Bid calling matters

Mike Brandly, Auctioneer Blog

mikebidcallingMost of the very successful and highly paid auctioneers in the country are paid for one thing: Bid calling.

High-level bid calling encompasses many disciplines in addition to a rhythmic, smooth, fast, mesmerizing chant; crowd control, humor, accuracy, timing, wit, legal compliance, ethics and political correctness are also important.

And those very good at it get paid very well.

This type of work is considered within the auction industry as “contract auctioneer” work — and casually referred to as “bringing in a hired gun,” traced from early references to mercenaries.

For centuries, contract auctioneers have been paid a premium due to their enhanced bid calling skills. Even with the onset of auctions requiring no bid calling at all, these hired guns are highly sought after, and compensated handsomely.

For instance, a highly regarded auctioneer might be paid travel, hotel, meals and incidentals in addition to an hourly bid calling wage…

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Must auctioneer sell him that gun?

Mike Brandly, Auctioneer Blog

As the demand for guns remains strong, auctioneers selling guns are under heightened scrutiny regarding proper procedures and licensing. We wrote about auctioneers selling guns here: http://mikebrandlyauctioneer.wordpress.com/2010/01/17/a-guide-for-auctioneers-selling-guns/ which has been widely accepted as accurate guidance for auctioneers.

Our question here regards, must an auctioneer sell a gun to a buyer in light of a “proceed” from the ATF? In processing background checks, the ATF will issue a licensee a “proceed,” “delay” or deny” answer. According to the ATF, these are the actions in regard to those answers:

    NICS RESPONSES: If NICS provides a “proceed” response, the transaction may proceed. If NICS provides a “denied” response, the seller is prohibited from transferring the firearm to the buyer. If NICS provides a “delayed” response, the seller is prohibited from transferring the firearm unless 3 business days have elapsed and, prior to the transfer, NICS has not advised the seller that the buyer’s…

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Unjust enrichment at auction?

Have you ever found that surprise in a dresser drawer? Or maybe the surprise was the dresser?

Mike Brandly, Auctioneer Blog

It seems every so often a story makes the news such as this:

    The buyer found over $40,000 in $100 bills taped under the third drawer of the mahogany chest he recently purchased at auction. Quite a find considering he only paid $175 for the chest.

In cases such as the aforementioned, what apparently occurs is an item such as a chest of drawers is offered at auction. The buyer takes the chest home, where he finds money, diamonds, or other items of value inside the chest. The issue then involves, does the buyer have title to the money, diamonds or whatever else was inside the chest of drawers, or just the chest of drawers itself?

Of course, the item being sold could be one of a wide variety of items, such as a car, virtually any type of furniture, clothing, boxes, cabinets, or even real property — where other…

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Selling for less than the reserve?

Mike Brandly, Auctioneer Blog

Auctions in the United States are, by default, with reserve, meaning that the seller may accept or reject the highest bid received, and/or place a reserve amount (a minimum amount) on their item(s) dictating the auctioneer not sell them for any less.

Yet, some auctioneers sell items for less than these reserve amounts. How can this happen? How it was explained to me was that if the bid reaches an amount near the reserve (or even if it doesn’t,) the auctioneer can decide, unilaterally, to sell the item for less than the reserve, but make the consignor whole by reducing their commission, and/or making up any deficit. An example may be in order:

Julie has consigned an ornate fern stand to an auction house. The stand is possibly over 200 years old, and is quite fancy. Julie wants to sell this fern stand only if the high bid is $2,000…

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Auctioneer looking for Alpha and Beta

Mike Brandly, Auctioneer Blog

A somewhat philosophical and mathematical observation about auctions.  Let’s start with a few premises:

  • We are considering the selling at auction of one (1) item
  • By definition, Alpha is a bidder willing to pay more than anyone else, anywhere, for this one item. Beta is the runner-up bidder, willing to pay more than anyone else, anywhere, except for Alpha
  • Anytime an auctioneer is selling 1 item, or any item, the last two bidders are the only two bidders needed — as they are, by definition, the final bidder and the bidder just before. If they are Alpha and Beta, no other bidders, anywhere, would be needed
  • If there are other bidders present, such as Theta, Gamma, Delta, Omicron, etc., they really are unnecessary, as Alpha and Beta want this item more than any of them do
  • No matter if we had just Alpha and Beta, or Alpha and Beta and…

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Auction seller won’t agree to the sale

Mike Brandly, Auctioneer Blog

This does happen also, but not nearly as often as a buyer not performing. What we have in this case is a seller who, after the auctioneer says, “Sold!” doesn’t want to allow transfer of title — doesn’t want to agree to the sale.

Let’s discuss, first, when a seller can withdraw an item from an auction without recourse. In the two types of auctions per the UCC 2-328:

  • With reserve: The seller may withdraw the item from the auction anytime up until the announcement of “Sold!”
  • Without reserve: The seller may withdraw the item prior to the opening solicitation for bids, or may withdraw the item if after that solicitation, no bid is received within a “reasonable time.”

What we now want to discuss here in more detail is what happens when a seller wants to cancel or otherwise won’t agree to the sale by auction, outside of…

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Does bid calling form contracts?

Mike Brandly, Auctioneer Blog

Auctioneers enter their sellers (clients) into contracts with buyers (customers) when bid calling.

When an auctioneer says, “I have $10, and I’d like $15,” he is stating that he currently has his seller in contract with a particular bidder at $10 for the item being sold, and is asking to get out of that contract with a higher bid.

If there is no higher bid, then the item is typically sold for the $10.

What legally is going on when an auctioneer is bid calling? Let’s take a look at the two types of auctions:

1. A without reserve auction:

In this type of auction, a collateral contract is formed between the seller and all the bidders, agreeing to sell the item without reserve. Then, the auctioneer asks for bids from his audience (invites the bidders to bid) and once he accepts a bid, say $10, then there is a…

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