Your Questions & Comments

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Answers to the most common questions can be found in my following articles:
Auctioneer Bidding… Is it Legal?
Auction House Bidding & Selling
Auctioneer/Seller Withdraws an Item with Bids. Is It Legal?

Of course, there are many other articles and I would like to encourage you to read them all.

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1,243 Responses to Your Questions & Comments

  1. Chad Helms says:

    I attended a Real Estate auction yesterday at my directly adjacent neighbors property. The sale was for the house and five acres of woodland surrounding it. There are another seven acres of woodland between our property and the tract (with the house that was actually sold) that are also owned by the same seller. It was all one property until recently it was surveyed and split in order to sell the home and five acres. (There is a five acre minimum split in our township) I have been in contact with the owner, and have been verbally promised first opportunity to buy the seven acres that is directly adjacent to my property (and between us and the new owner next door) when they decide to sell it, but they supposedly are not ready to sell it yet.
    Well, I went to the auction yesterday to see what the house would bring, and the auctioneer announced in his opening that whoever bought the house would have first dibs on the woods that I was recently
    and repeatedly promised the first opportunity to buy. The woods was NOT advertised as being up for sale in the auction advertisement, but was displayed as a survey on the information board at the auction as “Exhibit B” (alongside “Exhibit A” which was the advertised house at auction) Except for the auction board itself, the woods has NEVER been advertised for sale. It wasn’t auctioned with the house yesterday, because ONLY the successful house bidder has a right to buy it at this time. It was mentioned as “for sale”by the auctioneer before the house sold though.
    The auctioneer is effectively offering the woods for sale at a term or condition that is not available to all. It appears that this is a direct violation of the Fair Housing Act. He is also “selling” a significant item (7 acres of woods) that he did not advertise.
    Besides my verbal contract being breached on the purchase of the woods, am I (and others at the auction) being discriminated against in this sale ? I have read all of the auction law information about “tying” and “bundling” as being an often used illegal practice, but does it apply here ?
    Any feedback would be appreciated !

    • Auction Law says:

      First, a so-called “verbal contract” is not enforceable for any item that exceeds $500 and this especially applies to real estate.

      Concerning “tying/bundling”… you indicated that the purchaser was give the option. They were not required to buy the other property, which would be “tying” the sale to purchase one with the other.

      As far as advertising, while advertising is advantageous to attract inquiries, there is no requirement that anything be advertised. If you want to sell your property to your friend and you both agree to a price, you can certainly do so. There is no requirement for any property to be advertised prior to selling it.

      • Chad Helms says:

        Thank you for your fast reply. I am grateful for it !
        I apologize for my misinterpretation of “tying.” I guess what I was thinking of is a sort-of “reverse tying” if you will, for lack of a better term.
        I would like to politely ask if you could elaborate a tiny bit on my suggestion of discrimination in this case.
        My argument here is that the auctioneer used this “promise” of first opportunity (to purchase the second property) to induce a higher sale price of the first property, (therefore likely reaping more cash for himself and the seller) but, more importantly, changed the terms and.or conditions for all other buyers interested in the second property.

        In other words…..ONLY the buyer of the first property has the option to buy the second property at this time, but no one else is being offered the same. Isn’t that offering different terms or conditions to only one buyer, and excluding all the others ?
        Yes, everyone had the right to win the live auction at hand, BUT, the second property was not offered at auction…..only for private sale, and ONLY if you won the first auction.
        Taken from the Fair Housing Act language: “Types of discrimination include: Setting different terms and conditions for the sale or rental of a property.”
        Again, any reply would be greatly appreciated !

      • Gwyn Besner says:

        Only illegal discrimination is illegal. If the auctioneer or seller refused to sell to you due to race, color, religion, age, national origin, familial status, sex or disability it could be deemed to be illegal discrimination.

  2. Sean Novick says:

    My son won and paid for sports tickets at a silent auction. The seller could not transfer the tickets to my son, so he missed out on the game. Does he have a legal right to get a refund?

  3. Chad Helms says:

    @Gwyn Besner…..The seller of the property was a single woman and has owned the property since 2007. The buyer of the property is a woman that was alone…..Marital Status unknown. The second highest bidder (or the “back bidder” as some call it) was also a woman that was alone…..Marital Status also unknown.
    There were only three registered bidders for the auction…..two women and one man. (BTW…..I was NOT the registered man because I was not interested in the house. It brought $254K, was appraised at $179K, and I would have had to ultimately spend over $254K to have a chance to buy appx. $25K worth of wooded land…..IF it was offered to me as a “man”) That would be a little silly.
    The two registered women bidders were the ONLY ones who bid. Because of only three registered bidders, two being female, it was TWICE as likely for a woman to win the auction as it was a man. This was known by the auctioneer BEFORE the announcement was made that the second property would only be offered privately to the auction winner. It is also possible that there was woman to woman discussion with the seller to make this contingency.
    Sexual discrimination ?
    I’m not trying to make something of this that it isn’t, but legitimately asking your opinion. Please think about how you would feel if the genders were reversed.

    • Gwyn Besner says:

      If you truly believe you were discriminated against due to your gender, no words I can say will change your mind. File a complaint with HUD. Let us know how that turns out. Fair housing complaints can be filed with HUD by telephone (1-800-669-9777), mail, or via the Internet.

      • Chad Helms says:

        A sincere thank you for your input. You have been helpful. At this point, I think it’s possible but i’m not sure. That was the my whole point in getting other opinions. There are sometimes things that happen that none of us like, and we cannot change. I haven’t lost sight of that. That wouldn’t be realistic.
        Sometimes it just is what it is. Thanks again.

      • Auction Law says:

        Sexual discrimination? It appears that you are trying to make something of this that isn’t. You stated that everyone at the auction had the option to purchase the second property if they were the winning bidder. Hence, the option was offered to all that attended and under the terms of the auction. It sounds like you are looking for something that isn’t there.

        Again, a verbal or written offer is not a contract and a seller does not have to sell to anyone until a meeting of the minds takes place and a written contract is accepted by both parties.

  4. Dave says:

    You replied to the “bidding against yourself” question. But I did a phone bidding for the first time for an out of state auction rather than online or live. When the bidding started, I tried to convey specific amounts to the person on the phone, but she was not taking it or understanding. So instead, she kept coming back and asking me for yes or no and the item was bid up and I won. Later, when I went online to peruse some other items at the auction they had the bid history and it looked like the last several bids was myself bidding against myself. The reserve had already been broken much lower.

    I understand that a bidder might bid up a price quickly to discourage other bidders, which is a reason to allow bidding against yourself. But in my case, I understood the phone contact to be returning to me for the next increment as I had been outbid. If I wanted to bid up the price quickly I would have just provided the higher bid price. Do you think there is any recourse? It seems clear that the bid history had the last three bids all from me.

    • Auction Law says:

      It seems that you have only provided reasons why attending live auctions are a better option than online or absentee bidding. As you were not there, you are only attempting to guess at what might have happened. I’m not familiar with the software they were using, so I couldn’t respond to the “bid history” shown on a website or how they handled phone bids or other absentee bids vs. live bids or online bids. I could speculate on a number of scenarios that might have occurred, but that could be an exhaustive list of possibilities. That said, one that could be considered is that there were other live bids, phone bids and/or absentee bids being accepted so quickly that the online clerk may not have been able to execute each one in the computer due to the fast pace of a live auction. In such case, the “bid history” may not be an accurate portrayal of what occurred. Again, this is only speculation and without being there or having more information, there’s no way I can really offer much insight to this scenario.

  5. Robert Marshall says:

    I was on a phone bid for a live auction that was simultaneously online. I have done online and live, but first time by phone. When I was called, I asked for the bid increments at certain range but that was garbled and the auction began. During the bids, I tried to convey dollar amounts I intended to bid, but the person on the phone did not seem to hear or accept them and simply wanted a yes to the inquiry (or silence/no to indicate I was out). So I began answering yes to her inquiries with the understanding that I had been outbid and she was asking if I was in at the next increment. I won the lot.

    I then went online to look at some additional items for bid and the auction website had the bid histories. It appears for the last couple bids, I was bidding against myself. I understand bidding a price up high quickly to discourage other bidders, but in this case I would have simply provided a dollar amount to take it to a higher level, like I tried to do. Any recourse? I was happy to get the item and it was in my range, but this really left a sour taste in my mouth as it would not have happened had I been either live or online, so I feel taken advantage of or misled by the phone contact, even if that was not her intent. The reserve had already been breached.

    • Auction Law says:

      It sounds like you and Dave were bidding at the same auction or you are Dave… see my answer to “Dave” in the previous comment.

  6. Chad Helms says:

    @Auction Law….I believe you are completely correct in your response. My last post may have suggested to some that I was leaning this way. I see your point as far as equal opportunity in the auction, but this would be easier to digest if outright dishonesty on the sellers part wasn’t present.
    I don’t know what part of the country you are from, but in the rural, low density population area i’m from, 99.9% of people are honest, and you can trust them for their word…..especially when you have resided beside them for several years with mutual trust and without conflict. That’s why I choose to live here.
    When you find that .1% that isn’t, it’s hard to accept…..especially over something as significant as this situation. Money does strange things to people.
    Hopefully, the new owner isn’t the outright liar that the seller ended up being. One thing is for sure…..I can’t do any worse with my new neighbor.
    As for the seller, Karma will prevail. It always does. As my late father always said “What comes around, goes around.”
    I don’t need ANYONE to tell me what is right and wrong, but occasionally what is technically and LEGALLY right and wrong on occasion. This situation was, without question, the very definition of dishonesty. Unfortunately, dishonesty is not illegal.
    Most reading here would not care or understand, but the future of this adjacent property in question could affect the value of mine by tens of thousand of dollars, due to it’s potential aesthetic changes.
    After reading the opinions here, it is apparent that what was done has no recourse that is legal.
    A huge and sincere thank you to all who responded to my posts !

    • Auction Law says:

      Honesty has absolutely nothing to do with location, whether rural or urban. By the same token, 99.9% of the laws are based in honest dealings.

      While money may do strange things to some people, there is nothing dishonest about a seller wanting the best price possible for their property. Of course, from the other side of the bargaining table is the buyer that hopes to get the lowest price. In a standard negotiated sale, it may be the seller that loses value as they set the limit by their asking price and the buyer usually negotiates it down. That is also why many choose the auction method of marketing to sell their property.

      If it was your property, I’m sure you would see things from a different perspective. Despite what someone may have told you they would do, without a contract it is little more that talk. That doesn’t make them a liar. It only means their resulting decision was made after careful thought and possibly consultation with a professional.

      • Chad Helms says:

        I hear you. I would definitely want the best price possible for my property.
        Unfortunately, we never got to talk about price. There was no “other side of the bargaining table”…….it never got that far. I would have been more than happy to buy the property at auction if it was offered alone and would have been willing to pay considerably more than it is worth…..but define “worth”, right ?
        I’ve always said that an auction is a true appraisal for something at a given time.
        Next to no one in this area would give more than $3K an acre for wooded wetland, but I would have, in this case.
        I wouldn’t have such a problem with this if the seller had rejected an offer that I had made in hopes of negotiating a higher selling price. That would be completely rational.
        It would have been nice if the seller had at least let me know ahead of the auction that she had changed her mind about offering it to me at all. I had to go to the auction to find out, or I would STILL not be aware of the change. Since I had no intention of buying the other property, I almost did not go to the auction, knowing that the property I wanted was already promised to be offered to me.
        “Nothing more than talk” is right. Dishonest talk.
        Again, there was no talk of dollar figures here, so there was no financial motivation for the seller to offer it to someone else.
        You can call it what you want, but what happened here was nothing short of shady.
        As for my perspective, no, it wouldn’t be different, because I would have kept my word to my neighbor, or at the very least been personal, open, and honest before the auction about any changes that were made.

      • Auction Law says:

        I found your response to be a bit funny, as you claim that no one but you would have paid more than $3K/acre for the property. However, in your previous post you pointed out that the other property was only appraised at $179K, but brought $254K. As far as what someone “owes” you based on something they said in the past, that is also the reason for contracts. What you thought they meant and what they thought you were asking them to do, may not have translated properly. A written contract is used to ensure such things are understood by the offerer and offeree, but it’s not any good until both have agreed and signed it.

  7. Sandra Landwehr says:

    I live in the state of MN where nearly every Auctioneer charges a Buyers Premium. When I win an item on auction, I am taxed for the purchase price – AND the Buyer’s Premium.

    Is this legal? The Buyer’s Premium is paid to the Auctioneer. Shouldn’t he/she be responsible for the tax on their “commission, service fee” or whatever they decide to call it?

    • Auction Law says:

      Sales tax is always paid by the buyer. The seller (auctioneer, in this case) is only responsible for collecting the sales tax from the buyer and remitting it to the state.

      In most every state that collects sales tax, the Buyer’s Premium is considered to be part of the purchase price and sales tax is collected on the total purchase price.

      In many states, if items are shipped to in-state customers, the shipping costs may also be included in the total price and sales tax is charged on that total, as well. You might want to read your state’s sales tax laws and see if this applies in your state.

      Here’s another little tidbit about sales tax that many don’t realize.
      The correct term is “sales and use tax” and when you purchase items that are shipped to you from another state, you are not charged sales tax by the seller because you are required to pay YOUR state’s “sales and use tax” on the item. Sellers in another state are not typically required to collect and remit the sales tax for other states, but only on sales in their own state. Therefore, you are responsible for reporting those types of out-of-state purchases and paying the “use tax” to your own state, because that’s where the product is being used. You can find this information for your state of MN here:
      http://www.revenue.state.mn.us/individuals/use_tax_individ/Pages/Individual_Use_Tax.aspx

      I’ll note that this has also been a big topic in a lot of states due to the vast increase of mail order sales through the internet and because so many do not realize that they are suppose to pay the use tax, the states are losing a lot of revenue. There are a lot of proposals being discussed in an attempt to collect these taxes on interstate sales. Most would be burdensome on the sellers and/or buyers, and some are being proposed to have the federal government involved. We’ll be watching to see what comes of this… hopefully, you will too.

  8. Vyolet Chu says:

    At an auction, after the publicly announced closing time arrived and all bids were in, the auctioneer arbitrarily extended the bidding time by 15 minutes. Is this ethical?

    • Auction Law says:

      You indicate that there was a “publicly announced closing time,” then state that it was extended by 15 minutes. So, it may be assumed that the extension was also publicly disclosed. As such, the bidding was not closed and everyone had the opportunity to place higher bids.

      An auctioneer’s fiduciary (primary) responsibility is to get the highest price for the seller.

      The bidding is not “closed” until the auctioneer announces “sold” or other customary manner indicating the close of bidding.

  9. Vyolet Chu says:

    Thank you!

  10. In the Summer of 2014 I was planning on having a total remodel of my house done so I sorted out Furniture that I wanted to keep and had a local Auctioneer pick up the rest of it to sell. I went to my sons while house was remodeled and when I returned Spring of the following year never heard a thing from the Auctioneer about items that had been for sale. So I go visit them at an auction and they now claim they didn’t know if they sold it or not or can’t find any records of the things of mine they had. Do I have any recourse? This is in Iowa where there is so license for Auctioneers.

    • Auction Law says:

      It seems that there may be two that are possibly at fault.
      You and the auctioneer.
      The first question that entered my mind is whether you provided a current address and contact phone number where you could be reached and where the check could be mailed? After all, you left for an estimated 6-9 months. Of course, you are asking this question another two years later.

      As far as records… The auctioneer may or may not have properly kept records. I would certainly hope that they kept them for a “reasonable” period of time. That said, I’m in a licensed state that requires us to maintain records for two years. So, unless I chose to keep them longer, I could discard such records after two years.

      Do you have recourse? Since you are in a non-licensed state, typical recourse would be through the courts (lawsuit). Whether or not you now have recourse would be better answered by an attorney in your state.

  11. Karen French says:

    I had won several items on an online auction. It ended up that I was not able to pay for the items. The auction company in return resold all of the items. Then filed a civil suit against me for the total of my invoice. How can they resell the items and then file a civil suit? They would actually be getting paid twice for the items.

    • Auction Law says:

      First, why would you bid if you could not pay?
      You not only caused financial loss to the auctioneer and the seller, but denied someone else the opportunity to buy the item.

      Secondly, I would recommend that you read the terms and conditions of any auction, prior to bidding. That will tell you what recourse may be taken if you default on your purchases (which would be a breach of contract).

      While I can not tell you what was in their terms & conditions, most auctioneers have a clause that explains your liability and their recourse if you do not pay for your purchases.

      Your assumption that the auctioneer is getting paid twice is misguided. You fail to understand the costs of setting up the auction, advertising the auction, the people that work behind the scenes and many other costs associated with conducting any type of auction. In addition, the seller was expecting to get paid upon conclusion of the auction and thereby “injured” (a legal term) when you failed to pay. Typically the auctioneer doesn’t get paid until the item is paid for… now they have to start over and do all the same things again, so it’s costing them twice as much and the item may not even bring as much as the first time.

      Now, the auctioneer has to take you to court in the hopes of restitution for their losses and that costs them more time and money.

      Personally, I’d recommend paying the amount due and write it off as a learning experience. Otherwise, it may cost you more if you go to court and lose the case against you, as you will likely owe the original amount (or more), as well as court costs. Your other option is go to court and let the judge decide.

  12. James Bihn says:

    I recently attended an internet auction for Farm equipment. Long in short, I won auction at 25k for a tractor. It clearly stated I was the highest bidder and won the auction. Moments later the auction started again to sell the same tractor. Not knowing what to do, I bid again and won the tractor again after 26.5k. I contacted the moderator of the internet bidding, they said it was a tie with someone at the live auction, so they started it again. I contacted the owner of the equipment and he said a bidder on the floor wasn’t done bidding, and the internet moderator accidently declared me the winner. “Human error” he says. Do I have any recourse?

    • Auction Law says:

      There lies one of the dilemmas of online bidding.
      Apparently this was a simulcast auction, which includes live bidders attending the auction and others attempting to bid “live” online. The problem is it means that a separate operator has to try to keep up with both through a computer and keyboard. However, the computer operator is not the auctioneer. By the same token, if the operator hits the wrong key at the wrong time, it can be a confusing situation. As I pointed out, the operator is only attempting to coordinate the bidding with the online bidders. However, the auctioneer has ultimate control over the auction and it’s not over until the auctioneer calls sold, declaring the final winner.

      As far as what actually happened, I have no idea and anything I might offer would be nothing more than speculation.

  13. Fred says:

    Is it legal to withdraw an item after it has been won and paid for?

  14. I typically do california abandoned property auctions. Hired by banks. Lawyers. Etc. Say you do an auction and you have unsold lots. Those lots,typically go back to consigner for any disposals.
    Is are there any codes that specifically desc ribe what happens to unsold lots?

    • Auction Law says:

      Keep in mind, this is in regard to “abandoned property” and not “lien property.”

      * If the value of the abandoned property is more than $700, it must be sold at public auction.
      * If the property is valued at less than $700, the landlord may keep it and use it or dispose of it.

      http://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CIV&division=3.&title=5.&part=4.&chapter=5.&article=

      If you have been hired to sell the property, then it is your responsibility to sell all of the property. Sometimes this may require grouping items together or other manner to get the property sold. Otherwise, it may only cause additional costs to the landlord to deal with unsold property and if valued over $700, they may be in a legal situation that requires them to sell it (again).

  15. Charlie says:

    Dear Sir/Mdm..
    I had attended a Public Open Auction sales for Arts and Antques items. On the bidding procession, I noticed that were some ‘Fake Bidding’. Is that allowabe n what should do for this practice. Regards.

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