Sunday, August 06, 2006

Auctions – Part One: Live Auctions

Auctions are a great place to explore, interact with a wide variety of people, get that “once in a life time” treasure, and just have fun. However, as with all situations involving the expenditure of dollars, we must proceed in a conscious and thoughtful manner. Below I will present various considerations for Live Auctions. Internet auctions will be covered in Part Two. Our discussion primarily involves budgeting issues and not the details of the items that are up for bid. An important aspect of bidding in any type of auction is the dynamic nature of the actual selling price. Unlike buying something in a store, the actual selling price is very fluid in the auction process. However, like making any other purchase, your budget needs to be able to absorb the. No matter how tempting the item, you must be able to afford to acquire it! Also, the item’s price must remain within reason. Whose reason? Your reason – based upon sound knowledge of what you are planning to buy. For utilitarian items such as an appliance, or other household pieces, this is a straightforward process. However, you must be extra careful for hobby type items where emotions and an artificially pumped up need to acquire “at any cost” can cloud your judgment. However, at the end of the day, the most important issue is to be able to obtain the item within your budget means.

Live Auctions
Sold! … Huh?
Attending a live auction can be an exciting fun experience or the source of heartache and frustration. Here I will layout some general guidelines from a budgeting perspective on attending auctions.
Where to find them
First: where to find an interesting auction? For folks in the Michigan area, I recommend checking The Auction Exchange and Collector News . This is a weekly newspaper that publishes a wide variety of auctions in the Michigan, northern Ohio, and northern Indiana areas. For other parts of the country, you may want to check the local newspapers.

The Auction Exchange and Collector News
P.O. Box 57
Plainwell, MI 49080-0057

Yearly subscriptions are available at a reasonable price. Check your local bookstore, they may carry the paper.

Like any other expenditure: When going to an auction, you are planning on spending money and as such should be treated like any other money-spending event. As always, be leery of unconscious spending. Be sure to think out in advance why you want to go to this particular auction, and what is your budget.

Planning and premiums checking
Be sure to plan out the event ahead of time. Getting lost on the way, having to leave the auction early, etc. can contribute to a frustrating instead of enjoyable experience. If you are not sure of how to get there, I recommend the use of MAPQUEST® online at to get detailed directions from your location. Think about the time of day (rush-hour issues), construction, etc. You should plan to get to the site about an hour ahead of time to allow viewing of the items before the auction gets started. Also plan on being at the auction two to three hours after it gets started. Once you’ve done a quick once over and determine that there are indeed items of interest, take time to register and obtain a bidder number – don’t wait until just before the auction starts to take care of this item. When registering also confirm whether or not there is sales tax, and/or some type of buyer’s premium. Premiums are sometimes also added for using a credit card. A buyer’s premium may be added onto the winning bid regardless of payment method. For example a buyer’s premium of 10% means that the cost of a winning $100 bid is actually $110 (plus any applicable sales tax). The point is that you need to be aware of the total cost of an item to you as you are bidding up something.

Particularly for credit cards, you may want to call ahead of time (usually earlier on the same day of the auction) to confirm whether or not they are accepted and if there is a premium for usage. For checks, you may want to call if you are going to an auction in another state to confirm acceptance.

The cost of going
While auctions don’t usually have an admission fee, there are certainly costs associated with attending one. The most obvious expense is for gas, especially if the event is far away. Also you may end up buying a lunch or dinner that you wouldn’t have otherwise purchased. Before setting out for a place a far piece off and/or devoting the better part of a day at an auction, perform a sanity check on the cost of attending. You should be willing and able to spend at least three to five times this cost for items available at the auction. If this is not the case, then I recommend passing the event on by.

You need to know what you expect from the auction. If you are going for a particular collecting interest, be sure that it appears that there maybe items of interest to you. You need to know about how much an item is worth before you start bidding. If you are a collector, you maybe willing to pay more to get a particular item, but it still should be within your collecting budget. If someone out bids your limit, you must be able to just let it pass on by!

You may see something you are interested in that is totally outside of the reason you came. That’s okay, go ahead and bid if you have the money in an appropriate budget.

When bidding, hold up your bidder card until the auctioneer recognizes you or the price has gone too high. You should always know whether or not you are the current high bidder. Don’t get lost in the bidding frenzy though. Always keep in mind your upper limit on a particular item. You should set this limit before the bidding starts. Typically before the auction when you are browsing the items, jot down the item number/description and annotate a maximum bid. As the auction progresses, you may adjust this amount if items ahead of it go to you or someone else. In any event, before each desirable item comes up for bid, you should finalize your upper limit.

Assuming that you are a collector, you should do better against a lot of dealers than if there are a lot of other similar collectors in the audience. A dealer is buying items with an eye toward making a profit; while you are buying an item for your own personal pleasure. In any event, keep to your limits.

You may ask: “How do I determine my limit?” Well, other than the obvious limit of your current budget, you need to know your subject matter. As a collector, it is always important to keep up with the relative worth of various items both in your collection as well as those items that are on your want-list. Collector catalogs are a good source of information although their prices tend to be on the high side in many cases. Online auction venues such as eBay® are also a source of information on what folks are actually paying for various items. However, when checking online auctions give more weight to items that have actual bids. The price someone is willing to pay is more important than the price the seller is looking for.

Time to leave
Once all of the items you were interested have been auctioned off, you can feel free to leave. If you were the high bidder on the last item you were interested in, allow 15 to 20 minutes for the winning ticket information to get from the auctioneer table to the check out table. I recommend that you tear up your bidder card and/or take it with you when you leave. Also, remember it is okay to leave the auction without buying anything. If it turns out that there is nothing offered that you are interested in, leave immediately. If all of the items you were interested in went to higher bidders, also leave. It’s okay to leave empty handed (but still take with or destroy your bidder card).

As Always: Have a Good Time !!!


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