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Reserve price farm auctions

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Ray

06-17-2005 12:24:52

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I always like going to farm auctions because you could always see stuff sell to the highest bidder
without a lot of games.Here lately I'm seeing farm auctions in ohio with reserve prices mostly
on tractors.I've been to 3 farm sales in the last
month where the tractors didn't sell.I wish they would tell you in advance of the sale,but I guess
they think you wouldn't show up if it was just a tag/yardsale type farm auction.I was at an estate
sale today that had two tractors that didn't sell.I bid a tractor up to $4300,some other guy bid $4400 and I quit.The auctioneer announced the reserve was not met,then a minute later said I bought the tractor for $4300.I told him I wasn't the high bidder,he said "The other bidder
was the house bidder." I told him I was the only bidder then from $3500,I would take it for that.
The next tractor didn't make it's reserve either.They just waste your time.

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willyz

06-19-2005 04:50:50

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

This is my take on this. The item is worth something to everyone. You determine how much it is worth to you by bidding. If it is worth more to the seller than it is to you, why can't he outbid you? Should you have the right to steal the piece because there aren't enough bidders? That's what most people who complain about reserve bids or buy backs seem to want. They seem to want something for nothing. The man selling the item may need the money just as much or more than you but can't afford to give the thing away. Reminds me of the guy who told me he went to look at a Farmall C. It was a little rusty but ran like a top and had new rubber. The seller was asking $600 for it. Since the seller was really hard-up and needed the money the guy offered him and bought it for $350. Why didn't he have the seller throw his last crust of bread into the deal?

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Duane(Pa)

06-18-2005 19:34:22

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

Correct me if I'm wrong, that is a crime called fraud.

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Tony C.

06-18-2005 15:00:40

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

"Reserve" doesn't always mean the same thing at different sales. I've seen it where reserve means that the seller reserves the right to one last bid after everyone is done. This really isn't too bad, since they are not bidding you up in increments and by the time they are ready for the reserve bid, if necessary, everyone has a pretty good idea of how the interest was in the item. Using house bidders to run up the price I don't particularly care for.

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JK-NY

06-18-2005 05:33:41

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

I,m sure we all have a good story or 2 about this topic. Alot of times people will have someone there to bid their stuff up, or bid it in if its too low. The best defence is to know what something is worth, then decide what its worth to you and remember"buyer beware". Usually around here the consignment auctions are worse for shills, unannounced reserves etc than a dispersal. Also there are some auctioneers worse than others. I called one auctioneer one time to ask about a 1750 Oliver and asked him flat out if it would be sold or would ther be someone running it up to a reserve. He swore it would be sold straight up- no tricks to the highest bider. I took time to look it over ahead of time and went to the sale. A couple guys there were saying they saw it at a consignment sale the fall before, as they remembered it because it had a 1950 block .I saw a coworker there and talked with him the next day ,turns out the auction was for a relative of his, the tractor wasnt theirs,and you guessed it , it was bid in and didnt sell.I guess an honest auctionner is about as common as an honest lawyer or politican. My favorite story is when we went to the cow sale about 10 or 15 years ago. There was a nice little jersey bull that could be regisyered. The guy who ran the sale had a couple farms himself and also did a lot of cattle dealing too so anything that was a real good deal would get struck off to someone who didnt really bid, andd he would buy it. Well the bull went low and he struck the bull off to us .This burned the old man so he went in and paid for it and we went home , got the trailer and took it. The auctonner was a bit annoyed and said "what are you doing with that bull" We told him "according to you we bought him" and showed him the recept which we had paid for before he could tell them in the office what he had in mind.WE still kid him about that , he hasnt tried it since ,with us anyway.

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Don-Wi

06-17-2005 23:33:58

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

I guess I'll be the first to name names. C.A. Tesch in Forest Junction, WI. Crooked auctioneer at that place. Chuckie Tesch don't care, he just wants top dollar for absolute JUNK. I was at 2 auctions this spring and they were both pretty clean. The 1st one I got 3 items, 2 of them on 1 bid, the other on 2. The other was an FFA fund-raiser in Seymore. We got a few things there. Some of the stuff was junk but we managed to sell some of our old equipment after buying some slightly better there.
Donovan from Wisconsin

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Davis In SC

06-17-2005 19:28:14

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

I have no problem , if they announce the item has a reserve.... I can understand that a seller cannot afford to lose his shirt... Seems the real estate auctions are the worst here... It sells to a phone bidder, but transaction is never completed.. Even worse is if you buy a parcel , then they try to group several together, for a higher bid. they can take it from you, but if they cannot get a higher bid, you are still obligated...Long story made short, A piece of commercial real estate was up for auction. My business partner held a lien against it. It was sold at the auction to a phone bidder... But it was never closed on.... The auction was advertised as being absolute, but no closing took place, same crook still owns it....

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Keith-OR

06-17-2005 18:19:16

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

The mothod they used in Ohio, is illegal here, it is called price fixing, and they cannot use a house bidder. I think there is a Fed. Law against Price fixing. I've seen Auctioneers here get big fines for such practices, and loose lic. These type of pratices make my blood boil, if you are going to put something up for auction take the price that is bid OR DON'T PUT IT UP FOR BIDDING.
just my 2 cents...Keith

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Leroy

06-17-2005 17:46:43

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

Here in Ohio it is legal to have a reserve on something but it must be anounced at the beginning if it has a reserve and the auctionere is allowed to if a person can't be at sale leave a bid with auctioner but they will wait to put his bid in untill someone else starts the item then just keep working that absentee bid in line with the others and also will posibly state that they have an absentee bid and if somebody would complain they will give the name of the absent bidder, and if the reserve is not met and the seller is at hand they will ask the seller if he wants to accept the highest bid or not but there are not any house bidders to run things up, that could cause the auctioner to loose his licence, now at a large consignment sale here in central Ohio for some of the stuf they will not accept a reserve bid and if the owner wants to protect himself he has to watch and bid it back but on other items they will take the reserve bid and watch that it brings that amount or a no sale

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jon holt

06-17-2005 18:47:08

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Re: Reserve price farm auctions in reply to Leroy, 06-17-2005 17:46:43

I go to several auctions and I have noticed two things that I don't like about what some auctioneers are doing. Number one is an auction I went to a while back, the auctioneer himself would stop the auction to call a person on his cell phone to bid on the item for sale. If the guy can't be there, send someone with a cell phone, don't have the auctioneer do it. Number two is we have a local auctioneer around here that has a consignment sale every once in a while and if he doesn't know you and you consign something with him, he could care less what it brought, but if it is a friend of his or his junk, then it will bring top dollar. I bid on a tractor at one of his auctions and there was only two of us bidding. I kept looking around at the direction he was pointing and there was no one raising there hand or nodding or anything that I could see, so I quit bidding. Well as soon as I quit the other guy mysteriously disappeared and that was not enough for the item. My 2 cents

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marlowe

06-17-2005 16:58:40

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

if any auction has any thing with a reserve on it i GO HOME. if they want to sell it that way sell it on ebay

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Rauville

06-17-2005 16:40:12

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

Like an old retired auctioneer once said: "The best darn auction I ever had, was just me and one other guy."
As far as "house bidders" goes; sometimes the auctioneer will announce that an assigned bidder will handle the absentee or left bids. At times this individual will be the "house bidder"; but apparently in your case he was operating the same as that distant fence post that always seems to be able to get a bid in!

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Mike M

06-17-2005 16:18:31

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

At the last auction I was at ( I haven't been to many for awhile ) They anounced that they had all kinds of new regulations that just took effect and as part of that announced that anyone was open to bid. I don't know for sure but maybe this is makeing more sense as the owner was still alive and there and maybe he was now allowed to bid ? Bid runners have always been at auctions since forever the auctioneers have a couple extra numbers they use for the bids they pull out of the air or they give them to a friend of the owner and have them bid and at the end of the day if they protected anything they ended up with they don't have to pay. The owner just still pays commission. This works well and no one knows,not like announcing it after it didn't bring enough that kills the sale.

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Davis In SC

06-17-2005 15:20:47

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

Shill Bidders is what we call them... Everyone should boycott sales where that goes on... I was once at an auction where they had signs up , declaring that "Bid Rigging" among customers was a felony.... Seems the same rule should apply to the Auctioneer.... There are lots of crooked goings on at auctions. Last year I was top bidder on a piece of machinery, I had a buyer lined up for it at a very good profit. After the sale, the Banker that held the note said he could not let it go for that. He did say that as top bidder, I would be first in line to negotiate a price... The next day , I found out the back-up bidder bought it & a much bigger machine for just a little more than my bid for the first one. There had to be something crooked in that deal....

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Allan in NE

06-17-2005 13:05:05

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

Ray,

That auction service is breaking the law, as that practice is totally out of line.

True, there is such a thing as "previous bids" where a bidder is given the option to "up the antie" or even a "no sale" after the auction, but they cannot have someone in the crowd bumping the bid.

If they have a previous bid, they must announce that a bid (but, not the amount) has been made prior to the item being auctioned.

Allan

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Mike (WA)

06-17-2005 15:54:02

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Re: Reserve price farm auctions in reply to Allan in NE, 06-17-2005 13:05:05

I agree- the proper way to do it is for the auctioneer to announce at the outset that "there is a reserve on this item"- then auction it off without taking air bids or bids from shills- and when its over, announce that the reserve was not met. That being said, what normally happens is that they use air bids or shills, with the justification (in their minds) that they want to get the maximum that anyone would pay, not just the next bid after the second bidder drops out. It kind of makes sense- the price should be the most that anyone at the auction will pay- not merely the next bump after the 2 highest bidders. All depends on your perspective, I suppose.

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Chad Franke

06-17-2005 13:01:33

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

I can see putting reserves on big money items, especially if there is money owed on it.

That being said, if the auctioneer said I was bidding against a house bidder, I would have raised hell right then and there and made it known that I would never attend another of their auctions, mand they could keep anything I had bought that day. The proper way is, you bid, if high bidder doesn't make reserve, auctioneer says so, if you are interested in going higher, see me after the auction.

I don't go to an auction to bid against the house, and I won't. I will call the auctioneer on it every time, it's dirty, rotten way to do business to allow shill bidding.

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Illinois Boy

06-17-2005 12:56:37

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

Man - what a scam - never heard of this but I don't go to auctions much at all. Thanks for the education.
I thought auction meant the stuff was for sale to the highest bidder, no matter where the high bid happens to land. If they expect people to be honest and not write rubber checks - they need to be honest with an opening price or notice of some kind about a reserve.

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Fallon

06-17-2005 12:52:22

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

If they wanted to have a reserve type auction, they should just start the bidding at the reserve price. If nobody puts up a bid, they could then go to a closed bid type auction an let everyone put their highest offer in an envelope. That way, if the seller really wants to get rid of the equipment, he can decide on the highest closed bid. At least there"d be no backdoor "house bidders". You"d think a tactic like that would be breaking some sort of law. Like the old "bait and switch" tactic we"ve all heard about.

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Galen

06-17-2005 12:51:37

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

Don't know - "house bidders" used to be illegal in Nebraska (think they still are). I was watching a guy with a notepad once at an auction. He kept scribbling notes down and quickly stuffing it in his pocket. Began to notice he was sending signals to the auctioneer. About the time I questioned one of the auctioneers about it, 4-5 other people came up and cried fowl. County Sheriff happened to be at the auction and shut it down. Auctioneer lost his license. Was at an auction a couple of weeks ago in Missouri. The auctioneer told us the guy had a "Reserve Price" of $3200 on and IH Super A. This was about in the middle of the auction. About 20 left on the spot, one guys yells: "This ain't F---ing E-bay!", and the tractor didn't sell. If you have an auction, it the chance ya gotta take - somethings go cheap, others go for more than they're worth.

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Allan in NE

06-17-2005 12:58:39

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Re: Reserve price farm auctions in reply to Galen, 06-17-2005 12:51:37

I agree,

This is nothing but old-fashioned back bidding. Totally illegal.

The owner has the right to "no sale" an item AFTER THE CRY, but he cannot back bid like that during the actual auction.

Allan

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dhermesc

06-17-2005 12:45:44

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

The auctioneer announced the reserve was not met,then a minute later said I bought the tractor for $4300.I told him I wasn't the high bidder,he said "The other bidder
was the house bidder." I told him I was the only bidder then from $3500,I would take it for that.

Good reply. I'd told them to stuff it too (or worse).

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Mike (WA)

06-17-2005 12:37:38

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Re: Reserve price farm auctions in reply to Ray, 06-17-2005 12:24:52

Guess I can see both sides of it- Prices are so volatile at farm sales, I can see why they don't want to risk giving something away if the right people don't happen to show up. I can also see why you wanted the tractor for the price at which you were the only legitimate buyer- but can also see their side- they wanted to know how much you would pay, not the last price that two people would have paid. If it's enough, you've bought it. Even if not quite enough, then they confer with seller, and, like in your case, decided that your last bid was "close enough". It all comes down to making a system that gives some measure of protection to both buyer and seller, and doesn't just depend on who happened to show up. Collector car auctions have always operated that way, and buyers don't seem to mind once they figure out the system.

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mike brown

06-17-2005 13:12:31

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Re: Reserve price farm auctions in reply to Mike (WA), 06-17-2005 12:37:38

The owner of the tractor should be able to buy his own tractor and pay the auctioneer his percentage just as if some one else bought it. That way he is protected from no bid interest but it's going to hurt him some to do it.

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Mike (WA)

06-17-2005 15:43:30

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Re: Reserve price farm auctions in reply to mike brown, 06-17-2005 13:12:31

Local consignment auction handles it that way- If you ask them to put a reserve on something, they refuse, and tell you to be there yourself to protect it if you want- and they charge a flat $100 for a bid-back, not their normal percentage. Guys will take a chance for that price, while they might not if its a $10,000 item on 10% commission for buy-back. Auctioneer still makes pretty good wages for wasting a few minutes of his time on a "no-sale".

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Dave

06-17-2005 14:01:45

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Re: Reserve price farm auctions in reply to mike brown, 06-17-2005 13:12:31

I"m going to a auction that I am almost positive does this,but cant prove it yet.Being raised in auction circuits you tend to notice the auctioneer taking "air" bids,from ghost men behind the crowd.Never knew it to be illegal,but would really like to know what law applies besides a moral value.Most auctions I have been to do this because their pay is based on commission.The best revenge I have found is to start lowballing everything.Make sure you are loud and the bid cant be ignored.They wont like it, and will really try to ignore you but the crowd will almost always pay less, or the autioneer will go hoarse trying to get the crowd to bid against the house.(takes longer from the bottom).no more dirty than the fake bidding.my 2�

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dhermesc

06-17-2005 14:47:46

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Re: Reserve price farm auctions in reply to Dave, 06-17-2005 14:01:45

I don't know if its legal in KS or not But I've seen plenty of auctioners do it. I like to bid a few times quick then suddenly stop for a few moments - usually that clears out the schills and air bids as they realize they could be owning the item.

I was at an auction near Holton Kansas and couldn't believe the number of "air bids" flying around - and the crowd didn't seem to care a bit. They even had some on the thousand dollar an acre 80 the where selling. Anytime an auctioner does the confused "Who was in" bit and backs up to the last REAL bid he's just been caught taking fake bids - the second highest bidder should raise Holy H&^% right there on the spot.

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Mike (WA)

06-17-2005 15:34:08

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Re: Reserve price farm auctions in reply to dhermesc, 06-17-2005 14:47:46

I hadn't thought of the "who was in" bit as a way to back up to the real bid- thanks for the info.

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Dave

06-17-2005 15:16:57

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Re: Reserve price farm auctions in reply to dhermesc, 06-17-2005 14:47:46

Doesn"t that just burn ya up?I will remember that little trick.I can"t stand a rigged sale.

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Mike brown

06-17-2005 17:07:27

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Re: Reserve price farm auctions in reply to Dave, 06-17-2005 15:16:57

The Dutch have an auction system where they start high enough so no one will take at that price then back the asking price down in incriments until some one says "yep" and they bought it. No starting high, going low then work it back up like is done here.

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