First of all, what exactly is an auction? In simple terms, an auction is a public sale that involves selling off items using a bidding system. In essence people bid and at the end of the day the highest bidder gets to buy the item in question. Auctions present prospects of buying things at very good prices but it is not cast in stone. Plus auctions entail a lot of processes and thus one needs to fully understand how it all works. In this article, I shall be discussing some pointers that can help you understand some pertinent details regarding auctions.
Ascertain Auctioneer’s legitimacy
A legit auctioneer must be properly licensed. There can be exceptions for entities like not-for-profit organizations, charity organizations or faith-based organizations. They are not necessarily required to be licensed by must employ the use of a licensed auctioneer. If you do not find out about this you can end up losing out big time. Why is that so? An auctioneer is the one who oversees and manages the items and monies involved amongst other things. If they are bogus you can be duped so make sure they are licensed.
Surveys have long shown that fraudsters use auctions as a front to dupe people of their hard-earned money. Some of the tell-tale signs that an auctioneer could be a fraud are their location being either rented or temporary. This means you can come back later to find the whole place abandoned so be vigilant. The presence of a few people during auctions can be very suspicious because it could mean these are people working together to feign the semblance of an auction yet it is bogus. The bottom line is you must ask around, check online; just do whatever it takes to ascertain the legitimacy of the auctioneer.
Acquaint Yourself With Auction Jargon
There are numerous keywords or phrases used in auctions that you must acquaint yourself with. There are so many of them but I will just touch on a few of them here. The term ‘as is’ means that an item is being auctioned without any guarantees on good condition or suitability for use. This brings to the fore an important aspect and it is about the risk factor. Buying items from an auction mainly entails making visual assessments on items of interest. You can only view and not necessarily test out prior to buying so you can end up with an item in great condition or otherwise. You must appreciate that dynamic before getting involved in auctions. You might also hear a term called ‘reserve bid or price’ and this refers to the minimum price acceptable to the one availing an item for auctioning. Under normal circumstances, the reserve price is only known to the one selling and the auctioneer.
Then there is also what is called a ‘guide price’ and this refers to the minimum price for which an item can be auctioned. Just by reading that you can assume that these two prices can be similar but it is not always the case. In principle, the reserve price is to never exceed a tenth beyond the guide price. There is also ‘Conditions of sale’ which is an umbrella term for the framework that stipulates how an auction will be run. This also reminds me of a key knowledge area that you must be abreast with and those are terms and conditions – conditions of sale can cover a lot of that. Do not rush through them, assume or not even bother to go through them – they are paramount. These are just a few of the auction jargon that you will need to know so diligently study on this.
Understand Your Financial Obligations
Suppose you bid on an item and you emerged as the highest bidder. Then for some reason, you no longer want to go through with the ultimate payment. Well, that will be too late because you will now be bound to follow through with the final process of paying. Failure to honour that will result in you incurring colossal costs and legal action might be taken against you. So it is important to bear in this in mind before bidding on items in an auction. Be absolutely sure of what you want to bid on before getting yourself involved. It is also advisable to be objective and stick to your initial budget. The bidding process can cause a certain sense of excitement that can result in your bidding way beyond what you had budgeted for. Be objective and be level-headed because if you are not you will be hard-pressed by unbudgeted for financial obligations.
Know What You Are Entitled To
Under normal circumstances, the items to be auctioned are accessible for viewing prior to the auction day. As an interested party, you must know that you are allowed to go view items on offer. At least that helps you assess and decide on items you will bid on. You are allowed to enquire on various pieces of information such as payments methods, terms and conditions amongst several others. You can ask other people that have been involved at auctions before to let you in on what you are entitled to so that you know.
These are some of the things that you must know about auctions. The best way to learn and master all there is to about auctions is by going to auctions to observe and learn. Before you even start going to auctions to bid on items start by just observing and learning. Through that, you will acquire so much experiential knowledge on how auctions work.