Chapter 3:
Types of Auctions

There are many distinct types of auctions, including:

Open Auctions
These auctions are also called "public auctions." They probably match your mental picture of what an auction should be. An auctioneer regulates the bidding, and you bid by either calling out your bid, raising your hand, or holding up the bidder's number that you received when you registered.

Absolute and Reserve Auctions
In an "absolute auction" or "auction without reserve" there are no minimum prices set and items go to the highest bidder. This kind of auction is the best for you, since there is the greatest potential for solid bargains. In an "auction with reserve," a minimum price is set for each item. If the minimum price is not reached during the bidding, the item remains unsold.

Spot Bid Auctions
During a spot bid auction, you write down your bid on a special card. All cards are sorted on the spot, and the highest bid wins. Spot bid auctions are common at sales where items are limited and demand is high, such as commercial real estate.

Sealed Bid Auctions
Sealed bid auctions are common when large quantities of surplus goods are for sale. You are required to fill out an "Invitation to Bid" form (IBF) and send it in, along with a deposit. The deposit is usually 25% of the appraised value of the items for sale. On a specified date, all the bids are opened and the highest bidder wins. If your bid is not successful, your deposit is returned. One key to success with sealed bid auctions is getting your bid in the mail as early as possible. If two bids are tied, the award goes to the bid with the earliest postmark. Also, the postmark must be legible, so it's always a good idea to have the post office hand-cancel the envelope. Keep in mind that items are usually sold in lots. So make sure you specify which lot or item(s) you are bidding on. Finally, be sure to mark the outside of your bid envelope with your name, address, the sale number, opening date, and your bidder identification number.

Flea Markets
Flea markets are not auctions in the classic sense. They are usually open-air markets for secondhand articles and antiques. Although the items usually have an "asking price," that price is normally negotiable...which makes it similar in principle to an auction. Flea markets operate on a "first come" basis so the sooner you get there, the better chance you have of getting the better deals and better quality merchandise. Flea markets are usually held on Saturdays and Sundays. The Bargain Network auction database includes many flea markets around the nation.

Storage Unit Auctions
Many storage facilities (and moving companies) sell or auction off items that have gone unpaid, or have been abandoned. The articles for sale in a smaller storage unit will usually be sold all together in a "unit lot." Normally, you make an offer for all of the items in the lot, and the merchandise will usually go to the highest bidder. Larger storage units may also have individual item auctions - or set prices - for the larger items (washers, dryers, furniture, etc.), while the smaller items will usually be offered in "lots."

Normally speaking, you will not have the same merchandise inspection or "preview" rights at storage auctions that you have had at traditional auctions. In some states, in fact, it's illegal for the public to preview items at these sales. But before the bidding starts, you should be able to peer inside the unit at the contents (refrigerators, boxes, beds, etc.). Since that's done usually from a distance, you won't be able to get up close to do a thorough inspection of the merchandise. So bring your binoculars!

Also, most moving and storage auctions are cash only, with immediate removal of your purchases required. This policy makes sense when you remember that the reason these auctions are held in the first place is to free up storage space so it can be rented out again! The Bargain Network auction database includes many storage facilities.