Despite what you are reading and hearing, auctioneers who endeavor to maximize the seller’s position are loyal. You can ignore any auctioneer who is fanatical about all their auctions being “with reserve” (especially “subject to confirmation”) suggesting the opposite.

Loyalty involves putting the client’s interests above your own (and anyone else’s) as we’ve written prior. When an auctioneer conducts a “without reserve” (absolute) auction, coupled with the appropriate marketing, this is the definition of loyalty for sellers who want to maximize price.

An alternative to absolute auctions (projecting the prospect of a deal) there are also auctions with reasonable — academic — minimum bids, which also project the prospect of a deal with a disclosed reserve.

Some auctioneers need to learn that you the auctioneer don’t determine the price; you have to maximize the bidder pool, thus maximizing the chances of having “alpha” and “beta” which then results in maximizing price: https://mikebrandlyauctioneer.wordpress.com/2021/12/03/auctions-and-the-chances-of-alpha-and-beta-etc-2/.

What are the key ingredients to maximizing the bidder pool?

1. Bidders sense there is the “prospect of a deal” (a chance for a deal) by either selling absolute or with a published minimum bid.
2. Bidders respond to more disclosure, clearly not less. Therefore absolute auctions need to be clearly advertised in that fashion, and academic minimum bids need to be expressly published as well.
3. Two corollaries relate to (1) and (2): a. “The lower you start, the higher the final price,” b. “You can’t start where you want to finish.”

Your auctioneer who is suggesting less disclosure helps with more bidders and higher prices is not being loyal. However, if that’s what the seller desires, I don’t begrudge any auctioneer for trying to help; if the property sells — even better.

But don’t tell me (as there’s no proof anywhere) that the final bid price wouldn’t have been higher with more disclosure and therefore a larger bidder pool. There is absolutely no evidence that less disclosure and no chance for a deal drives more bidders to participate.

No auction bidders are trying to pay as much as possible. We wrote about this nonsense here: https://mikebrandlyauctioneer.wordpress.com/2023/11/27/not-looking-for-a-possible-deal/. It’s the “prospect of a deal” that somewhat ironically results in the highest prices.

For those auctioneers who don’t believe auctions result in market value, and don’t believe any property is only worth what someone is willing to pay for it, we asked if your sellers should even sell at auction: https://mikebrandlyauctioneer.wordpress.com/2024/02/29/you-believe-it-then-you-dont/.

Lastly, we recommend you carefully choose your auctioneer and be on the lookout for one who focuses solely on what could go wrong. https://mikebrandlyauctioneer.wordpress.com/2021/06/07/anomalist-auctioneers/. Your auctioneer should — at minimum — discuss what could go right, and comprehensively explore risk versus reward.

Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at Mike Brandly, Auctioneer, Brandly Real Estate & Auction, and formally at Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.