A friend of mine recently had to put up for auction a property in New York City. I followed her tribulations rather closely as she interviewed one auction company after another, finally settling on one that seemed honest, responsible, professional and responsive.
The auction of a property worth several million dollars was successful. Thus, in all likelihood my friend made the right choice. Yet what she told me afterward was revealing, though hardly surprising to me or, doubtless, to you.
Her perspective provided me and now you with an insider’s account of how auctioneers work behind the scenes to push up prices, confirming what cynics like us have long assumed.
(If I seem inordinately circumspect, you will understand that I feel an obligation to protect the confidentiality of all concerned, especially since the transaction has yet to close.)
It seems that the auctioneer actually hired a bidder who did, in fact, want the property to raise his hand when action lagged. So he did, but the bidder stopped when the amount reached more than he could afford.
After a short break in the bidding, the auctioneer instructed him to continue anyway, saying something like this:
That’s what we’re paying you $50,000 for. Don’t worry, you won’t have to buy the property. Others will bid up the price.
You know what? The auctioneer was right, and that losing bidder walked away $50,000 richer.
As for your suspicions about auctions and mine, we were right, too, somewhat richer for the truth we have obtained.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022