What to Know Before Your First Michigan Auction
It doesn’t matter if you are buying or selling, your first Michigan auction can be a bit overwhelming. If you are selling, the process of getting ready for the auction, be it your home, vehicle, farm equipment or an entire estate, means a lot of work. If you are the buyer and this is your first time at an auction, the excitement and auction process in general can be a lot to take in. For both the first time auction buyer and seller, once you get through the initial shock of the auction process, you have a whole other language to learn. Just like any business, the auction has its own unique language. If you are going to be successful as a buyer, and understand what is happening as a seller, it is useful to have a basic understanding of the language of auctions.
Before an Auction in Michigan
Before the auction starts there are some helpful terms that you should understand to help you decide what items you want to bid on:
- Appraisal – This is the fair market or insurance value of an item. It is the price that the auctioneer believes that an item will sell for at auction. It is also the price that determines the starting bid. Many auctioneers will start bidding below the fair market price of the item. If you are selling an item, this is the minimum price you hope to get. If you are buying, you hope that the bid price doesn’t go much above this value.
- “As Is” – All items at an auction are sold “as is,” meaning that the condition that you see, is the condition in which the item will be sold. If the item is broken or doesn’t work, or if the home has lots of needed repairs, you should know this prior to purchasing.
- Catalog – The catalog is often the name given for the listing of items in an auction. This may not pertain to a home sale, but it often is relevant to an equipment, art or estate auction. The catalog will generally give a brief description of the items available and sometimes a picture.
During an Auction in Michigan
You will hear a lot of new terms while the auction is in progress. Here are some helpful terms to be aware of as you start your bidding:
- Auction Chant – This is the call used by auctioneers to move the auction along. It generally consists of the current bid amount and the next incremental amount. This chant is used to move the auction along.
- Auctioneer – This is the individual that oversees the auction and is responsible for moving through the items for sale, and determining the bidding price and the bidding increment.
- Bidding Increment – This is the amount that an auctioneer will increase the bidding. For small items, this may be just a couple of dollars. For a home, the bidding increment will be in the thousands of dollars.
- Lot – A “lot” has two meanings during an auction. It can refer to either an individual item being sold, or a group of items being sold together. If you are referring to a catalog, the “lot” is often the number that designates the items in the catalog, and then mentioned prior to the start of the item auction. A “lot” in a catalog can also be a “lot” of items, sold together as a group.
- Reserve – This is the minimum price that the seller and auctioneer have agreed that an item will sell for. Buyers will not know the reserve amount. An item that does not meet its reserve will be passed or go unsold.
While there are many terms that may come up in a regular auction, these are the most common that the first time auction seller or buyer should know. If you are looking to sell by auction or would like information on upcoming auctions in Michigan, contact Gary M. Berry, Michigan Auctioneer at (248) 299-5959.