golfers who wish to make another attempt at a shot. Unfortunately, there are no second attempts at an auction. You must buy the item that day. When the Auctioneer says “SOLD”, it’s too late for you to reconsider.

Auctioneer

The person who “Calls” the bids and whose decision designates the winning Bidder.

Ring Man or Floor Man

A person who assists the Auctioneer in presenting items and spotting Bidders during an auction. Make friends with a floor person as they are your direct link to an Auctioneer during an auction and can help relay your bids to an Auctioneer.

Raised Bid or “Bump”

A situation when a Bidder makes a bid higher than the increment the Auctioneer is requesting. This is sometimes done to intimidate other Bidders. A responsible Auctioneer will protect a raise and require that the next bid be similar to the raise. Example: Bidding is proceeding at $25 increments, $200, $225, $250, $275, $300, and then a Bidder says $350 when asked for $325. This $50 raise will usually be protected and the following bids will be $400, and $450.

Cut Bid

This is sometimes indicated by a wave of the hand in a horizontal chopping motion. At Schmidt’s, we will never sell out a Bidder’s trust by accepting a lower raise, so bid with confidence. If you are the guy with the unusual horizontal wave, Hi, back atcha!

Consignor

A person, estate, or entity who contracts an Auctioneer to sell items in an auction on their behalf.

Commission

A fee paid by a Consignor to an Auctioneer for selling goods at auction.

Antique

Now here is a tough one. U S Customs say an antique is an item that is 100 or more years old. Grandpa Schmidt said it was a non-factory made item that is at least 100 years old and made during the period of its design. This eliminates so called “Centennial” furniture and even factory produced Victorian furniture made at the time of the Civil War. Many auction buyers’ today believe that an “antique” is anything that once belonged to their grandmother. Pick your own definition, and stick to it.

Auction Exchange

A weekly “Bible” of auction activity in our area. Get your copy at: The Auction Exchange, 27 North Jefferson Street, PO Box 90, Knightstown, Indiana, 46148-9900. Or call (888) 339-3795.

 

Auction Zip

The newest way to obtain updated information on auctions around the country. Go to www.auctionzip.com  (If you are confused on how to go there, it’s one of those computer things). You can search for auctions by date, location, and even for specific items. Enter the Auctioneer Number “6424” at the top right of the home page to see dates, photos, and descriptions of all our upcoming auctions. Simply fill out the mailing list form if you would like to receive periodic updates.