Auction Buying Secrets – 7 Rookie Mistakes You Should Never Ever Make
So it’s your first auction and the place is full of people and excitement. The auctioneer is barking out bids, numbers and prices. People all around you are bidding on an item like it’s a long-lost childhood toy. You notice that some item you have just seen in the store sold for a fraction of the store price. A second item comes up and it goes for yet another great bargain. You think, “Wow, this seems like a pretty easy way to get things dirt cheap. Maybe I should bid and get in on the action. How hard can it be anyway…right?”
While great buys can be had at auctions, the opposite is also true. Getting stuck with something that isn’t what you thought it was can (and more often than not, does) happen. Below are some pro tips that you can use to avoid costly mistakes. Following the tips will save you a lot of grief and expense and give you the tools you need to bid like the pros.
#1 – Hidden costs
While auctions provide a means for anyone to find a bargain, it’s important to keep in mind many of the hidden costs often associated with auction buying.
Most, if not all auctions have what is called a buyer’s premium. This is an additional fee that is put on all items sold at an auction. This fee can run anywhere from 10% to 20% of the item’s sell price. This cost is an additional fee that you will be charged for items you buy in addition to the price you bid. Beware – buyer’s premiums can add up very quickly. Auctions can often have different buyer’s premiums for those bidding online and those physically bidding at the auction. Every auction is different so take note of what these costs are and which fees apply to you before you bid.
#2 – Do a detailed inventory and inspection
If I can give you two pieces of advice here – it would be these:
- Don’t assume all the parts or there.
- Don’t assume missing parts can be requisitioned or repurchased.
I’ve seen to many rookie bidders thinking they got a great buy only to discover later that the items are no longer in production or the manufacturer is out of business. Do a detailed inspection of items to make sure all necessary items (ie. hardware, parts, controls, manuals etc.) are there. If parts are missing make sure replacements are available and have an idea of what the costs will be to fix, repair or replace what is missing before you bid.
#3 – Taxes & Fees
Depending on the location of the auction, be aware that different states have different rules about what taxes or fees they want you to pay. Some states are nothing some are 6% – 8% or more.
#4 – Remember…there are no “Do-Overs”
What that means is that “What you see is what you get!” and “You buy it, you own it!”
If an item you bid on doesn’t run or isn’t what you thought it was, you have NO RECOURSE later. The auctioneer is not going to give you your money back or allow you to back out of a purchase once you buy it. It is your responsibility to know what it is you are bidding on – NOT the auctioneers. Items purchased thru auctions are inherently sold “as-is, where-is” with no implied guarantee or warrantee.
Caution: Auction bidding is a fast paced game for grown-ups – not victims. At auction, you sign the auction’s terms and agreement paperwork before you are allowed to bid. This agreement is a legally binding contract that says you know what you are doing and what you are bidding on, and you assume all liability to pay for whatever you buy in the condition it is in when you buy it. If you bid on an item thinking it works or runs only to find out later it doesn’t – too bad. In other words – you buy it, you own it.
#5 – Removal Costs
Never forget, unless specifically stated otherwise, everything in an auction is sold “as-is, where-is.” If the equipment you purchased requires dismantling and/or removal, YOU (as its new owner) will be responsible for the disassembly and removal of the item – not the auctioneer or former owner. This can be very expensive.
#6 – Time Costs
Related to removal costs are time costs. There are often very short time frames and/or restraints for removal that you will be responsible to adhere to. Failure to comply with these can result in fines or legal action and even forfeiture of the equipment. The time you have to remove the item can also drastically affect the final sale price you and others may be willing to pay. I have seen time frames for removal that range from the same day as the auction to several weeks or even months. Know when things need to be removed before you bid.
#7 – Transportation
Items to big to move by yourself may require additional people or equipment to move. The auctioneer IS NOT going to do that for you. Don’t bid on items that will require you to hire or requisition additional people unless you know the costs of doing so in advance. With fuel prices on the rise, having to freight items across long distances can be very costly. Again, know and factor in all the costs before you bid.
There you have it – as with any great deal – the devil really is in the details. Please feel free to comment or share other auction tips or tricks in the comments below.