What’s the best type of auction?
Live, Online only, live simulcast, what is the best type of auction? Our answer… it depends. There are a lot of different factors that go into selecting what type of auction will be best for a certain situation. Some of the things that help determine that can be: type of asset being sold, space restrictions, time restraints, comfort/preference of Seller, and the list goes on and on. In this post we will examine 3 different types of auctions and discuss the pros & cons of each. The types of auctions we will look at are live only, timed online only, and live simulcast auctions. Let’s dive in.
Live Only Auction
A live only auction is a traditional auction where the auctioneer conducts the auction by asking for bids from a live crowd in attendance. These are widely popular and still used quite often, especially in fundraising/benefit auctions. In a live only auction there is a crowd of bidders that will listen and bid as the auctioneer moves from item to item crying the auction. There is typically one or more ringman that assist the auctioneer and answer questions that Bidders may have.
- Pros of a live auction: A lot of bidders still prefer a live auction, they like the transparency of being able to see who they are bidding against, and they like the social aspect of it as well. With a live auction typically everything is paid for and removed from the property the day of the auction which in certain situations can be a HUGE benefit. For the Sellers benefit at times during a live auction when both (or all) bidders are looking at each other bidding the competitive juices start flowing and the prices start going higher and higher.
- Cons of a live auction: Normally with a live auction your bidders typically are more local or come from an easily drivable distance. There are exceptions to that rule but in general you have a local crowd. You may also be at the mercy of the weather if the auction is held outside or people have to travel far to get to your auction in the winter. Some bidders may have other commitments during the time of the live auction which means in this situation they won’t be able to bid (some solutions for this problem as well).
Timed Online Only Auction
A timed online only auction is exactly what it sounds like. All bidding takes place online through an online bidding platform. The lots/items on the auction have a timer on them and when the timers gets to 0 the items sells to the highest bidder. Typically timed online only auctions utilize a soft close with auto extend, which simply means that if someone bids in the last 60 seconds the timer extends back to 60 seconds until all bidding has stopped (or whatever interval the auction company choses- some do 1 minute some do more). This type of auction has gotten extremely popular and works well for the most part. The bidding is normally open for 2 weeks or more before the lots sell, although most bidding doesn’t take place until the last couple of hours/minutes. Typically on a personal property timed auction there is 1 or more preview dates so that potential Bidders can inspect the items prior to bidding, and once the auction has closed there is a scheduled pickup day/time to get the items removed from the premises.
- Pros of a timed online only auction: The bidder pool is generally quite larger in an online auction that it would be with a live only auction. Some bidders prefer to bid online vs in the crowd, we’ve heard many times that they are more comfortable bidding online (comfortable/happy bidders = happy sellers). Bidders also know that they can leave a MAX BID if they are unable to watch the auction close and the computer will bid on their behalf up to their max bid, it lets more people participate in the auction which turns into better results. Timed auctions can also sell more items in a shorter period of time than other types of auctions, which can be one of their biggest benefits for both Buyers and Sellers.
- Cons of a timed online only auction: Not everyone has/likes using the internet let alone bidding online and don’t want to try it (once most try ours they comment how easy it is to use!!!). While it’s not overly common but internet outages can cause chaos for a timed auction (we have the ability to pause ours). It can also take longer to get all items paid for and removed as opposed to a live auction. There can also only be one online bidding platform used during a timed online only auction.
Live Simulcast Auction
A live simulcast utilizes a version of both options above. This is a live auction that also has live online bidding available for those that can’t attend the auction. There is typically audio and video streaming during the auction so that online bidders can see & hear what the auctioneer is saying. Typically there is an internet clerk/operator that relays the online bid just as the ringman does with the live crowd. This type of auction works great for almost any situation and has become somewhat of a standard practice for most auction companies. The online bidding is typically open for several days/weeks prior to the live auction.
- Pros of a live simulcast auction: You get the best of both worlds, the live crowd that prefers to bid in person, and the wide reach that online bidding offers. It caters to bidders that like to bid in person, and to the bidder that is more comfortable bidding online. Online bidders also know they can leave a max bid in case they are unavailable during the live auction. If the need arises multiple online bidding platforms can be utilized at once which can expand the bidder pool. While having the benefit of the online bidders there is still the benefit of having the auctioneer crying the auction and the ringman/ringmen working the crowd to entice more bids.
- Cons of a live simulcast auction: Live simulcast auctions can at times be slower paced than a traditional live auction and timed online only auction. There can be delays/lags from the Auctioneer to the bidder on their device. There is also the risk of the internet crashing during the live auction which can cause delays and be an inconvenience for those that are in attendance. Like a timed auction it can also take longer to get items paid for and pickup by the Buyers. There is also normally extra expenses that go along with having a live simulcast auction.
As you can see above there is not a ‘one size fits all’ solution to which auction type should be used on every auction. We still believe if the auction has been property marketed and professionally managed any type you choose will be successful. We use all types depending on the circumstances of each client and what their needs/wants are for their auction. We sell all types of assets ranging from Iowa farmland, real estate, farm machinery, heavy equipment, antiques, firearms, toys & much more using all 3 methods and with great success. We strongly advise that if you are considering an auction you need to have a discussion with your auctioneer about what your needs/wants are and what type they see being the best for you and why. We would love a chance to visit with YOU about any of these types of auctions or other types as well.
As always we hope you take time to check out our upcoming auctions!
Thank you for taking the time to read and we hope to have the chance to visit with YOU soon!
Green Real Estate & Auction Co.