Auction School — A Great Investment

Were any of us born auctioneers? Well – maybe close – in that our father or mother was an auctioneer and we were bid-calling at age 2. Or, we had family in the business, and grew up around the auctioneer, clerk and cashier. However, for most of us, it was much later in life that we decided to join this exciting profession.

I can still hear my grandmother telling me that I should, “finish my studies,” before I played in her back yard. Finish my studies? What child wants to do that? For that matter, does anyone want to do that? Am I ever glad I did finish those studies my grandmother was referring to, because I sure didn’t know what I didn’t know.

Want to be a doctor or lawyer? Count on years of college, and thereafter graduate school. What to become a dentist, architect, accountant, teacher, astronaut, nurse … the list goes on; they all require extensive schooling – no matter that your father or mother is currently practicing in the profession that you hope to join. Yet, many people wanting to become auctioneers, even today, question the need to go to auction school. I can hear them saying, “I know all I need to know to be an auctioneer …”

Why else go to auction school? We think there are seven auction school benefits:

• Develop good habits, before learning bad habits. Yes, habits are hard to break, and so they are much more beneficial if they are good habits, versus bad habits. “Dad always said to open the bid up if there is a tie bid.” Dad evidently didn’t know that tie bids don’t exist. “My mom always said to say the buyer number, and then the price.” Here again, mom wasn’t teaching standard bid-calling practices used all over the world. Learn the right way and be able to teach your staff and others working with you good habits too.
• Experience many different points of view, and a more complete perspective. Many students come to auction school, or otherwise enter the auction business with only one business plan or model. What auction school can do, and has done for thousands of students over time is expose them to other auction business models, and types of auctions. Come to school thinking only about selling cars at auction, and become the foremost real estate auctioneer? It can happen, and has happened.
• Discover the auction business from people who are passionate about it. Auction school instructors are generally passionate about the auction method of marketing. Auctioneers like to talk, and love the business they are in, and therefore love to talk to students about it. Too, auction school instructors are motivated, in that the more auctioneers out in the business world – doing it right – the more the auction profession benefits and the more business there is for all of us.
• Share your learning experience with others much like you. How was that very first day of school when you were 5 years old? Did it help that there were other 5-year-olds there with you? Of course. The auction school learning experience allows students to learn from instructors, guest speakers, and each other. Sometimes the best person to ask about a topic or technique is a fellow student, who wants you to succeed just like you want him to succeed.
• Expand your knowledge of all aspects of the auction industry. Auction schools cover much more than bid-calling. How do I draft an auction contract? What ethical challenges do auctioneers face? How are liens researched prior to auction? How do I learn to clerk, register buyers and settle auctions? What other business relationships will I need to develop? And, of course, how will I setup my own business and make money at it? Some say the auction itself is only about 10% of the entire job of putting on a successful auction; auction schools teach that 10% — and the other 90% too.
• Find lifetime friendships and possible business partners. Need some help on your first auction? It’s a good chance you can call an auction school classmate and get some help. Some of the best friends and possible business partners result from relationships made at auction school. By spending time in class, and time before and after class, auction school students typically become very close and it’s not unusual that these relationships sustain for years.
• Learn what you didn’t know you didn’t know. Auction school instructors often have decades of experience in the exact field aspiring auctioneers want to practice. Wouldn’t it be likely that instructor experience would save those students from making some of the same mistakes they made in their careers? The cost of attending auction school is probably less than one unhappy client, a few unhappy buyers, certainly less than that first lawsuit alleging your breach of fiduciary duty.

Wouldn’t you advise anyone wanting to become a professional to get the necessary training? Don’t you encourage your children or grandchildren to “finish their studies?” We think that alone is sufficient reason to attend auction school. But, even without that treatise, attending auction school can be one of the best investments you can make in your auction career.

Mike Brandly began his auction career in 1979. He is president of Brandly & Associates, Inc. and is an associate and Auctioneer for Keller Williams Greater Columbus, a large real estate brokerage based in Columbus, Ohio. Mike conducts 100′s of auctions a year and his appraisal company completes over 150 appraisals per year for Probate, Civil and Bankruptcy cases. Mike is the Director of The Ohio Auction School.

A Place for Everyone

The October 2009 class of The Ohio Auction School graduated last week.  They were a pleasure to teach and we had a great time in class. Many students in auction school will ask if they have what it takes to make it in the auction business. My answer is always yes. I am not naïve, however. Not everyone is cut out to be a great bid caller, the most obvious test to the general public, of an auctioneer. Bid calling is a combination of God given talents, developed skill and a great deal of practice. Some people lack the confidence to stand in front of a crowd or simply do not have the same opportunities to practice their craft. In auction school we work through many of those issues but once a student graduates often the circumstance of life and their previous career have a way of distracting them from the path they were set upon in school.  Still others fall prey to the widely held position that bid calling is becoming less important or will be a victim of the internet based auctions. While internet based auctions invite this sort of thinking the live auction will ALWAYS be part of the marketing landscape because of its unique and powerful appeal to both buyers and seller.

Regardless of bid calling proficiency there is a place for anyone that has a strong work ethic and a good business sense in the auction industry. While the art of bid calling is critical there is much more that happens and has to occur before the gavel falls and that work need not be always be done by the man or woman on the podium.  What is critical for everyone in the auction profession to understand is why the auction method works; how the concepts of prospect of a deal, urgency, competitive bidding and transparency come together to make the auction method such an effective marketing tool.  

Opportunities abound for those who understand auctions and believe them to be the answer for the marketing of property.  What is critical for every auctioneer to understand (both new and old) is what aspects of the business require additional assistance from a fellow professional or other auctioneer and what aspects you are comfortable handling. In the beginning we all act like Superman, we can do it all. But in short order every successful auctioneer realized his or her weakness and brings in the right talent. If they don’t they are not destined to have either longevity or success.

Congratulations and good luck to everyone who graduated from auction school this fall, regardless of which school you attended. This is a great profession that can always use a few more strong backs and sharp minds.

Peter D. Gehres is a first generation auctioneer and Realtor based in Columbus, Ohio with Belhorn Auction Services, LLC. He is an instructor at The Ohio Auction School and has earned his CAI and CES designations from the NAA Education Institute and is a recipient of the Pat Massart Leadership Award. He is a member of the National, Ohio, Pennsylvania and Michigan State Auctioneers Associations. He speaks across the country on auction and business related topics through Auctions on Track an auction education, leadership and motivation company.

Absolutely

Mike Brandly selling at absolute auction

Armed with the most powerful marketing method that exists, Auctioneers all over the world know in order to maximize results for their clients, they must maximize interest in those items. More bidders means more money, just as fewer bidders means less money. The larger the number of bidders, the more competition there is, especially as the bidders sense that the other auction attendees are interested in the same item as they are. And, as we all know, emotions are involved when it comes to bidding at auction.

There is no other aspect of a public auction that attracts attention more than buyers feeling as if they might “get a deal” on something they want. The prospect of a deal is what drives bidders to auctions. Sometimes they feel as if they get a deal, sometimes they don’t, but getting them there is essential to competitive, top-dollar bidding. When sellers place restrictions on the sale of their item at auction, such as a minimum bid or reserve bid, buyers are much les likely to participate because they feel that it removes the “prospect of a deal” component.

For sellers to maximize attention, they need to minimize the restrictions upon the buyers. Auctioneers cannot make bidders bid, but they can see to it that a large crowd shows up auction day to participate. Although many things factor into a buyer’s decision whether or not to attend an auction, the one restriction that deters more buyers than any other is an auction where the seller might not accept the high bid for their item.

Equipped with this timeless truth, Auctioneers know that an “absolute” auction will attract more buyers, and more money, than one that isn’t advertised absolute. The mere sight of the words, “Selling Absolute” in an auction advertisement gets the heart rate of buyers racing. You could compare the absolute auction advertisement to one that says “You might win the lottery.” Wouldn’t a reserve auction advertisement suggest “You probably won’t win the lottery!?”

Most everyone in our industry knows that the market determines the value of something. At an auction, our market is a pool of registered bidders ready and willing to buy that “something.” With a larger bidder pool, we have a larger portion of the market looking at our auction items. Even one bidder can make a material difference in the prices realized at auction. Yet, can we get everyone to attend? Not hardly, but we can get a larger crowd – a larger market – and be much more assured that market values were realized.

The UCC 2-328 defines some basic rules for an absolute auction: Once the auction is opened, and there is a calling for bids, the item must sell unless no bid is received within a reasonable time. As well, if we assume that by the seller bidding, a right of withdraw is being invoked, then the seller cannot bid at an absolute auction – other than at a forced sale (auction). Lastly, it is clear that an absolute auction can be cancelled (withdrawn) prior to the opening of the auction – or calling for bids; in other words, if a seller doesn’t want to sell their item at an auction that has been advertised as absolute, they must decide before there is a calling for bids, or hope for a very quiet reasonable time thereafter.

Along with many states, NAA has furthered the rules for absolute auctions to include:

No auction should be advertised “absolute” or “without reserve” unless there is a bona fide intent to transfer ownership at the time of advertising and at the time of the auction, regardless of the bid or bidder.

An absolute auction should not be held when there are liens or other encumbrances on the property, unless a financially responsible party signs a binding commitment to guarantee that all liens will be paid regardless of the high bid.

If we were to summarize the UCC and NAA’s position, it might be as basic as: “At an absolute auction, if the auction is opened up and there is a bid within a reasonable time, the item must sell without any reserve whatsoever.”

However, as we all know, it isn’t quite that simple. Unfortunately, we all see absolute auctions conducted with:

• Minimum opening bids
• Seller confirmations, or right of withdraw
• Seller bidding, or bidding upon the seller’s behalf
• Liens – either latent, and/or part of the purchase

Why do we see these misuses of the absolute auction format? It may be that those Auctioneers have clients who are appropriate for a “with reserve” auction, but want more bidders in attendance and increased bidder reaction. Yet, as this logic is applied, it makes it difficult for the word, “absolute” to maintain its true meaning in the marketplace; this harms those sellers who truly want (and deserve) the advantages of absolute auction marketing.

Too, it may even make particular Auctioneers subject to doubt or question. For instance, if an Auctioneer advertises an absolute auction, but doesn’t sell due to the seller not being happy with the high bid (or whatever reason), then what about the next client, and their wishes to take advantage of absolute auction marketing? Do we really think buyers are so ignorant? Isn’t it reasonable to think a buyer at the first advertised absolute auction would think the next one wasn’t really absolute, either?

Is it hard to get a crowd at a “with reserve” auction? Not necessarily, as the actual reserve can be conservative in nature (such as a $100,000 home selling for at least $50,000) or otherwise trifling. However, as the reserve becomes more material in the minds of potential buyers, the less likely they are to participate. I would suggest we need to always keep in mind that not all sellers are appropriate for auction marketing, rather than trying to dilute the true definition of an absolute auction by using terms that do not belong in an absolute format. For example an absolute auction with a “minimum opening bid” or “selling subject to” is not an absolute auction at all. If a seller is not comfortable with a true absolute auction, then another format should be used, whether it be a reserve auction or in some cases, no auction at all.

Trust is one of the essential elements of an Auctioneer. Sellers have to be able to trust their property will be marketed properly and the proceeds handled correctly; buyers have to be able to trust their bids will be taken fairly and ethically and that what has been advertised is truly being offered. Lacking either of these components, it’s not difficult math: No buyers = unhappy sellers. No sellers = no auctions.

Why would we want anyone walking away from our auction saying, “I thought this auction was advertised absolute, but there were minimum bids?” or worse yet, “If I ever need to hire an Auctioneer, it certainly wouldn’t be this one.” Many potential clients are customers today in your auction crowds, and don’t think for a second they aren’t evaluating you, your staff, the prices, and their future utilization of your services. It’s rare for a potential client to call and say that they want to use your services due to their less than ideal experiences attending your auctions.

On the contrary, it is really quite simple. By selling real or personal property absolute (truly absolute), the crowds are larger, the prices are higher, and your seller is happier. As well, more in attendance walk away and say, “Well, prices were high, but if I ever need to hire an Auctioneer, that’s the one I’d hire.” Could any Auctioneer describe an absolutely better day than that?

Mike began his auction career in 1979. He is president of Brandly & Associates, Inc. and is an associate and Auctioneer for Keller Williams Greater Columbus, a large real estate brokerage based in Columbus, Ohio. Mike’s appraisal company completes over 150 appraisals per year for Probate, Civil and Bankruptcy cases. Mike is the director of The Ohio Auction School.

Happy National Auctioneers Day 2009

The NAA is excited to announce that the association successfully introduced and passed S. Res. 86 in the United States Senate yesterday. The Senate Resolution designates April 18, 2009, National Auctioneers Day in the United States. S. Res. 86 was sponsored by Kansas U.S. Senator Sam Brownback.

See the resolution: http://thomas.loc.gov/cgi-bin/query/z?c111:S.RES.86:

How do I become an Auctioneer in Ohio?

How to become an auctioneer in Ohio:

1. Attend an accredited auction school.
2. Find a licensed auctioneer to be a sponsor.
3. Pass the state apprentice auctioneer test.
4. Serve a 1-year (12 months) apprenticeship and a minimum of 12 auctions called.
5. Pass the state auctioneer test.

The Ohio Auction School is approved to provide pre-licensing education for those wishing to obtain their auctioneer’s license in Ohio. The Ohio Auction School also provides Ohio Auctioneer Exam Preparation course which is the first of its kind auctioneers exam preparation course.

About You

The Ohio Auction School is approved for Ohio auctioneer pre-licensing, Indiana auctioneer pre-licensing and CE, Louisiana auctioneer pre-licensing & CE, Kentucky auctioneer CE, West Virginia auctioneer pre-licensing, Virginia auctioneer pre-licensing, Texas auctioneer pre-licensing, Vermont auctioneer pre-licensing, Mississippi auctioneer pre-licensing, New Hampshire auctioneer pre-licensing, Rhode Island auctioneer pre-licensing, North Carolina auctioneer pre-licensing, as well as other states’ programs.

Additionally, if you live, or wish to practice, in the following states, The Ohio Auction School provides complete pre-licensing auctioneer education:  Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, South Dakota, Utah, Washington, Wisconsin and Wyoming.

What does a student of The Ohio Auction School learn? Not just to be an auctioneer, or a better auction clerk, or how to buy successfully at auction, but how honorable, credible and rewarding the auction profession can be. “That’s what they’re saying!”

About Us

The Ohio Auction School was opened in 1999 responding to numerous clients and customers of Mike Brandly, Auctioneer for such an institution. The Ohio Auction School provides not only auctioneer training, but seminars for auction buyers and sellers, product specific conferences, and auctioneer staff training for clerks, cashiers, ringmen and the like.

Students of The Ohio Auction School are taught by auctioneers and auction staff with experiences in the auction profession beginning in the 1950′s. Our staff’s experience ranges from various estate and personal property auctions, weekly automobile auctions to leading the largest Central Ohio real estate auction company’s practices. As well, instructors have experience selling livestock throughout the Midwest including many Jr. Fair auctions.