 |
PURCHASING AT AUCTIONS: PART 1
There are many types of auction sales, the most common being public ones. The purpose of a sale varies from auction to auction. However, most items sold are second hand or used. In some instances items may be unserviceable or too expensive to repair as in the case of items from government agencies.
Consumers need to be vigilant and informed about the purpose of an auction and the kinds of goods being sold therein. Regardless of the type of auction consumers attend, they should:
- Make the experience justify their time and expenses
- Choose items carefully
- Only attend sales that have the potential to save them money
Knowing the terms used at auctions is important; here are a few:
- Conditions of sale. Conditions of sale are the terms under which the auction will operate, including buyer's premium in effect, reserves in place, payment options and terms, and date by which items must be removed from the sale site. These sale conditions are generally announced by the auctioneer at the beginning of the sale.
- Bid. A bid is the amount of money you offer on a particular item you wish to purchase. Low-value items will generally increase by dollar increments, while higher-value items can increase in hundred or thousand-dollar increments.
- Opening bid. The auctioneer usually opens bidding, at which point bidders can wait as the opening bid drops, or begin to bid, driving the price higher.
- Reserve. A reserve is the minimum price a seller is willing to accept for an item. For instance, if bids top out at $200 for a desk, but the reserve is $250, the desk will not sell because the reserve price was not reached. The auctioneer informs bidders that the reserve was not met, though he will not disclose the reserve amount, and moves on to the next lot for sale. Some reserves are revealed at beginning of sale.
In Part 2 we shall cover other terms so that you can be a more informed consumer.
Remember, the power is yours!
Credit: Entrepeneur.com
|
