When you think about an auction, images of a fast-talking auctioneer standing on a stage in front of an audience raising bid paddles are likely to come to mind. But did you know that there are actually several different types of auctions?
An absolute auction is the most common type of auction in which items or properties are auctioned off to the highest bidder. In this type of auction, the item or property is guaranteed to be sold because there is no minimum price that the seller is looking to hit. This creates a lot of interest and competition among bidders.
Minimum bid auction
In a minimum bid auction, the bidding begins at a minimum price that the seller is willing to accept. This price is published ahead of time in brochures and advertisements, and is announced at the auction. Holding a minimum bid auction is a good way for the seller to ensure they will be compensated with an amount they consider to be acceptable. But the price must be chosen wisely in order to ensure that as many bidders as possible will still be interested in attending the auction and not feel priced out.
In a reserve auction, the seller comes up with an ideal price, but does not disclose the price to the bidders. In the event that this reserve price is not met, the seller has the opportunity to reject the highest bid. This gives the seller a chance to walk away if they aren’t getting what they want, but this type of auction can turn some bidders off, as there’s no guarantee they will get the item or property even if they’ve made the highest bid.
When selling several tracts of land, auctioneers may choose the multi parcel method of selling. This method allows the buyer to have control of any tracts or parcel throughout the auction. The buyer selects the lots they wish to purchase and bids on them, first by acre and then in whole dollars. After a per acre price is established by individual tracts for the entire acreage, any bidder may add to the total amount bid on any tracts in present dollar amount established at the beginning of the auction or as new bids are posted. The lots will be announced closed if no advance of bid is made within a certain time frame.
If you live in the Northwest Oklahoma area and are looking to hold an auction for anything from farm machinery to ranches, Smith & Co. can help! We have over twenty years of experience, and our experts will make sure you are in the best position to achieve your desired results. Contact us today!