Getting the asking price right is as much a skill at chattels auctions as it is when putting your home on the market: price it too high and you can kill demand but undercook it and you risk giving it away.
Overexposure over a prolonged period tends to raise questions as to the condition of the property on offer. A newly redeveloped house near me went on the market for around 30 per cent more than I would think is reasonable. This is because it was priced according to what the plot cost to buy, what the developer paid to knock it down and create the house that now stands there, and what their projected profit would be added on top. After a few months, no one has shown any interest – the price may reflect the developer’s needs, but it doesn’t reflect the market.
Soon, I expect market reality to kick in and it will be re-priced accordingly, but that exposure will cost the owner dear, and they may well end up with less than if they had simply pitched it at a more competitive rate in the first place.
It’s the same for chattels auctions. Those prepared to consign items at come-and-get-me estimates very often spark a bidding battle, with lots selling for what they really hoped to get for them, or even higher.
Protecting oneself as a seller can be done through setting a reserve below which the item may not be sold. In the UK, at least, it is illegal to set the lower estimate below the level of the reserve, because that would be fraudulent: effectively offering an item at a price that you already know you wouldn’t sell it at.
However, the clever seller will build in flexibility to their reserve, usually allowing the auctioneer a ten per cent leeway on it, if it is clear that they will secure a sale that way on the day. Even if it isn’t quite as much as the seller hoped to get in the first place, it gives them certainty and a quick return.
The least successful sellers at auction tend to be those who have an unrealistically high view of the value of their consignment and refuse to budge. They may be able to force their point of view on a reluctant auctioneer, but they won’t be able to force it on the bidder.
