Auctions in general

[sixtiesmuscle]

I think we're losing sight of a simple fact. When a buyer and a seller agree on a price, how is that a false value or market? The fact that a broker, the auction house, is the middle man is irrelevant. The reserve is the seller's asking price, just as it would be at a dealer or swap meet. The buyers make offers up to a point that the seller will accept. The notion that the seller should be compelled to sell his car at the highest bid, no matter how low, is just not reasonable. After all, this is an auction with a reserve. The responsibility for not paying a falsely inflated price belongs to the buyer. Nobody is forced to pay more than they are willing to pay.

[redbaron]

[ QUOTE ]
I think we're losing sight of a simple fact. When a buyer and a seller agree on a price, how is that a false value or market? The fact that a broker, the auction house, is the middle man is irrelevant. The reserve is the seller's asking price, just as it would be at a dealer or swap meet. The buyers make offers up to a point that the seller will accept. The notion that the seller should be compelled to sell his car at the highest bid, no matter how low, is just not reasonable. After all, this is an auction with a reserve. The responsibility for not paying a falsely inflated price belongs to the buyer. Nobody is forced to pay more than they are willing to pay.

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How often have we heard this? "At (fill in the auction) this car or that car sold for X dollars, but in the real world it's only worth X". Just trying to figure out a way to pool large groups of cars and people together for resale in a friendlier fashion.

[Johnny Horsepower]

[ QUOTE ]
I think we're losing sight of a simple fact. When a buyer and a seller agree on a price, how is that a false value or market? The fact that a broker, the auction house, is the middle man is irrelevant. The reserve is the seller's asking price, just as it would be at a dealer or swap meet. The buyers make offers up to a point that the seller will accept. The notion that the seller should be compelled to sell his car at the highest bid, no matter how low, is just not reasonable. After all, this is an auction with a reserve. The responsibility for not paying a falsely inflated price belongs to the buyer. Nobody is forced to pay more than they are willing to pay.

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Bingo

[sYc]

Following this thread, and the R/S thread, brings to mind what more then one person has told me. On this site there is a lot of useful information, just at times we take the long way around. IMO, many of us “rookies” understand the whole auction process a whole lot better then we did a few days ago, which to me makes it better for sellers, buyers and the auction houses. Hopefully the auction houses will look at how they do business and clean up some of the gray areas, and no doubt any buyer or seller who has followed all of this will certainly read their contract a lot closer, making sure they understand fully what they are agreeing to.

I for one do believe auction houses serve a useful purpose in our hobby, as does Ebay and other avenues available for selling cars. All have their strong points as well as weak points, but when everyone knows the rules and abides by them, everyone wins.

[tirebird]

I agree Tom: I posted the below comments on the Russo&Steele thread.

I have a few comments that are probably not of interest to most of the readers here. I've never bought or sold a car at auction, never attended an auction, and never watched more than a few seconds of an auction on television. In my opinion, if the auction houses want to protect their supposedly good name, then they have to eliminate this shill business. Yes, by the letter of the law, it's legal. But, by the spirit of fairness and transparency, it's sleezy. There's no better word for it. If a car has a 100k reserve and real buyers only bid 80k, then that's the real value from the buyers willing to purchase the car. Artificially inflating the value up to a possibly outdated price point, doesn't do the hobby or the real buyers any good. But, I'm probably really naive here, it's really about making money for the auction houses.

Out here in California, there are a lot of foreclosed homes being auctioned by banks. I'm sure the same situation exists where you live too. I was visiting friends recently and happened upon one of those auctions at the steps of a local courthouse. This one home, that originally sold for 750K was on the block for a minimum bid of 355k. It didn't get any bids. The bank didn't have shill in the audience to bid the minimum. Would that have been okay? I don't know the law. But I do know, on this day, the bank set an unreasonable price and the laws of supply and demand, rejected it. There was no artificial inflationary bids to unrealistically price the home at a higher value even if it didn't sell. I like that model for the auction business.

[Unreal]

Why is it legal for R&S to "bid up to the reserve" on a car I might have in their auction, but it's not legal for for my brother-in-law to do the same thing?

It can't be the bogus excuse that R&S gave, that, "they were trying to get the seller what he wanted." That's what my brother-in-law would be doing, too!

[PeteLeathersac]

Whether true or not, here's an interesting chunk of a thread I read online regarding auctions and the legalities of shill bidding?.

~ Pete

"...A couple of things we all should understand about the auction biz.
For example, in the bidder's contract for the X-X auction, it states that if a car is consigned with a reserve price, X-X employees may bid on the car up to the reserve price. With 80-85% of the cars having been consigned at "no reserve" this year, there was an obvious lack of "mystery" bids on those cars. This shortened auction time considerably as in previous years they had gone to 11 or 12 p.m. or even 1 a.m. as I recall. Friday night, for example, ended at 9 p.m. Always read the fine contract print.

Also, in MANY if not MOST states including Arizona and California, it is perfectly legal under the law to "shill" bid. That shill can be absolutely anyone whether a auction company employee or a friend of the seller.
And realize too that the owner has the right or ability to "buy his car back" meaning if bidding stops well below the seller's desired price, he can place a "winning" bid and pay only the auction commission.

This legal situations do give the appearance of impropriety in the auction business but it is all part of the game. If you ever want to be a bidder, study several auction events very well before purchasing a bidder number and actually raising your hand which represents your savings account.

I was a first time bidder at X-X this year for the '57 XX 2dr hardtop. I knew the maximum I was willing to pay for that car after carefully studying it from top to bottom inside and out and under carpets and mats. Yes, I got out of my electric scooter and onto the ground. When the bidding went beyond my willingness I had the sense to wave off the ringman.

Incidentally, all of my business with X-X from registration to ringman was totally pleasant. There was NO pressure to increase my bids..."

[Non-text portions of this message have been removed]

[njsteve]

[ QUOTE ]
Why is it legal for R&S to "bid up to the reserve" on a car I might have in their auction, but it's not legal for for my brother-in-law to do the same thing?


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Most likely because when both the sellers and bidders sign those multi-page contracts, the microscopic boilerplate language in their paperwork says they both agree to it (whether they actually realize it's in there or not.)