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AUCTION TERMS
Auction
Sale:
A sale where goods are put up for sale to the highest bidder. An
Auction Sale is a bidders opportunity to buy what they want at a
price that they have determined is fair for the item they are
bidding on. A bidder is responsible for determining the quality and
condition of an item they intend to buy prior to bidding. A bidder
must take many factors into consideration when forming an opinion of
value, these factors should include applicable taxes, and buyers
premium if in effect. An Auction Sale exposes goods for sale to many
potential buyers in a set time frame, thus achieving Fair Market
Value.
Fair
Market Value:
Fair Market
Value is defined as being achieved at a sale when neither buyer nor
seller is under undue pressure to complete a sale. An Auction Sale
is one of the best methods for determining what Fair Market Value
is.
Reserved Auction:
A reserved Auction occurs when an item has been protected by its
owner so that the item may not be sold below a set price. Reserve
bids are sometimes put on a specialty items, or valuable items when
the owner is concerned that the value might not be achieved in the
market place where it is being offered. Usually an Auctioneer will
not accept an item for sale if the sellers reserve is unrealistic.
Reserved bids are uncommon on household items. According to the
Canada Goods for Sale Act every item in an Auction Sale is
considered to have a reserve bid unless the sale is advertised as
unreserved. At an unreserved Auction it is illegal for the owner or
his/her agent to bid on their property consigned for sale.
Absentee Bids: Are becoming quite common today with the use of the internet for advertising Auction items. An absentee bidder can be from anywhere in the world. The bidder may be bidding live by computer, or telephone, or may have left a maximum bid with the Auction Company. In the event of a left bid the Auctioneer or his/her assistant will usually open the bidding with ½ of the maximum bid and then continue to bid on behalf of the absentee bidder until they are successful or their bid is exhausted. Absentee bidders are required to leave a form of security with the Auction Company to guarantee their bids.
Buyers Premium:
Buyers Premiums are a business practice used by some Auction Companies to offset the expense of an Auction Sale. They are sometimes used to attract a better quality of item to a sale by reducing the sellers commission rate or by absorbing expenses usually charged to the seller. When in effect they should be taken into the mix of decisions that lead to the ultimate purchase by the winning bidder. Buyer Premiums should be well advertised and included in the terms and conditions of sale.
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