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How to enjoy an auction, and which common mistake to avoid

Auctions are everywhere today. They are online, in person at local venues, and in person or by absentee bid at the big places, like Rock Island Auctions.

eBay and GunBroker, local farm equipment at Farmer Joe’s barn, on-site home and property auctions, regional outfits like Cordier, and the big ones like Christies, Sotheby’s, etc. Many auctions to choose from, all following some auction format, each with some minor but important differences (warranty, returns, defects, descriptions etc).

Pretty much anything you might need, or as is more common, want, is available at an auction.

Auctions offer an opportunity to get things unobtainable in any other venue, except perhaps through specialized and usually expensive dealers. For truly rare and expensive items, an auction may be the only place to bid on them, before they are whisked away to the next private collection. Auctions are fun and potentially lucrative for the buyer, almost never for the seller, and are definitely lucrative for the auctioneer, who charges both seller and buyer.

Auctions used to involve travel, getting a bidder number (no small feat way back when), and sitting through often tedious hours of boring junk while waiting for your own magic piece of paraphernalia to come up.

Auctions today are mostly different, though you can always travel to that upcounty farm liquidation sale, if you want that local flavor.

The Information Age and modern hand-held technology have entered into most auctions. Almost every auction today has an online bidding option, even the local ones, through either their own website or through ProxiBid, a real-time PayPal-like intermediary between seller and bidder. Many auctions allow bidders to place absentee bids through faxes or emails.

Never before have auction bidders had so much convenience and flexibility.

And online bidding really is unbelievably convenient. No more standing out in the cold, or waiting hours for your particular lot to come up. You find what you want online, put in your highest dollar number in their software, and go about your life, waiting patiently to see the result. If you really want it, really gotta have it, then you can probably find one with the Buy It Now option.

With auction sites like eBay, you have the choice to put in your highest bid, and wait to see if it wins, or you can also participate in that last 45 seconds of the auction, when there is a flurry of bidding by people trying to snipe one another and put in the winning bid, without disclosing that amount ahead of time.

And this is key.

The purpose to this last-second-snipe approach is, by not filing your highest bid up front, you do not disclose your final willingness to pay, your maximum bid.

That keeps other bidders guessing about their competition up until the last second. You may end up with a good deal at low risk, but it is definitely a hands-on approach.

It highlights a critical rule about auctions: The worst mistake a buyer can make in any auction is to disclose (to anyone) what his willingness to pay is; that is, his highest or maximum bid, the highest bid he is willing to make on any given item.

Once someone has that number, they can and will use it against you, even though they might justify it as helping their client, the seller.

Even though this is an obvious mistake, it is nonetheless very common, because online bidding has changed the culture of bidding at all auctions, including live ones with an actual auctioneer calling out bids.

With online auctions, filing your highest bid ahead of time is a common practice, because it is so convenient. You plop in your highest number to the auction software, and walk away. If you win, you win, if you don’t, you don’t. You put your best foot forward and if you don’t succeed, that is OK, because you did not exceed your self-imposed limit.

Although this process is not transparent, for the most part it works for buyers. Probably because the stakes are usually too low to warrant the high risk to the seller or auctioneer manipulating the bidding outcome.

Modern online auction bidding is nothing like what auctions used to be, but this newfound ease and convenience also comes with a potential cost when it comes to live auctions. That cost is bidders will absolutely face fake bids placed by the auctioneer. As a result, bidders will see the price of their object artificially boosted well beyond the actual market demand, much more than would happen at a traditional live auction, and with even less accountability.

It is easy enough for live auctioneers to plant “shill” bidders and bids in their audience. In the blended world of live-and-also-online auctions, some auctioneers video record some, but not all, of the proceedings. Sadly, these recordings are laughably useless, but they give the veneer of propriety and accountability.

Bidders at live auctions today are dropping their guard, because the absentee bidding process in online auctions is now routine. Bidders assume there is no risk in this, no matter how high priced the item, because everything else they bid on goes smoothly in the online auctions. Yes, eBay has had some problems over the years, with obvious meddling by sellers in their own auctions, but those seem to be few and far between these days. And in any event, the prices and values were relatively low.

But what happens when you have a high-value item up for bid at live auction? Let’s say, a collectible gun, or an authenticated Persian rug, or a bona fide piece of rare art. These are items worth thousands or tens of thousands of dollars. With these numbers, there is a real incentive for the auctioneer or seller to manipulate the bidding process, to make the price go higher. They can take that absentee bid, your maximum, which should be held like a state secret, and they can create fake bids to get you up to your limit.

The problem here is that when you, the bidder, filed an absentee bid anywhere close to real money (thousands, tens of thousands of dollars), you violated the number one rule of bidding at auction: You disclosed the maximum amount you were willing to pay, ahead of time.

And now that the auction house or auctioneer has your highest bid in front of them, they can find “shill” bidders to post fake bids against you to artificially drive up the price. For you to prove they did this, even when it is obvious, you must file a legal complaint and pay an attorney to go through the discovery process. It is as easy as an auctioneer asking a well-known old dealer chum to throw in a few bids on an item, just to “help out.”

So our take-away is this: Do not file absentee bids for high-cost items.

Either participate in the auction in person, by phone, or through a buyer who is present in the room when the auction is being held.

To that point, I recently watched a video of an auctioneer and his assistant. This video was supposed to demonstrate the honest way in which the auction was held. Lots of gesticulating and interacting by the auctioneer and assistant. They were both dramatically acting on bids as if the room was packed and the bids were flying in.

Someone who was there told me the room actually held very few buyers, and all of them were hardened dealers. Overall there were very few bids, basically only one or two per item, for the entire auction. Few of the bids came from within the room, and most were absentee bids and phone bids relayed to the auctioneer by the auction house’s own employees.

But from the showman’s antics on the video, you would think a couple hundred buyers were seated there, every one of whom was waving their number.

How many absentee bids were artificially jacked by the showman on that day? How many buyers were shilled?

Auction buyer beware; file no absentee bids for real money (everyone has their limit, but mine would be anything above $1,000).

Participate in high-stakes auctions directly, or have someone else participate for you. But do not ever disclose your maximum bid to anyone, especially to the auction house. Because no matter what, it will be used against you, regardless of the empty promises made about how “safe” your bid is with them. Auction houses are in business to make money, and they will do that any way they can, and it is always at the buyer’s expense.

Japanese swords — caveat emptor

Taking breathers from political screeds may be rare here, but this is an oddball necessity. One cannot see bloodthirsty fakery and sit silently.

To wit: A lot of guys collect old militaria. Swords, bayonets, guns, helmets, etc. Cool stuff. Inspiring. Evocative of sacrifice and bravery.

Most of this rusty old junk is tough to fake, and even more to the point, pointless to fake, as the rip-off scheme costs more than the item is worth.

Except in the world of old Japanese swords.

The iconic katana and wakizashi have been sought after for decades as both extremely appealing for a red-blooded man to look at, and as artwork; refined craftsmanship that’ll easily cut off an arm. What normal guy wouldn’t be attracted to such art?!

For the past ten years or a bit more, a certain well known, popular, big auction site on the internet has been filled with many obviously faked Japanese swords and daggers. There were and still are some for sale in the past week and presently, hawked as “gendaito” in shingunto mounts. These would be valuable hand-made art blades holstered in relatively rudimentary war-time (WWII) scabbards that saw service in the field. If they were actually old and authentic.

But these are not authentic, historic blades. They were made recently and are being sold as old.

So sad to see such obviously faked signatures, and faked blades, set into authentic WWII mounts and carriers, with blazingly brand-new shirasaya! It’s an obviously winning combination, as buyers pay thousands of dollars for something worth a few hundred at most.

C’mon guys. Use your heads. Do your research. How many gendaito blades really made it out, after WWII? So many that individual sellers seem to constantly, endlessly pull them out like white rabbits from black hats?

Alarm bells not going off?

If your hearts weren’t telling you Yes, your eyes would be telling you “FAKE!”

Run. Run away fast from these too-good-to-be-true bargains with new handles, purposeful minor scuffs, and signatures so clearly punched in by a modern Chinaman, not a Nipon-To maker sitting cross legged eighty years ago.

If nothing else, demand NHTK papers with each sword. Or consider your investment wasted. Sorry to say.

This Public Service Announcement has been brought to you by a fellow dude.

Harrisburg Auction Does Well

With the moose head, elk rack, and bison skull in the back of my pickup truck, I can look past Guernsey’s poor organization that kept me and dozens of other buyers standing in line, in the heat, for no apparent reason.

Today’s bidding at the carousel on City Island was surprising. People were paying top dollar for every little item brought before them. Auctions typically have “nests” of buyers who are interested in particular types of things. Today, bidding was highly competitive across the entire audience and from all corners of the room.

Once again, Steve Reed may have screwed up, but it’s rare that screw-ups get redeemed so well. The cit
-tay is raking in big cash. Ironic as it is that the warehouse full of artifacts is literally in the shadow of the anchor, errr, incinerator.

I’m sad to see this part of our city’s history end. But if the address on the crate holding my moose is any indication, it’s a period and way of doing business we need to improve on in the future. The crate says :”To Brian Kelley, Museum, S 19th Street…,” which is the exact location of the city’s incinerator. What kind of a loony bin was being run here?

Harrisburg’s Wild West Auction

Internationally famous as my city is, it’s not because we were one of the first municipalities to declare bankruptcy. Rather, it is due to our former mayor’s penchant for collecting western frontier artifacts on the public dime.

Derided as a careless buyer with Other People’s Money, former mayor Steve Reed was hounded out of office for his investment of about $8.1 million of public funds in these western artifacts.

I had no idea how many he had purchased, and how keen his eye was, until I visited the warehouse where they were all stored last week. My God, the place was the proverbial and de facto Wild West Museum that Mayor Reed had long sought to build.

Everything in it was incredible. One of a kind, extremely rare, irreplaceable iconic artifacts symbolic and piercingly representative of our nation’s western frontier experience.

Mayor Reed was an incredible mayor, up until the point where he wasn’t. It took an international recession to take him down, and expose his over-leverage of Harrisburg. However, he was in good company in both the public and private spheres. And there is no taking away from Reed that he had one hell of a good eye for hostorically important artifacts. One of his former sellers was in town the other day at the auction, actually buying back the items he had originally sold to Reed.

He credited Reed with being a highly informed, careful buyer.

Allen Pinkerton’s personal detective badge just sold for $37,500 plus 25% buyer’s premium. A Dodge City Marshal’s badge just sold for $4,000. A historic Wells Fargo trunk sold for $15,000. These are historic, one-of-a-kind artifacts, bringing in commensurate prices.

I say job well done, Mayor.

As for me, I have done my part and bid on a multitude of items, only to lose at every turn. After bidding on Canada Bill Jones’s nasty little push dagger (Jones is credited with coining the phrase “But it’s the only game in town”), and losing, I did win a sad old elk antler, which had purportedly served as a hat rack in some western bar. But now I own a piece of the city history. It’s good enough for me, and the icing on the cake is that the city is raking in millions of dollars from the auction. The stuff Reed bought years ago was so valuable that it has increased tremendously in value.

UPDATE: I have just posted the winning bid for Steve Reed’s Wild West Moose, and I am so pleased. I am naming it Stephen.