Auctions in general

[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?


[/ QUOTE ]

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.)