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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.

Despite digital technology advances, actual humans are necessary

Digital technology is amazing, no doubt about it.

Yes, it enables all kinds of speed in research and communications.

But the internet has also inspired a “digital wall” response to basic inquiries that used to be handled by people answering phones.  You cannot just pick up a phone and ask someone a question, any longer.  Instead, you must navigate a maze of circular questions and answers and phone tree options, long before you get to hit the star key or number one and talk to a person.

eBay is the prime example of the digital wall.  You cannot get real customer service at eBay.  eBay’s digital artificial intelligence is supposed to satisfactorily respond to all customer issues, but it doesn’t.  It is a failure.

One online commenter says “It is easier to talk with the Pope than to actually speak with a person at eBay,” a sad but true fact that I myself have learned the hard way.

Here in Pennsylvania, the Tom Ridge Revolution for responsive government is looong over.

Remember how back in the 1990s, Governor Tom Ridge opened up Pennsylvania state government with a crowbar and a box of dynamite, and got the scurrying inhabitants of the many faceless concrete government buildings in downtown Harrisburg to actually view taxpayers as “customers”?

Maybe you don’t recall that time, but it was refreshing.  Suddenly, state workers at most agencies were required to actually answer the calls of the taxpayers they serve, and to act professionally, and to help resolve problems.

PennDOT was at that time a notoriously labyrinthine experience, kind of like the Vatican, one might guess, in that if a taxpayer was fortunate enough to find an IN door, they might spend a day shambling down shuttered halls with closed doors with jargon printed on them, searching yet more for the answer to their government-inspired problem.

The workers there at that time could not have cared less for serving the public, and no one took any initiative to make them serve the public, until the Ridge Administration arrived.

Then, PennDOT was required to post phone numbers, email addresses, have customer service representatives on call, so that no citizen had to waste their time trying to make sense of the bureaucratic maze while to trying to meet some official mandate.

After all, if the government is going to require something, then the government absolutely must provide the means to achieve that.

Well, now PennDOT is back to its bad old ways.  The foolish young punks running the disastrous Corbett Administration into the ground at Mach 4 wouldn’t know a damned thing about customer service or taxpayers, for that matter.  PennDOT has been allowed to crawl back under a heavy cloak of secrecy and impenetrable darkness.  Go ahead, call PennDOT.  Try to reach a human being through their main portal:

“Call 1-800-932-4600 (from within PA) or 717-412-5300 (from out of state). You can also send an email through our Driver and Vehicle Services Customer Call Center, or write to the following address:

Riverfront Office Center (Driver and Vehicle Services)
1101 South Front Street
Harrisburg, PA 17104-2516
1-800-932-4600

Oh, you will hear a human voice,  which right off the bat asks you that if you want to continue in English, “Press One.”  Imagine my surprise when I just held the line, did not press one, and was shuttled off into yet another maze of foreign languages, as if just wanting to encounter my own government in our native language was something we should have to ask for.

Anyhow, the phone options in English are another maze of options and circular loops.  One answer gives the locations of  service centers, but saves providing you with the hours for each one until the very end, as if you might actually recall which service center was “one,” “two,” or “three.”

This is the very essence of Bad Government.

Government absolutely must be responsive, open, transparent, or it is illegitimate.  If it cannot serve its citizens and taxpayers, then government has failed.  Once government has failed, it cannot hold citizens to a higher standard.

Governor-elect Tom Wolf faces a Republican legislature, which is not likely to go along with his tax-and-spend approach to government.

Well, here is an opportunity that is guaranteed to make Wolf a hero among all citizens: Force government to open up again; get our taxpayer-funded bureaucrats to be responsive, or get out.  No more digital walls for the people who pay the bills.

And maybe Wolf can talk to the owners of eBay, and persuade them to provide real customer service, too.