Ask Anything: 10 questions with Auctioneer Ben Farrell
Posted September 29, 2009
Why do you guys talk so fast? – John Green, Cary
Dear John, it's called an "auctioneer's chant." The purpose of the chant is to keep the audience's attention and focus on the item being sold, and on the price. The fast paced auctioneer's chant creates excitement, and energy in the crowd. It creates a momentum which allows the item to be sold quickly at the best price. The chant creates a sense of urgency for the bidders to make their final decision quickly. And, best of all, it is just plain fun.
Have you ever been timed to see how many words you can say in a minute or over a specific time? – Paul, Smithfield
Dear Paul, I have never been timed to see how many words I can say in a minute. But I have been “timed” to see how many seconds I can go "without saying something," and it's not very long. There are auctioneers who can sell 60 cars in one hour, or sell 200 estate items in one hour, or sell a $500,000 house in 7 minutes.
Almost every auctioneer I've encountered has the ability to speak very quickly. Is this something that you had to learn or is it a natural gift? – Christina, Chapel Hill
Dear Christina, every auctioneer's chant is unique to the auctioneer. Developing a chant definitely takes time and practice. It is much like learning a new language. Auctioneering requires attention on the audience, the current bid and the offer for the next bid increment. There are auctioneers' schools and auctioneer coaches to help people learn how to chant. I believe that it is both a natural gift and something that can be learned and developed over time.
Is there a great deal of difference in the way you prepare for the wide variety of auctions you call? For example, how do you familiarize yourself with artwork versus real estate or estate sales? – Dolly Sickles, Apex
Dear Dolly, yes, there is a great deal of difference in the way you prepare for an auction. An auctioneer's primary job is to bring buyers and sellers together in the optimal purchasing environment. Much of the work of the auction is done prior to sale day by becoming knowledgeable about the artwork and marketing and advertising the sale to the most likely buyers.
I work by consulting with experts in the field. When preparing for an art auction, an auctioneer will market the art work to art collectors and dealers that have shown interest in that specific type of art. When preparing for a real estate auction, an auctioneer will use his local market knowledge to advertise to the most specific and likely buyers.
In the auctioneering profession, auctioneers are developing specialties so they can better serve their clients by being experts in their chosen auction specialty. For example, real estate, art & collectibles, business liquidation and benefit and fundraising auctions.
How are auctioneers paid? Do they get a percentage of what is sold or a flat rate? – Justin
Dear Justin, there is no singular method. Auctioneers create their own business model on how they are compensated, and the compensation plans may vary from auction to auction. Some auctioneers own their own auction houses, some auctioneers work as contract auctioneers and other auctioneers have their own national and/or regional firms.
What is the process to set up a farm auction? My mother-in-law passed away and we have a house, several out buildings, an old store, and household furnishings. What do we need to do prior to having an auction? What percentage goes to the auction house? – Armin Harrell, Wake Forest
Dear Armin, the first step in hiring for any professional service is to interview at least three providers. Ask the auction company to visit the estate and evaluate the items you plan to sell.
I encourage you to ask them these three questions:
- How do they intend to market your assets to the buying public?
- What is their model for compensation?
- How do they intend to get the best price for your assets?
Make sure you get your agreement in writing. You can go to the North Carolina Auctioneer Licensing Board to search for auctioneers in your area: www.ncalb.org.
How do you feel that eBay’s coming into the picture and other online auctions affect the results and popularity of live and silent auctions? – Jason Price, Durham
Dear Jason, I think eBay's success and popularity have led to an increase in attendance and participation in live and silent auctions. The auction method is a time-defined sale, with buyers bidding against one another for an item. Participants at live and silent auctions appreciate that the sale is transparent, meaning that they see who they are bidding against and they can see what they are bidding for. eBay has promoted the auction method of selling.
What are the pluses and minuses of auctioning your home instead of going the traditional route of selling it? – Kelly
Dear Kelly, the pluses of selling your home by auction are:
(1) You chose the date that your house will be sold.
(2) Your home sells in a short amount of time.
(3) All the interested parties come together and the highest bidder wins, which means you know you got the highest price for your property on sale day.
(4) Auctions attract serious buyers, and the most popular reason is ...
(5) Auction contracts contain no contingencies for financing or repairs. The only item to negotiate is the price. When selling your home by auction, you may set a reserve price to protect your interest.
For buyers, they know who they are bidding against and all the terms and conditions are transparent. I have bought and sold my own home by auction and believe it is the most efficient method.
The minuses of auctioning your home are:
(1) If you own more money on your home than it is currently worth, the auction method cannot correct the upside down value.
(2) The auction method of accelerated and expanded marketing will bring buyers to your home, but in the end, the property must stand on its own.
Selling absolute, what exactly does this mean? Also, when "auctioning" real estate and a tract is auctioned separately then recombined with other tracts and auctioned again to try to get a higher price per acre, then sold even though the individual tracts have settled … with a high bidder … it is awfully suspect from a buyer’s perspective. Is this a common practice? – Steve N., Angier
Dear Steve, selling absolute means the property will sell for the highest bid regardless of price, no reserve. In North Carolina, all auctions are considered to have a reserve price, unless the word "absolute" is advertised.
The second part of your question references a method called "multi-parcel" or "multi-par" auction. This is considered best practice in the auction industry. The terms and conditions of these sales need to be clearly announced in writing before the auction. The reason the land tracts are offered both separately and in combination is to benefit both a single tract buyer and multiple tract developer.
It's important to note that until the auctioneer announces the word "SOLD," the auction is not over. The multi-par method helps the small tract bidders get a piece of the pie, and the large tract developers cannot take the whole pie at a discounted price. Plus, the seller gets all of their property sold on one day.
This method was recently used used to sell a 6,000 acre farm in Ohio on June 30, 2009 for $27.1 million.
I had my auctioneer license in N.C. for one year, but I have not renewed them for over two years now. Would I have to go back to school and retake the test to get them back? – William McDaniel, Clinton
Dear William, congratulations on passing the N.C. state exam! No, you do not have to go back to school. If you have failed to renew your license, you will need to contact the N.C. Auctioneer Licensing Board and request an application to renew your license.
You are required to complete the annual continuing education courses and pay the licensing fees. Good luck. Hope to see you at the Auctioneer's Association Winter Convention January 2010 and the National Auctioneers International Conference and Show July 2010 both in Greensboro.
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