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Auction Guide for First Time Bidders

When you are going to an auction for the first time, there are specific things that you should know :

1. Obtain an auction brochure or catalogue. Do this at least a day before the auction date. This ensures that the goods for sale are what you need.
2. From the auction catalogue, identify what you want. If it's a car, do your research on its current market value online. Once you know its value on the market, you can set your budget.
3. At the day of the sale, phone in the auction house and confirm if the auction is going as scheduled as certain auctions can be subjected to last minute cancellations or rescheduling. Phoning in to confirm if the property or an item you are interested in is still on sale is something you should do before going to the auction house as well.
4. Once you arrive at the auction house, register to obtain a bidding number. You will be asked for your name, address, and contact number and will be asked to pay a deposit or pay a certain amount for the registration fee.
5. Come early. This allows you to inspect the auction goods properly before the bidding starts. An auction brochure may be helpful in providing information of the goods for sale; but physically inspecting the items before the sale allows you to determine if the goods are really worth any amount of your money. Do an ocular inspection, days before the scheduled auction if it is a piece of property.
6. Each item is designated with a lot number for easy reference. Take note of these numbers when you are inspecting the goods. The same number will be called during the actual auction.
7. Before the auction starts, the auctioneer will explain the rules. Listen attentively and keep your ears open for additional information on the goods up for bid.
8. Once the auctioneer calls for the starting bid, the bidding process begins. Each item may be sold within seconds. Once the lot number you are interested in is called, be alert and stay focus. Do not bid an amount you cannot afford. Stay within your set budget. Most first time bidders get carried away and bid higher than what they have originally planned.
9. If you have won an item, you will be asked to pay in partial or in full and to give your personal details the day of the auction.
   

Once it is all settled, you will be asked to sign an auction memorandum. The deal is done!.....

Types of Auctions

English Auction : This type of auction is used at English auction houses like Phillips, Sotheby's, and Christie's. The process starts when the auctioneer announces the item and the minimum bid. Individuals openly try to outbid each other wherein each bid is higher than the previous one. The item is sold when the 'buy-out' price is reached or when there is no other person willing to place a higher bid. The 'buy-out' price is a pre-determined amount that is set by the seller.

In other cases, 'absentee bidding' is accepted wherein an individual will cast his or her bid online or through a telephone.

In an English auction, a 'reserve' price may be set. This is the lowest amount at which the seller is willing to sell the item. This gives the seller the right to refuse the sale if the final bid does not reach the reserve price.

One variant of the English auction is the silent auction wherein people can write down their bids together with their name on a piece of paper. At the end of the auction, the bids will be calculated and the highest bidder wins the item.

Dutch Auction : This is a type of auction where the auctioneer begins by announcing the highest asking price. The amount is then lowered until someone is willing to buy the item. The bidder pays for the last announced price. This type of auction is convenient if the seller wants to sell the goods quickly since the process requires just a single bid to get a sale.

Chinese Auction : This is basically an auction and a raffle combined. At Chinese auction, the bidders are not the ones who will call the price. Instead, the bidders will buy a ticker or tickets and place them inside the "hat" from which the winners will be drawn for a specific item. The bidders can buy as much tickets as they want to increase their chances of winning. It is unclear whether or not this type of auction originates in China but for sure, the term is more likely to come from "chance auction".

Sealed auction : This is a form of auction where participants place their bids in a concealed way, usually in an envelope. The highest bidder wins and pays the amount of his bid to the seller. A similar version, called the second-price sealed auction is a type of auction where the highest bidder wins but pays the price of the second highest bid.

All-pay Auction : This is a type of auction where all the bidders must pay for the amount they bid regardless of whether they win or not. The highest bidder wins the item.