Discover Auctions

by “America’s Auctioneer” Larry Makowski, CAI, AARE, CES

Auctions are interesting, “people” events — and have been for centuries. In fact, it’s hard to imagine anything that is not sold at auction. Livestock, automobiles, real estate, antiques — you name it, and auctioneers have successfully sold it.

Auctions are as modern as tomorrow’s computer, yet as old as mankind. Recorded history describes auctions in 500 BC, and later during the Roman Empire. The “Oxford English Dictionary” of 1595 is the earliest English reference to the auction. And everything has been selling well at auction ever since.

The most widely recognized talent of the auctioneer is undoubtedly his or her ability to “talk fast.”

The rhythmic chant, developed over the decades as a means of creating excitement and moving the sale of property at a steady pace, is certainly the attention getter on auction day. But the success of an auctioneer depends upon many other factors.

The professional auctioneer is first a foremost a marketing specialist. In order to best serve clients, the auctioneer must have a working knowledge of the value of the items being offered. The auctioneer must know how to use advertising to attract the people most interested in you property. That stimulates competition, thus securing the best possible results for the seller. Professional auctioneers are also versed in the Uniform Commercial Code, and, they are experts in the psychology of selling.

The auctioneer wants the seller to be satisfied with the final bids received. At an “absolute” auction, each item goes to the highest bidder regardless of the bidding price, but — if the seller requires it — there are alternative methods by which his or her interests can be further protected.

With real estate, for example, the property may be advertised “to sell — subject to owner confirmation.” This means the seller has the right to accept or reject the final bid. The seller may also choose to sell the property “with reserve.” Here an item is identified as being offered with reserve, and the amount of the reserve is clearly stated. These techniques protect the seller, but they are also fair to bidders because they are fully explained before the auction gets underway.

When you arrive at the auction site, register for a bidder number and read the rules printed on it or displayed on posters. Ask questions if you don’t understand a policy.

Inspect the merchandise carefully, as most is sold on an “as is — where is” basis. This means it is not guaranteed. When you buy an item, you become responsible for it. And you must pay for everything you’ve purchased before leaving the site, even if you aren’t taking everything with you that day.

You’ve all heard the old story about the fellow who attended an auction, scratched his nose and came home with an item he hadn’t intended to buy. Well, don’t be frightened away by such tales. The auctioneer realized when you are bidding and when you are not.

In order to bid at an auction, you need to make contact with the auctioneer or the ringperson. To do this, hold up your bidder card, your hand, or shout “yes.” The auctioneer will make eye contact with you, take your bid and immediately turn and seek another bid. You may remove yourself from the process at any point shaking your head “no.” And, should the auctioneer misinterpret your signal, simply report the mistake right away.

The rapid-fire chant of the auctioneer, though a familiar sound throughout the land, remains a mystery to many. In simplest terms, the chant is merely a series of numbers connected by “filler” words to give the buyer time to think between bids. Rhythm is as important as speed in developing an effective chant, but nothing is more vital than clarity. Auctioneers will adjust their speed, depending on the bidding experience level of their crowd. The numbers in a good chant will be easily understood. The auction method of marketing has proved an effective price-setting mechanism that takes into account current market variables.

That’s true for whatever commodity is being sold. The pricing of such raw materials as grain, tobacco and wool is directly tied to the auction block, yet the auctioneer’s gavel also helps establish the value of more glamorous commodities such as fine art, antiques and classic automobiles.

The objectivity and fairness of a well-run auction is often favored by the courts to carry out their decrees and by executors and trustees to help fulfill their responsibilities. The legal presumption is that a public auction of property to the highest bidder is a sale among disinterested third parties.

At an auction, buyers get exactly what they want, and at a cost of only one bid higher than someone else was willing to pay! The auction.

Whether you are a seller or a buyer, it’s your best alternative!

2,500 YEARS OLD AND STILL GROWING.

Auctions Remain an Effective Sales Technique

Exactly where and when they began, nobody knows.

But history shows that auctions are at least 2,500 years old.

And the way they are increasing in popularity, they’ll be around at least that much longer

The Greek historian Herodotus provides the earliest documentation of auctions. In the first book of his histories, he wrote about a visit to Babylon around 500 BCE. There he witnessed the annual bridal auctions, which bachelors would bid on marriageable women. Bidding started high, especially for the most attractive candidates. Once the high price was established, bidders started lowering their bids until one of them accepted the woman involved. When it came to the least attractive women, bidders were actually offered increasingly higher dowries to accept a bride.

The Roman Way In ancient Rome, auctions gradually evolved from a way to sell slaves and the spoils of war into a form of commercial trade — and even into a fiscal policy. Selling slaves, furniture and other possessions to the highest bidder was a common practice in the ancient world as a means of raising money quickly. In the Roman army, auctioning the spoils of war was an especially important way to raise cash. So soldiers victorious in battle would drive a spear in the ground — sometimes even on the battlefield — to signal a sale and dispose of their victim’s possessions in a quick, informal auction.

As the empire grew and spoils increased, the auction process became more formalized. Auctioneers were licensed and required to collect a 2% tax on all auction purchases. The practice of placing the possessions of a captured village on a big rock (the “auction block”) gave way to holding an auction in a dedicated space, the auction site, where bidders could preview the merchandise to be sold. An auctioneer typically organized and perhaps financed the sale on behalf of the dominus or client. And the praeco advertised the auction and conducted the bidding.

Auctions became so widespread in Rome that the Emperor Caligula used them to make up for the deficit created when he abolished some forms of taxes. In addition to selling gladiators and excess government property, he even sold his sister’s possessions in Gaul to raise need cash. The Emperor Trajan took this a step further and used government auctions effectively to balance the budget and rebuild Rome after it burnt under Nero. Similarly, Marcus Aurelius used auctions to pay off his war debts.

The Renaissance of Auctions

After Rome fell in the Fifth Century CE, civilized commerce declined, and auctions were for the most part held only to trade slaves. Around 1100, however, merchants from the Mediterranean began to trade with India and the East. When their ships returned home, they would use auctions to quickly sell the goods and repay the impatient moneylenders who financed the voyages.

As commerce grew, so did auctions. By the thirteenth century, Henry VII in England promulgated a law prohibiting unlicensed persons from selling goods or merchandise “by public outcry.” By 1595, the word “auction” was in the Oxford English Dictionary.

In the 1600s, auctions became economically more important. In Holland, they reached a feverish pitch between 1633 and 1637, when prices offered at tulip auctions became so ridiculously high they almost ruined the country. In London, the earliest recorded auction sale of paintings took place in 1674. By 1680, auctions of books and pictures there were common, as was usage of the term public auction to describe a sale “by way of public outcry.”

Many English auctions during this period took place in coffee houses and city inns, and several auctioneers, such as Richard Thompson, Edward Davis Ferdinando Verryck and Samuel Smith, became quite famous for their flamboyant styles. By the mid-1700s, auctions were common in England as a way of disposing of assets — including land — in estate and bankruptcy sales. On the continent, auction rooms were opened during the 1700s in many countries. Around 1712 a Frenchman, Pierre Antoine Matteux, was the first to establish the general auction, offering various types of goods at a single sale.

Auctions in America

In the English colonies, auctions served several purposes, ranging from the sale of delinquent property for settling debts to trading furs, tobacco, clapboard and even slaves. As the nation expanded, early settlers in New England often auctioned off the property they could not take with them as they moved westward. These different uses established auctions as an important economic tool.

In fact, auction sales of real estate have more than quadrupled since 1980 and are expected to account for 30% of all real estate sales within the next 5 years.

During the Civil War, auctions unfortunately got the reputation of being a means of capitalizing on the property seized in the South. In addition, the immigrants flooding into the country in the late 1800s brought with them many items, some of which they would auction off as soon as they arrived in New York to raise money for living in America. This greatly increased the demand for auctions, but also led to considerable fraud, misrepresentation and other abuses.

Fortunately, the American Centennial exhibition in Philadelphia in 1876 stimulated an interest in antiques and in auctions as a way to sell them. This helped to establish auctions as a legitimate and appropriate way to determine the market price for items that were otherwise difficult to value. By the mid-1920s, antique auctions had become not just socially acceptable, but an upscale activity that blended theatre with the cachet of social distinction and economic achievement. In the countryside, livestock and grain auctions blended similar excitement and fun with a sense of market fairness and validation.

Today, auctions are more widespread, accepted and professional than ever. In addition to their traditional uses for estate and bankruptcy sales, or for selling commodities, art and antiques, auctions are increasingly recognized as an effective means of selling real estate or other property when the owners are not distressed. In fact, auction sales of real estate have more than quadrupled since 1980 and are expected to account for 30% of all real estate sales within the next 5 years.

Auctions are now used to sell everything from industrial machinery and government surplus to cars, jewelry and even the record-setting home run balls hit by Sammy Sosa and Mark McGwire. New online auction sites offer even more opportunities to participate. So if you haven’t yet made use of this historically proven sales technique, there’s no better time than the present. Please call us to find out more about how auctions can be an effective sales tool for you and your clients.

“America’s Auctioneer” Larry Makowski, inventer, innovator of the “Express Auction” method has been a steadfast and trusted auction authority for over 20 years.

Corporate Office: 3646 Falls Road Baltimore, MD 21211
Main 410-243-9999     Fax 410-243-1256
MAP