[AT] Auction question
charlie hill
charliehill at embarqmail.com
Thu Aug 2 11:04:46 PDT 2012
I'm not an auctioneer or and attorney so I can't say specifically but I am a
certified appraiser. I can tell you that statue and regulation define who
the client is in our dealings. It is almost never the person who pays us.
The money might come to us from an agent of the client but ultimately it
is the bill is paid by a third party, generally speaking the borrower in a
mortgage loan transaction. A typical situation is company A calls me to do
an appraisal on property B for Mortgage company C and the bill is paid by
borrower D. In most cases Mortgage company C is the client but that is
not always the case. I doubt if it is that complex in an auction but my
point is that there is probably a regulation that spells out who the
auctioneer
considers to be his client. I'm also a real estate broker and I can tell
you for sure that there are strict rules on "agency", meaning who the client
is,
and it has to be spelled out specifically to all parties to the transaction.
The broker may be the agent for the buyer or the seller or both but it has
to be defined in the very beginning stages of the transaction and there are
considerable consequences to both buyer and seller concerning information
that may be confidential. Since auctioneers are often brokers, (they have
to be because they are selling land), those agency laws apply to them as
well.
This is starting to get off topic but needs some more explanation and it
might help someone here so here is a quick example. Let's say I list a
property and
I'm acting as a sellers agent. A buyer comes to me off the street and wants
to see the property. I inform him that I'm a sellers agent and give him a
pamphlet
about it. He agrees and I show him the property. Say the property is
listed for 150,000. The buyer tells me he wants to make an offer of 135,00
but he's willing
to pay the full 150,000 if he has to. I submit the offer and the seller
asks me if he should take it. I have to advise him no. I have to disclose
to him that the buyer
told me he is willing to pay the listing price of 150,000 and I can't tell
the buyer that I told him that. Bottom line the buyer should not have told
me. He is dealing with
the enemy and he's been warned.
Now if the property was listed with Broker B and I was the buyers agent I
would be prohibited by law from
disclosing that the buyer was willing to pay the full 150,000 but if the
seller told me (as a buyers agent) that he was willing to take 140,000 I'd
be required by law
to tell the buyer that. Where as if I was still the sellers agent as in
example one I'd be prohibited from telling the buyer that the seller would
take less.
I'm not even going to attempt to explain dual agency other than it's so
complex that an agent has to be half crazy or very smart to try to pull it
off without breaking
the rules and putting his license in jeopardy. This is from NC law. I
don't know how it works in other states.
Disclaimer: Now with that said. I'm not an active broker. I don't sell
property for a living and these agency rules seem to change about every year
so there might have been some change
that I have forgotten so don't completely rely on what I said above. Just
be warned to understand agency law in your state before you deal with a real
estate broker/auctioneer in a
land transaction. If I ever go back to work as an active broker or sales
associate I'll bone up on agency law before I enter into a transaction. We
are schooled on it every year in
a continuing ed course but if you don't deal with it daily it eventually all
starts to run together.
Charlie
-----Original Message-----
From: Charlie V
Sent: Thursday, August 02, 2012 1:20 PM
To: Antique tractor email discussion group
Subject: Re: [AT] Auction question
I agree with you on both of your points, Dan. Here in NY we have
probably more government control than in most other states and it is
way overboard. Bidders may also walk if they choose. I merely wish
to point out that much has been said about working for the seller.
When a hefty buyer premium is charged, it seems only common sense that
the auction service owes some small amount of consideration to those
folks making a good part of his paycheck (the buyers), at least to the
extent of sticking to fair business practice. I can not say first
hand if some of the practices I have I have read about in this thread
happen in NY, but they seem quite a ways from fair business practice.
Many states do not require auctioneers to be licensed so practice may
vary widely. I once had a friend who was a working auctioneer as well
as a licensed real estate broker. He kept very much on the straight
and narrow, knowing that folks from the state Attorney Generals office
were never far away. Some regulation is not always a bad thing.
Just my opinion.
Charlie V.
P.S. If a robber walks up to someone and advises he is about to steal
all of their money, and the intended victims do not run away, does
that make the theft all O.K. and legal????
On Thu, Aug 2, 2012 at 8:15 AM, Dan Glass <dglass at numail.org> wrote:
> I have to respectfully disagree. Auctions can charge 50% buyers premium
> if they want to, I don't have to participate in that auction. It seems
> to me that every time the government gets involved we lose something.
> We try to make something better and the government always makes it
> worst. If people opted out of the auctions the auction company would
> change to accommodate the buyers. After all, 15% of nothing doesn't
> amount to much.
>
>
> On 8/2/2012 7:56 AM, Charlie V wrote:
>> With many auctions demanding a 12-15% buyers premium, it would seem to
>> come into question who the clients really are. The seller may
>> contract the service, but the buyers are picking a hefty piece of the
>> tab. It seems that a thorough review by ethics boards and state
>> legislatures may be in order now.
>>
>> Charlie V.
>>
>> On Wed, Aug 1, 2012 at 11:47 PM, Mark Greer <markagreer at embarqmail.com>
>> wrote:
>>> They auction farms around here that way all the time. Offered in parcels
>>> and as a whole and its anyone's guess which way it might end up selling.
>>> Sometimes after taking bids on the parcels, and then bids on the whole
>>> farm, they'll even allow the parcel bidders to get together and up their
>>> bids to beat the price for the whole farm.
>>> Mark
>>>
>>> ----- Original Message -----
>>> Mike,
>>> An auctioneer trying to get the most amount of money for his client. I
>>> don't
>>> think I would consider that practice very ethical. He has wasted two
>>> bidders
>>> time. I don't think I've ever seen that done at any auction I've been
>>> to.
>>>
>>> Dean Van Peursem
>>> Snohomish, WA
>>>
>>> -----Original Message-----
>>> From: at-bounces at lists.antique-tractor.com
>>> [mailto:at-bounces at lists.antique-tractor.com] On Behalf Of Mike
>>> Meulenberg
>>> Sent: Saturday, July 28, 2012 8:38 PM
>>> To: at
>>> Subject: [AT] Auction question
>>>
>>> I was at an auction today, and the way they sold one item was new to me,
>>> maybe some of you can shed some light on why they did it this way. Up
>>> for
>>> bid was a nice Kubota 4x4 tractor that was billed as coming with a 3
>>> point
>>> backhoe. The backhoe was a nice Woods unit. So first they auction off
>>> the
>>> tractor, it brought 17,500. Then the backhoe, it brought 2100. Then the
>>> auctioneer said he was going to sell the package of tractor and backhoe
>>> together, and opened the bidding at 20,000. Only one guy bid the 20K and
>>> it
>>> wasn't the guy that originally bought the tractor for 17,500, or the guy
>>> that bought the backhoe attachment for 2100. Why would they do something
>>> like that, why not just auction the package in the first place. Oh,
>>> before
>>> he opened bidding on the package he offered both the buyer of the
>>> tractor
>>> and the backhoe a chance to sweeten their bids, neither did.
>>>
>>> Mike M
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