Editor’s note: The National Auctioneers Association encourages its members to use this message in their public relations and marketing efforts. Please contact Chris Longly, deputy executive director, at email@example.com for an electronic version of this article.
On the lawn or online, auctions are taking place in communities large and small across the country, with more than a quarter-trillion dollars in assets and goods being sold via auction every year in the U.S. One of history’s oldest forms of commerce, dating back more than 2,000 years, auctions continue to be the quickest and the most effective means of price discovery today.
However, auctions continue to be plagued with misconceptions in today’s marketplace. Auctioneers are far more than just fast talkers. We’ve heard it before from naysayers who say, “Selling at auction is selling at a discount.” We’ve also heard the rumors that auctions “only exist for selling distressed property” and “only junk is sold at auction.”
As unfortunate as these rumors are, what concerns our proud auction professionals the most is that no one questions the market value attained when rare, one-of-a-kind works of art are sold for millions of dollars at auction. No one doubts the prices achieved when luxury homes are sold at auction. No one questions the method when celebrities sell their personal items at auction. However, the mere mention of selling homes, commercial property and other assets through the competitive bidding of an auction creates immediate doubt and uncertainty.
Auctions force buyers to be decisive
The auction process is straight forward, but perception often clouds reality. An auction is simply a public marketplace where items or property are sold through competitive bidding with the highest bid winning the rights to own. Only at an auction will the marketplace (buyers) tell you what they are willing to pay — no more, no less. If it is perceived as being of more value, competition continues. If the maximum value has been met, bidding ends.
Auctions ultimately force buyers to be decisive. While auctions are used to dispose of distressed assets, most people fail to understand why assets are sold at auction. Auctions provide the speed and efficiency needed to complete transactions while returning the highest dollar value. The “For Sale” sign languishing in the yard today does not force or motivate buyers to purchase. The sign will be there tomorrow and most likely the day after, but with an auction a sign will not be posted after auction day.
Auctioneers are more than fast talkers
When you hear the word “Auctioneer,” the quick, rhythmic cadence of an Auctioneer’s trademark bid call generally comes to mind. The bid call has become synonymous with auctioneering. However, talking fast isn’t the primary and most important skill of an Auctioneer. Auctioneers are business professionals who are marketing specialists, strategic asset disposition experts and experienced problem solvers. Auction professionals use their extensive product and industry knowledge paired with their network of buyers and new technology to promote and sell assets.
2,000 years and counting
Whether it is luxury, everyday or troubled assets, the auction method of marketing continues to be successful after 2,000 years of practice. In today’s marketplace, auction professionals still offer their services and help consumers market and sell their assets to an audience of interested buyers.
In fact, every day hundreds of auctions occur that do not involve distressed assets or troubled owners. Instead, professional Auctioneers are called upon to help homeowners quickly sell their properties, seniors downsize their homes, companies liquidate their surplus equipment or sell intellectual property, art enthusiasts discover the perfect work for their collection, or antique collectors find the next coveted piece for their collections.
Sold on auctions
For centuries, Auctioneers have been connecting buyers and sellers in both strong and weak economies. The auction industry in the U.S. will continue to offer its services to those in need during these troubled times. However, we eagerly await the return of brighter financial and economic times when asset and property values rebound and when more buyers return to auctions to compete for the items they want to buy. When this day comes and marketplaces such as real estate transform from a “buyer’s market” with limited demand and excess supply to a competitive “seller’s market” with limited supply and increased demand, we will be here.
When this day comes, you wouldn’t accept the first offer you receive, would you?
No, you will want an auction!