Auctions in general

[sYc]

A few observations about auctions in general from the cheap seats.

!. IMO, shill bidding is not a good thing, even if in the contract. Rather then use a shill to push the bid up to the reserve, why not start the bid at the reserve (which should be the least amount the owner will take for the car), not some inflated figure.

2. Why is it fair for one seller to be charged 4% because their car did not reach reserve, but another person pay10% because their car did? The one who put a realistic reserve on their car is being penalized.

3. If you hope to get 250 for your car, which is what the reserve should be, but would rather pay 4% commission instead of 10%, why not put the reserve at 350, so when the bidding stalls at 250ish, the auction house agrees to drop their commission rate if you will drop your reserve. On $250,000, the difference between 4% and 10% would be $15,000.

[firstgenaddict]

Great observations... just to re-iterate... shill bidding (by anyone) sucks and does not give true indications of what a car is worth... if one of the bidders is not going to buy the vehicle then using him to push the bid is unethical at the least.

[MosportGreen66]

Agreed on the points above... Here is my question...

The auction house shill bids up to (but not beyond) the reserve price... what is stopping the seller from ditching the reserve right then and there? Assuming the bidding ends there, who then owns the car? The auction company? http://www.yenko.net/ubbthreads/images/graemlins/dunno.gif

-Dan

[Mr70]

Why don't they have silent auctions.
99.9% of the people @ auctions are just onlookers in the way anyway.
All registered/interested parties get to FF any vehicle they are interested in.Walk around it,open the hood,open the doors,get under it,etc.
Have the seller of the vehicle standing right next to it to,to answer any pertinent questions if need be.
Then all interested parties write down the maximum amount they would pay for said vehicle,no more,no less,and personally hand it over to a panel of unbiased witnesses at a table,where they are recorded,all by a pre determined time.
They in turn announce the winning amount & hand the title over to the highest offer,IF the reserve is met.
No shouting gavel master or his minions running around either..Nothing personal Amy.

[PeteLeathersac]

I was gonna' stay out of any more of this whole auction thing as to be honest, I'm totally disgusted w/ the blatant 'auction realitites' some of us have come to grips with after reading these recent postings...feels like when I found out Santa wasn't real?.

I PERSONALLY feel a lot of sellers who allow and take part in these kinds of trickery at auction are the same groups who've created and/or brought bogus cars to offer and could care less how anything goes or turns out as long as they get $$ in the end?.
These same types are already there as they need the quick decisions that must be made by buyers under the gun of time and cameras...perhaps even prefer the BS to go on so as to help further cloud the waters thus having a better chance that nobody will ever want to make available and examine any specifics of these kinds of sales?.

After reading all the threads (existing and deleted) also the above observations and comments, I can't help but feel there's still many genuine guys out here/there who have the REAL cars and nothing to hide that could support an auction company who doesn't operate in these clandestine ways...perhaps much like Rick suggests above?.

Also, regardless of what name you call it, isn't shill bidding a felony in many if not most States...I believe it is here in most Canadian Provinces?.

Or maybe I'm wrong w/ all of this...yes, yet again?.

~ Pete
http://www.yenko.net/ubbthreads/images/graemlins/youguysrock.gif

PS - Amy=http://www.yenko.net/ubbthreads/images/graemlins/drool.gif.

[Xplantdad]

Whaddya mean Santa's not real? http://www.yenko.net/ubbthreads/images/graemlins/blush.gif http://www.yenko.net/ubbthreads/images/graemlins/frown.gif

I agree with Tom...If it's a reserve auction...then start the auction at the reserve amount!

[southernfriedcj]

[ QUOTE ]
Whaddya mean Santa's not real? http://www.yenko.net/ubbthreads/images/graemlins/blush.gif http://www.yenko.net/ubbthreads/images/graemlins/frown.gif

I agree with Tom...If it's a reserve auction...then start the auction at the reserve amount!

[/ QUOTE ]

I no expert by any means, but I think that starting the bidding low (well below the reserve) gets the excitment going and may get some folks to bid higher than they would have otherwise(auction fever if you will). I have seen people pay higher than retail at bankrupcy auctions for some items(no automotive, just general stuff).
I have paid past my self imposed limit on a few things. I didn't want to miss out on a <font color="orange">GoManGo </font> Challenger T/A over a couple thousand bucks.

[budnate]

and a little enclosed side road to have the seller drive you in the rig and see if it actualy drives right , great idea!!

[ QUOTE ]
Why don't they have silent auctions.
99.9% of the people @ auctions are just onlookers in the way anyway.
All registered/interested parties get to FF any vehicle they are interested in.Walk around it,open the hood,open the doors,get under it,etc.
Have the seller of the vehicle standing right next to it to,to answer any pertinent questions if need be.
Then all interested parties write down the maximum amount they would pay for said vehicle,no more,no less,and personally hand it over to a panel of unbiased witnesses at a table,where they are recorded,all by a pre determined time.
They in turn announce the winning amount &amp; hand the title over to the highest offer,IF the reserve is met.
No shouting gavel master or his minions running around either..Nothing personal Amy.

[/ QUOTE ]

[rubbinisracing]

[ QUOTE ]
Why don't they have silent auctions.
99.9% of the people @ auctions are just onlookers in the way anyway.
All registered/interested parties get to FF any vehicle they are interested in.Walk around it,open the hood,open the doors,get under it,etc.
Have the seller of the vehicle standing right next to it to,to answer any pertinent questions if need be.
Then all interested parties write down the maximum amount they would pay for said vehicle,no more,no less,and personally hand it over to a panel of unbiased witnesses at a table,where they are recorded,all by a pre determined time.
They in turn announce the winning amount &amp; hand the title over to the highest offer,IF the reserve is met.
No shouting gavel master or his minions running around either..Nothing personal Amy.

[/ QUOTE ]

As a seller/consignor Mr70 suggestion is far the situation I'm hoping for. Mine goes like this.....at lease 2 but hopefully 3 adversarial bidders all with a "nookie" girl in each arm and a stiff drink in each hand. My car goes across the block around 7 pm and they've been boozing since lunch. Each one wants to show the others he has the biggest "johnson". I know its a recipe for disaster but its the same recipe as a windfall profit.

On a more serious note I would advise all consignors to negotiate, negotiate, negotiate. Make all things negotiable not just the day and time across the block or the reserve. Strike all objectionable and one-sided language from the contract. It's written by them to protect them, it's your job to protect yourself. Make sure you strike the arbitration clause, the chance that you'll be the defendant in a suit is miniscule comparded to theirs. You want the opportunity to hit them where it hurts if need be. Negotiate the commisions, don't fall for "its standard and customary" crap. Ask for covered parking in the best tents, free drinks, dinner, hotels, airline flights, extra tickets, limo service, vip seating and private party tickets. All this is available to a select few and your not going to get it all but you might get something and you'll never know without negotiating. You will also have set the tone on how you expect to be treated. You want their respect not necessarily a friendship. If we all did this then they would have to change.
http://www.yenko.net/ubbthreads/images/graemlins/scholar.gif

My rant has given rise to an idea for a business that I think might work...What we need is an "auction advocate", someone who can assist in consigning a car to auction. They would provide the following services:

1. Advise the best aution company for the particular car whether sportscar, muscle, postwar and the like

2. Help arrange transport the car to the auction.

3. Assist in setting the reserve and the write up that the auction house uses in their literature and while its on the block. Proper photo taking for submission

4. Preparation of auction literature and signage.

5. Arrange for detailing and preparation of the car for auction and while at auction

6. Video taping of the auction while your car goes through

7. Assist with negotiations with the auction house while your car is on the block such as the lowering of the reserve.

8. They could also help with shipping the car home if it didn't sell

9. Negotiate the terms on the consignment.

A single consignor with an average car is not going to get as favorable terms as a mutiple consignor or one with rare and desireable cars. But this "auction advocate" who may possibly control many cars may get much better terms. If he's able to get a single auction house to play ball then the others will be forced to follow suit.

[southernfriedcj]

[ QUOTE ]

My rant has given rise to an idea for a business that I think might work...What we need is an "auction advocate", someone who can assist in consigning a car to auction. They would provide the following services:

1. Advise the best aution company for the particular car whether sportscar, muscle, postwar and the like

2. Help arrange transport the car to the auction.

3. Assist in setting the reserve and the write up that the auction house uses in their literature and while its on the block. Proper photo taking for submission

4. Preparation of auction literature and signage.

5. Arrange for detailing and preparation of the car for auction and while at auction

6. Video taping of the auction while your car goes through

7. Assist with negotiations with the auction house while your car is on the block such as the lowering of the reserve.

8. They could also help with shipping the car home if it didn't sell

9. Negotiate the terms on the consignment.

A single consignor with an average car is not going to get as favorable terms as a mutiple consignor or one with rare and desireable cars. But this "auction advocate" who may possibly control many cars may get much better terms. If he's able to get a single auction house to play ball then the others will be forced to follow suit.

[/ QUOTE ]

Great idea!

I am surprised auction houses don't have a "lower the reserve and/or commision" contract on the block ready to be signed for each car. The seller could review the contract before his car went up on the block so all he would need to do is sign the paper if an agreement to lower or drop the reserve was made.

[69LM1]

Sounds good, have you ever been able to get them to change any contract? I have never tried. I know with other things like homeowners policies, phone companies etc, if you say that you don't agree with a clause or some such and want it changed they tell you to go pound dirt. All of the carriers have the same verbage, and you really have no choice if you want that service....

The idea of a consignor service however seems like a good one, and with multiple cars, might be able to garnish some concessions. I like that one, and as a hobbiest, I would use that service. I bet he could even get better rates with the car carriers for volume etc.

[Charley Lillard]

Isn't "Auction Advocate" exactly what the guy was that brought the red GT500 to R-S was ? Did he not do just about all that stuff except he screwed up and entered the car at the wrong reserve ?

[rubbinisracing]

Good observation Charley!

I'd suggest using someone competent not Mr. Haney.

[JHS]

After going to Scottsdale B-J in 2007, I was infatuated and disgusted with the whole process. Appeard that the appeal of the auction was to be on TV and flaunt how much money you have. Main objective of the televised sales was to be seen with the dude with the sun glasses, as if he is someone special. If these cars that run through these high-profile auctions are so valuable why are they not sold outside the auction process to the collectors that end up with them when the hammer drops? Unless you are Carol Shelby I have not seen any real deals for the seller and fewer for the buyer after factoring in the costs of vehicle and personal transportation, lodging, food, venue tickets, time off from work (I have to do that to survive), buyer and seller's premiums, etc.. The only thing really worth looking at was the women and I can not afford them either. The shill bidding just adds another distasteful element to the process. At least Russo has a reserve. I think a person that would agree to a no reserve auction is taking a very big risk or has something up his sleeve to protect his investment.

[AutoInsane]

I have seen multiple $100k + cars sell on this website in under 4 days. Obviously these are the more rare and perfect cars. Even so, in this day and age of Ebay, and the internet in general, it would seem a guy could market a car himself to potential buyers who would want to buy the car. I would guess it would be the same guys who go to the auctions.

For those who have sold cars through auctions, would it really be that hard to sell a car and not utilize an auction? I know often times the hype of the auction and the "dopn't miss it for just a grand" push the price to a higer level but then there is the 10% seller's fee which negates the increase in price.

In my opinion unless you have a $200k+ car to sell you could do it via classified ads in magazines and on the internet. $500 - $1,000 in marketing would go a long way!

I think I should go into the business of selling collector cars........

[BARNFOUND YENKO]

Ive sold many of cars/high dollar cars and not one time have i ever needed any help! ie.. auctions/all the BS associated with them. http://www.yenko.net/ubbthreads/images/graemlins/dunno.gif

[redbaron]

We need a better way to put large groups of buyers and sellers together than through the auction houses. Whether this could be done as a car only swap meet style sale or just what I'm not sure. As a collective group lets take back our sport and come up with ideas to help end this madness. It doesn't make sense that the seller loses 4 to 10%, while the buyer pays an additional 6 to 10%.

[Charley Lillard]

I like the auctions. As a buyer I can go and look at hundreds of cars that are for sale and they are in one place. I don't have to go on wild goose chases all over the country looking at one car at a time. So I pay 10% to the house for bringing them all together. As a seller....Barrett-Jackson brings 5000 registered bidders to see my car. I think they earn their money.

[redbaron]

Well Charley for some odd reason I like you. But look, a lot of people don't have the extra 10% funds one way or the other. With that in mind what would you suggest to prevent the false values and market the auctions create.

[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.

[/ QUOTE ]
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.

[joey]

My brother owns a auction company and I help him reguraly. Another larger and older auction company that has been here for over 40 years started having classic car auctions and my brother who is a world class auctioneer helped them a time or two.He has since been weaning them off of his skills due to the fact that if you want a bad name start selling cars the way it is currently done.

[Charley Lillard]

[ QUOTE ]
Well Charley for some odd reason I like you. But look, a lot of people don't have the extra 10% funds one way or the other. With that in mind what would you suggest to prevent the false values and market the auctions create.

[/ QUOTE ]

I could easily spend equal to that 10% flying around the country on wild goose chases...Not to mention when you get there the car that was a 100 point car is in reality a piece of crap and I just wasted a day of my life. I have no solution to auctions because I am not looking for one. There are plenty of cars that are for sale outside of auctions and that is where I have bought most of mine. I have virtually always sold a car I wanted to sell outside of auctions but I might actually list a couple of mine with auctions since they are not selling the private route.

[NovaMob03]

Imagine the impact if buyers were notified in writing that auction houses were plannung to help bid the item to reach the reserve. This culusion between the house and seller is unfair since both parties pay commissions.
It's a bad joke http://www.yenko.net/ubbthreads/images/graemlins/bs.gif

[shor]

[ QUOTE ]
<font color="red">Well Charley for some odd reason I like you. </font>

[/ QUOTE ]

Did somebody really type that? I think Charley, as moderator, edited that post.

[redbaron]

[ QUOTE ]
[ QUOTE ]
<font color="red">Well Charley for some odd reason I like you. </font>

[/ QUOTE ]

Did somebody really type that? I think Charley, as moderator, edited that post.

[/ QUOTE ]
I actually typed. Well Charley for some odd reason I thought you knew something.

[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.

[/ QUOTE ]

Bingo http://www.yenko.net/ubbthreads/images/graemlins/scholar.gif

[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&amp;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&amp;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&amp;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?.
http://www.yenko.net/ubbthreads/images/graemlins/dunno.gif
~ 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&amp;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.)