The deceptive auction practices for personal property are not and will not be accepted by those auctioneers involved in the selling of real property.  Although the two do have substantial differences in debtor/creditor law, as far as I know, the only specific distinction between the two forms of property is one is movable (personal) and the other not (real).

 

The essential difference in the auctioneering process between the two is that a minimum bid price is disclosed before the start of an auction of real property. Without that honest and forthright start to the process, any form of chicanery and deception can take place, and it certainly does.  For one, a secret reserve requires it.  In the real estate world, the starting line is clear for all comers to have a fair chance to be in the game.  Does that justify a difference in the two property form auctions?

 

I have a big disconnect between the type of auction format and the methods to start valuing any property at auction.  For clarity on the issue I looked at the National Auctioneer’s Association definition of the auction term “Opening Bid” and code of ethics for auctions of real estate.  As defined, “the lowest acceptable amount at which the bidding must commence” should eliminate any form of sham bidding to reach a reserve. The seller must dictate this.  I would think that if one insists on keeping it secret, then it should ultimately be disclosed at the commencement of the property being auctioned. By their own Association’s definition, an auctioneer shouldn’t start an auction at an unacceptable amount.  

This bogus issue of a difference of property transportability, in reality, has nothing to do with how it should be fairly auctioned.  It does however come down to the fact that powerful companies (the Sotheby’s/Christie’s duopoly) in the personal property area control and manipulate the process to their benefit.   Both the buyer and seller are “stage managed”, both figuratively and in reality.  With real property auctioneers, there is no Sotheby’s/Christie’s duopoly, unless you consider our government, with all their property resulting from the subprime mortgage mess.  If that’s the case, you know the auction had better be on the up & up.  In most circumstances the terms of a real estate auction start with an opening bid and rules on how to quality to buy.  

In the new (Obama) world we now live in, regulation seems to now be a preferred method to prevent abuses.  With the personal property auction process, deception, sham bidding, and conflicts of interest should be more vigilantly enforced and be treated more like real property.  The form of the property has no bearing on establishing an auction starting price; a floor.  It would behoove dealers to play by the same game and be required to openly disclose their prices; a ceiling.

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