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When you are looking for your next big find at your local Calgary auction house, follow these tips to keep from getting burned.

A little bit of research before ever setting foot in the auction mart is a must. You should have a good idea of what it is you are looking for, average costs for the item and potential problems that you should keep your eye out for.

If you are looking for a new vehicle, check your local paper for some prices. Pay attention to how many kilometres are on the vehicles, and how it is affecting the price. Remember that these ads are mostly for vehicles that haven’t sold. Just because a truck is $15,000 in the paper, doesn’t mean it’s worth $15,000. Some auction companies will have a copy of the Canadian Black book available for sale. Their are two books available, one for automobile wholesalers and one for the public. The Wholesale book is values from what similar vehicles have sold for at auction and the public book is a blend of wholesale and retail pricing.

Also take into account that when buying a used vehicle, especially from an auction, that their may be minor issues or repairs needed to the vehicle. Some of the easy things to spot are visible in the tires. Does it look like it has lots of tread left? Is the treadwear even all accross the tire? When you start it up is their smoke coming out of the exhaust? Does the motor run smoothly or does it have a shake in it. While these things are not a definitive diagnosis they will lead you into either staying away from a vehicle, or having a professional take a look at the vehicle before you buy it.

Most auction companies get their inventory from consignors. Sellers bring in product for the auction company to sell, the auction will then take a percentage of the sale as a commission. The auction company doesn’t always know if a product is in need of repair or not. It is up to the buyer to inspect an item before placing a bid on it. I have been to auction sales where most of the items were tested and the auction company had written any deficiencies right in the catalog description. This is a best practice as it allows buyers to bid with confidence that the item they are buying is in working condition.

With respect to Real Estate auctions, the properties are usually opened up for 4-5 hours a day, for a few days prior to an auction sale. This time is reserved for bidders to inspect the property and have a home inspector come through and verify the condition of the property. The inspection period also gives buyers a chance to find out all of the details that they may need in order to arrange financing on the property. When it comes time for the auction sale, all buyers have had an equal opportunity to inspect the property and are on a level playing field when it comes time to buy.

Some general merchandise auctions will usually have a viewing period ethier the full day before the auction and/or the morning prior the auction sale. This is the time when buyers can look through all of the boxes of miscellaneous items to find the hidden treasures. As most of the products are used, it is the perfect time to have a look through all of the items you are interested in and to check for any damage.

So, you have now inspected the item and have decided it’s something that you must have in your possession… Here’s some tips on how to bid and setting your limit. Here is where all of the research you did is going to pay off, you’ll know exactly what your item is worth on the retail market and you’ll be able to figure out what you are willing to pay at the auction. Typically I set my limit at 70% of a retail price, often I will be able to buy items at less than that and sometimes because a hot item is not available in stores I have paid more than a retail price. (remember that whole Tickle me Elmo thing.) Most people will tell you to set a limit and stick to it… I disagree, I use the limit+1 rule. Often, you will be against another bidder that has the exact same limits as you and if you both stop at your limits, you will only be able to purchase half of the items you intended on. The benifit of plus one is when you are against another bidder with the same limits as you, you will be achieving all of your buying goals while they are going home empty handed.
If an item has a retail value of $100 and the auctioneer is going up in $5 dollar increments, My limit will be $70 for the item. If my competition also has a limit of $70, I may have to bid $75 to get the item. Sure, I spent more money than I wanted to, but I still bought the item for 75% of it’s retail cost and I get to take the item home. My same limit competitor has left the sale with nothing but a wasted day.

People often ask me how they should bid at an auction. While professional auction buyers use different psychological tactics for bidding, here are some of the most common traits found in most techniques.
-Start the bidding high. If you wait for the auctioneer to get down to the bottom, you will invite more competition. If the bidding starts too low, everyone will be bidding and the final sale price is usually high.
-Be agressive with your bidding. If you are fast with your bid it applies all of the pressure to your competition, most buyers feel pressured and have two options to remove the pressure; Bid or not Bid. If they bid and the pressure is automatically re-applied to them, they usually resort to the option of not bid.
-Don’t cut the bid. Some people think this is a way to get an item for less money. It is really showing your competition that you are weak. The only time that you should cut the bid is if you are actually at your maximum limit.
-Have fun. This is the most important part of the auction. Many people will attend an auction as a social gathering. While it is a very intense, competitive and actioned packed business, the people are very friendly and there is always someone willing to help a newcomer.

 

22 Feb 2014

Buying at the Auction

Author: robbleece | Filed under: Uncategorized

Here is a story by Mario Toneguzzi from the Calgary Herald

A welcome reminder that the Calgary Stampede is within sight, the annual chuckwagon canvas auction has become known as a reliable measure of the Calgary economy. And if early interest bears out, the city is in good shape.

“The auction is always a bellwether of what Calgary, and for that matter the Alberta economy, is doing. And we are really, really pleasantly surprised,” said Mark Damm, chairman of the Calgary Stampede chuckwagon committee.

“There seems to be a general uptick in a lot of the sectors. And because it’s the (Stampede’s) Centennial and the significance of that event . . . there’s a lot of new players coming to the auction.”

Since 1990, companies have paid millions to sponsor drivers participating in the GMC Rangeland Derby held during the 10-day Stampede.

This year’s auction takes place March 29 at Stampede Park.

Last year, the auction raised $2.84 million, or an average bid of about $79,000. Kelly Sutherland, known as “King Kelly” in chuckwagon circles, drew the top tarp bid of $170,000 from YaYa Calgary.com.

Sutherland, who’s collected a record 12 Rangeland Derby wins, is no stranger to top-dollar bids. The $210,000 paid for his team in 2008 remains a record. The best take from one auction was $4 million in 2007.

“Now, whether or not a record is in reach or not, I think 2007 was an real aberration,” Damm said. “It was just all the variables fit into play that one particular night. We had a bunch of new bidders in the room and that bid everybody up.

“I don’t think it’s realistic to be shooting for that. But are we going to be top five, maybe even top three, auction that we’ve ever had? Absolutely. It’s looking really positive.”

Damm said he expects 240 to 260 registered bidders for the March 29 auction.

Damm said a number of companies have formed consortiums, thinking the cost of a wagon this year could get out of reach for some.

“What we did a few years ago is we changed up our rules and allowed up to 10 entities to own a particular canvas,” he said. “That caught on slowly, but it’s really picking up steam and we’ve started to see more advertisers going together.”

Lorraine Jones, president of the Chickwagon! Foundation for Women, said the organization has sponsored chuck-wagon tarps for 13 years.

The expectation this year, the Stampede’s 100th, is that the bid floor will be crowded, said Jones, whose Rangeland Derby partner the past six years has been Heninger Toyota.

“It was interesting last year. There were a lot of new corporations that bought tarps and a lot of the tarp owners that had bought for years and years before were not present. The tarp auction is always really interesting.”

That’s especially true for the drivers.

“I’m hoping that we can break an all-time record, but whether that happens I don’t know,” Sutherland said. “I’d be very happy with an increase of some sort over last year, which was an increase over the year before.

“Certainly if you sell high, there’s added pressure. . . . I hope there’s people there with some big budgets.”

Chuckwagon driver Jason Glass said he expects good numbers from this month’s auction.

“With the Centennial and the Calgary Stampede working very hard to promote the Centennial year, it’s going to be exciting,” he said.

David Finch, an assistant professor of marketing at the Bissett School of Business at Mount Royal University, said the canvas auction is about status and prestige for sponsors, rather than a consumer-oriented investment.

“It’s all about building equity amongst a very targeted audience as opposed to a traffic-driving type of promotion,” Finch said.

“When you look at the type of organizations that invest in it, it’s a very targeted investment. It really talks about commitment to the community, commitment to the tradition and the history of the Stampede.”

20 Mar 2012

2012 Calgary Stampede Canvas Auction

Author: robbleece | Filed under: Uncategorized

On the lawn or online, auctions are taking place in communities large and small across the country, with more than a quarter-trillion dollars in assets and goods being sold via auction every year in North America. One of history’s oldest forms of commerce, dating back more than 2,000 years, auctions continue to be the quickest and the most effective means of price discovery today.

However, auctions continue to be plagued with misconceptions in today’s marketplace. Auctioneers are far more than just fast talkers. We’ve heard it before from naysayers who say, “Selling at auction is selling at a discount.”We’ve also heard the rumors that auctions “only exist for selling distressed property” and “only junk is sold at auction.”

As unfortunate as these rumors are, what concerns our proud auction professionals the most is that no one questions the market value attained when rare, one-of-a-kind works of art are sold for millions of dollars at auction. No one doubts the prices achieved when luxury homes are sold at auction. No one questions the method when celebrities sell their personal items at auction. However, the mere mention of selling homes, commercial property and other assets through the competitive bidding of an auction creates immediate doubt and uncertainty.

The auction process is straight forward, but perception often clouds reality. An auction is simply a public marketplace where items or property are sold through competitive bidding with the highest bid winning the rights to own. Only at an auction will the marketplace (buyers) tell you what they are willing to pay—no more, no less. If it is perceived as being of more value, competition continues. If the maximum value has been met, bidding ends.

Auctions ultimately force buyers to be decisive. While auctions are used to dispose of distressed assets, most people fail to understand why assets are sold at auction. Auctions provide the speed and efficiency needed to complete transactions while returning the highest dollar value. The “For Sale” sign languishing in the yard today does not force or motivate buyers to purchase. The sign will be there tomorrow and most likely the day after, but with a Real Estate Auction a for sale sign will not be posted after auction day.

If you have any questions about Calgary Real Estate Auctions or Calgary Real Estate in General, please don’t hesitate to contact me.

15 Feb 2011

When did Auction become a Bad Word

Author: robbleece | Filed under: Uncategorized