QUESTION:
Have you ever had a "no show" or "flop" auction?

ANSWER:
This lingering doubt in the minds of many potential clients of whether anyone will show up for an auction indicates one of the most common misunderstood points concerning a properly conducted auction. After offering an enticing advertising campaign to promote the property within the market place, including privately soliciting the interest of as many potential buyers as possible, the auction invariably has the potential of drawing interest from four groups of bidding participants. They are: "the buzzard", the investor, the user and the impulse bidder.

The Buzzard - The first type of buyer present at an auction is the buzzard", the professional buyer or speculator, who always comes to any properly conducted absolute auction. These buyers are interested in any property at their price and plan to immediately resell it for a profit. If this type of buyer is confident that the property will sell with no minimum or reserve to the highest bidder on auction day, they will be at any auction and serve as the safety net of the auction. If it is going "to be stolen" in their opinion, they will "do the stealing" and fight among themselves, which will carry the bidding upward.

The Investor - The second type of buyer present at an auction is the investor. This professional will pay more then the buzzard since the investor plans to utilize the property over a longer period of time as an investment either for rental or speculative purposes.

The User - The third type of buyer is the user. This buyer has a specific use, personal or business need, for the property. The urgency of an auction, many times, awakens this desire which may not surface at all through a private treaty effort. The user will pay more than the buzzard or investor since the user's needs are much stronger with an actual personal or business need for the property. Although the user would like a bargain, this bidder is usually prepared to pay fair market value at an auction since they are not buying it for resale at all.

The Impulse Bidder - The last type of buyer is the impulse bidder. This buyer has given no advance thought to value or need and usually, bidding strictly on emotion with no purpose or direction, will pay more than the other three groups.

The second and third group of buyers (the buzzard and the user) consists of people interested in the property, ranging from a cool to a very active interest. The fourth group of buyers (the impulse bidder) involves the individual bidding strictly on emotion with no real desire for the property. All four groups do not come to every auction conducted, but the first type of buyer, the buzzard, will always come, while the other three types of buyers will come only if they are in the marketplace.

The attendance of each group, excluding the buzzard, depends on the market demand for the property itself. The results of a properly conducted auction, therefore, rely heavily on the actual interest within the market place. Auctioneers cannot turn a mule into a race horse but they can sell either animal for its true market value.