Becoming A Better Bidder

Posted by Jim Olson on Aug 7th 2022

I receive questions and comments from auction bidders on a regular basis. “Why didn’t I get the item I was trying to bid on?” “Why did someone else get it for the same amount I bid?” “I would have paid that for it!” And dozens of others.

I have been around auctions my entire life, having participated as both a buyer and seller. Initially, starting off as general help at a livestock auction when young, then graduating to working as a ringman, now I am a licensed auctioneer and own an auction company. So I have seen a little bit of everything when it comes to an auction and the nuances involved.

Various forms of bids

One thing is for sure. The auction world has changed a lot since the introduction of the internet in the last couple of decades. Nowadays, more folks are participating in online auctions than at live events. Therefore, I will address various forms of bidding here with the hope you can gain some helpful tidbits that can be used to your advantage when bidding at an auction.

First off, some basics. Most probably already know this, but let’s go over the ways to bid. There is live bidding, phone bidding, absentee bidding, proxy bidding, and online, there is live and absentee bidding.

Live bidding is just that, you are sitting in the crowd in front of an auctioneer.
Phone bidding is when you are on the phone with a representative from the auction house and telling them what to bid as the auctioneer sells the item.
Absentee bidding is when you leave a “max” or maximum bid you are willing to go up to, this can be done online, or through a representative of the auction house (or even by email).
Proxy bidding is when you get someone else to bid on your behalf.
With regards to the internet, you generally have the option to bid in real time, as the auction is taking place, or absentee as stated above.

Rules of bidding

The first rule of buying at an auction is to have a good idea of what you are bidding on. Preview, preview, preview. If online, look closely at the pictures. Ask questions ahead of time until you are comfortable. If you buy an item and it is not what you expected, it is your own fault (except in the case of misrepresentation by the auction house or seller, which is another subject).
Do not assume anything. Look the items over well and get a pre-determined idea of value in mind. You should always have a dollar amount in mind and be willing to not go over that amount when bidding (unless it is a one of a kind item or something you really, really want).
Find out what the Buyer’s premium, taxes and any other fees, such as shipping and handling, might be. Calculate that into the amount you are willing to pay. Those fees can vary from auction to auction and from region to region, but pretty much any auction is going to charge them in some manner or another.
You should also know where the auctioneer is at in the bidding process and what he is asking for in terms of the next dollar amount.
It is your responsibility to know what lot they are on and what amount is being asked for.
Pay attention. Then be ready to bid up to the amount you had in mind.

More on forms of bidding

Now, some pointers for various forms of bidding.

1. When live bidding, bid visibly with your card, paddle or hand. “Sneak” bids can easily be missed by the auction crew.

Do not hesitate. There are people out there (I have even seen videos on the subject) who coach bidders to wait until the last minute, right before the auctioneer says “SOLD,” to raise your hand and bid. There are several theories behind this, most of which do not hold water.
- What this can be however, is problematic for bidders. For one, the auctioneer or ringman can miss your bid because they do not think you are interested in this lot. Right or wrong, they tend to focus on the ones who have been bidding on that lot. Even if your strategy is to not show much excitement, at least raise your hand once or twice early on so you are on their radar. If you really want an item, do not wait till the last minute to bid—it may be too late.
- Also, many auctioneers do not give a “fair warning” call. They ask for and take bids until they figure everyone is done bidding, then they “drop the hammer.” And even if they have been giving a fair warning call all day, it is not required. So if the auctioneer drops the hammer and you did not get your bid in because you were waiting, it is your own fault for missing out. You took that risk.
- Another side effect of using the strategy of always waiting till the last minute to bid, is you can aggravate the auction crew and attendees. They realize you are playing games and trying to break up the flow of the auction. You will not receive any preferential treatment by aggravating folks.
Another thing I have seen which is not recommended, is to raise your hand in the air when you really want an item and just leave it up there. Some think this is smart if you really want an item, just to make sure you get it, no matter what. The problem is, by letting everyone in the room know you want it, no matter the cost, you can wind up paying more than you should. Unscrupulous auctioneers and ringmen may run you up. Also, there could be folks in the crowd who are ornery and will bid against you just to make you pay more out of meanness. Yes, there are people like that at most auctions.
Bid only as necessary when you are outbid. If you are not sure who has the bid, just ask. Point towards yourself in a questioning manner and either the ringman or auctioneer will see you and affirm whether you have the bid or not at that moment.
Raise your hand in a steady manner, and only when it is your turn. That is the best way. All of the various games played generally have no bearing on the end result anyway. Items are going to bring what they are going to bring (within a few dollars) whether you are messing with the auctioneer and other bidders or not. All you accomplish when playing games is to alienate others.

2. When bidding on the phone, the same applies as above. Also, make sure you have a good connection and speak loudly. The auction staff on the other end has a lot going on and it is loud, so do not make it hard for them to understand or hear you. Be punctual. Know when the item(s) you are interested in are going to sell (within a few minutes) and be ready ahead of time. Most auctions will not wait more than a few moments to get a phone bidder on the line.

3. Absentee bidding is convenient and can generally be done in a couple of ways. One is to leave your maximum (or “max”) bid with the auction house ahead of time. The second is to go online and do it yourself (where that is offered). When buyers tell me they really want an item if it goes for a certain amount or less, I recommend leaving a max bid ahead of time, unless you can be at the auction in person.

Even if you are watching the auction live on the internet, you are still at risk if trying to bid in real time as the auction is happening. Too many things can go wrong. The internet lag time can be 2 to 5 seconds (depending on yours and the auction houses internet speeds and various other factors). If you really want an item and are bidding online, leave a max bid ahead of time. That way, the computer system will bid on your behalf as necessary. The system will not let you raise your own bid and does not start out at your max bid.

It is a safe way for a bidder to say, “If that goes for $____ or less, I want to own it.” On most online bidding platforms such as iCollector or Invaulable, etc., the auctioneer has no way of knowing what your max bid is. The system hides that dollar amount. This assures the absentee bidder that they will only pay as much as necessary to win the item, unless someone else bids higher than their max bid.

In the past, I have heard a few bidders complain about leaving absentee, max bids, directly with an auction house. Some say things like, “every time I leave a max bid, the item magically sells for my max bid,” or “I think the auctioneer uses my bid to run the price up,” or a few other negative comments. Let’s address that for a moment.
- First off, there are definitely a few unscrupulous auctions that run people up if they know what you are willing to bid. But I would say that is the exception and not the norm. In that case, you have two choices.
  - First is to not deal with that auction house any longer. Period.
  - The second is to look at it this way, you were willing to give a certain amount for the item anyhow, so you got it for that amount. Great! Count it as a blessing you won the item! That is a more positive outlook. But odds are, if the item went for your max bid, or close to it, that is because there are others out there who also know the value of the item and have put in bids similar to yours.
- Aside from a few places that may use your absentee bid in a self serving manner, most auction houses are on the up-and-up. At our auctions, people leave absentee, max bids, with us all the time. How we handle them is to assign them a bidder number and enter them into the computer clerking system. That way, just as if an online bidder was to do it, the system will bid on their behalf as necessary until they either win the item or it goes beyond their max bid.
  
  Before computer automation, it was common to designate someone from the auction staff to proxy bid their behalf. I have seen places where the auctioneer also has a list and will audibly call the absentee bids as others bid against them. All of these work. We prefer the computer system to do it, then there is less room for human error or shenanigans. As I said, the “max” bid left ahead of time is the best way to get what you really want (short of attending live).

Common questions from bidders

Now let’s address some of the most common questions (concerns) presented by bidders.

The most common one I get from online bidders is, “I left a max bid of $_____ and that is what it went for, but I did not get it.” This happens periodically in a live auction format. In a live auction, bids are accepted by the auctioneer as they come in. So, if you have the bid at $90 and the auctioneer is asking for $100 (and you left a $100 max bid), the computer does not let you raise your own bid (bid against yourself) and the auctioneer generally has no idea what your max bid is. So, if someone in the live audience crowd bids $100, the auctioneer acknowledges and accepts that bid. They are now winning at $100 (because it was their turn to bid). In this scenario, it was just bad luck their turn happened to fall on the same amount as your max bid. This kind of tie does not happen often, but when it does, it’s usually a “who’s turn was it” kind of thing (at live auctions, you generally do not raise your own bid, other bidders do).

If the auction is strictly online (like an online timed auction for example), then the computer system gives the bid to the earliest bidder who bid that amount. For example, if you left a $100 max bid and you now have the bid a $90 (assuming the increments are set at $10), then if someone else tries to bid $100, the computer will automatically accept your bid at $100 and reject theirs, giving them notice that someone else bid that amount already. But this does not work in live auctions, because the auctioneer is who is accepting the bids as they come in.

A strategy I have used to help avoid tie situations like this is to go online before the auction and see where the winning bid is at. Figure what your max bid is going to be and then count forward from where you are to see if that max bid would fall on someone else’s turn if bidding goes that far. For example, if the bid is now $10 and you are winning, but willing to bid up to $50, think like this: me $10, them $20: me $30, them $40: me $50! In this case, you win unless someone goes over $50. However, you may be at risk if you left a $40 or a $60 bid because that amount probably will not fall on your turn. There are a couple of rare scenarios that could still go against you, but most of the time, this will work.
Another complaint heard from online bidders is they were trying to bid and it got sold for less than they were trying to bid. Again, this goes back to the risk taken when trying to bid in real time online and waiting to bid. There is the lag factor between what you are watching and what is actually happening in the live auction. This is usually the cause of your higher bid not getting accepted. If you really want to bid online in real time, my best advice is to bid early, right after the lot opens. Remember, it takes a few seconds for the bid to get to the auctioneer, so hesitation or a late bidding strategy, is your enemy in online live bidding.
Another thing to watch out for when bidding online is assuming you have the bid. Remember, you do not have the winning bid until the auctioneer acknowledges you have the winning bid. The screen in front of you may say you had the bid because you bid what was being asked for, but that computer is not the auctioneer. The auctioneer may accept another bid from another source. Most auctioneers go with who they see or hear first. So if you and other bidders or online platforms are bidding the same thing at the same time, the auctioneer acknowledges who one he sees or hears first and takes that bid, even though your screen may tell you for a moment that you had it. Beware of this, pay attention to whose bid the auctioneer has accepted. Again, this goes back to the risk of trying to bid in real time, online. If you bid early enough, the screen should adjust after a moment and let you know if you are “out,” because the clerk did not accept your bid. However, if it is too close to the closing of the lot, you may not get the notice in time.

Remember this, at pretty much any live auction, the auctioneer has final say. He is kind of like a referee. He calls it how he sees it and the decision is final. It is up to you to know where they are at and to get your bid presented in a timely manner. At our auction house, we have 2 internet platforms and a live crowd going all at once, so there are potentially bids coming in from 3 sources simultaneously. When the auctioneer accepts a bid, the others are “out.” So if iCollector (for example) said you were winning, but you didn’t, it was probably due to one of the scenarios listed above.

Or it could have been a clerking error. Sometimes the clerk may hit the wrong button with your bid showing on it even thought the auctioneer took that amount from someone else (in which case the clerk should have hit the button next to the one with your bid on it, so you can see how easy it is to make a temporary error). Usually, this is noticed right away and they correct it. But for a minute, it might have shown you were winning by mistake. Humans do make errors after all, especially when you put a clerk in a high stress situation like a fast paced auction.

That is why I say, the safest way to bid online is to leave max bids ahead of time. This way your bid shows up every time you are outbid, and it does so immediately, so you have a good chance of being recognized.
The next best way to bid online is to bid early in the process. The later you bid in real time, the more risk you take of not getting your bid accepted in time. As mentioned, live auctions move rapidly.

Auctions can, and generally are, a fun experience where you can buy things at good prices. We all enjoy them. However, if you want to become a better bidder, it is important to know the rules and various nuances of the game.

In closing, if you really want an item, know the value, know what you are willing to give for it and bid early—but not foolishly.

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