Most people are familiar with the way that auctions work. An auctioneer typically stands before a crowd of people with an item for sale and starts the bidding at a certain price. Those who are interested in buying the item then let the auctioneer know how much they would be willing to pay for said item based on the bids that are thrown out by other interested parties. This continues until there is only one bidder remaining with a bid that others are unwilling to match. The highest bidder wins the right to pay for the item and take it home with them.
Nevertheless, what most people might not know is that there are actually different types of auctions that can be held. Let’s take a look at several of the most common types of auctions.
The is the type of auction that was just described above. During an absolute auction, an item, a piece of real estate, or something else is auctioned off and sold, regardless of the final price. The seller is not concerned about whether or not that final price hits a certain mark, so it’s usually the most exciting type of auction to be involved in, since interested bidders don’t have to worry about a starting minimum price or the end price not being high enough for the seller. It generates a lot of competition among bidders and gets people interested in trying to buy an item.
Minimum Bid Auction
During a minimum bid auction, a seller begins the auction at a certain minimum price that they would accept for an item, a piece of real estate, or something else. They do this to ensure that they receive a certain amount of money for whatever item they are selling. The problem that bidders run into is that they might be priced out by whatever the minimum bid is. However, it’s beneficial for many sellers since it guarantees that they will get a certain amount of money, though they do run the risk of not getting any bids if their minimum bid is set too high.
A reserve auction involves a seller coming up with an ideal price that they would want to get for an item, a piece of real estate, or something else and not disclosing it to potential bidders. If the auction fails to reach the reserve price, sellers then have the chance to negate the auction and to not accept any offers. This turns some potential bidders off since they aren’t guaranteed the chance to buy an item even if they win an auction. Nevertheless, it gives sellers the opportunity to get close to what they want for something or to pull out of an agreement with a bidder if they don’t feel they are getting what their item is worth.
Wilson Auction & Realty Company can help you stage whatever kind of auction that you want. Whether you decide to go with an absolute auction, a minimum bid auction, or a reserve auction, we have the resources to help you pull it off. Call us at 419-636-5500 today to find out more about the different types of auctions.