First, auctions use the principle of scarcity, whereby we overvalue things that we think might run out. Auction items are scarce in that they are unique only one person can have it , and scarce in time after the bids are finished, you've lost your chance. Think how many shop sales successfully rely on scarcity heuristics such as "Last day of sale! We all tend to take the lead from other people; if everybody does something, or says something, most of us join in before we think about what we really should do.
Auctions put you in intimate contact with other people who are all providing social proof that the sale item is important and valuable.
A final ingredient in the magic-spell cast by auctions was uncovered by researchers from Princeton. Their experiments asked volunteers to play on-line auctions with different rules. Some of these auctions had rules that encouraged over-bidding like typical open auctions, which most of us are familiar with from movies , and some had rules that encouraged rational behaviour like the eBay structure.
With enough guidance from the auction rules, the bidders didn't end up paying much more than they originally thought was reasonable - but only if they thought they were bidding against a computer programme. As soon as the volunteers thought they were bidding against other live humans they found it impossible to bid rationally, whatever the auction rules. This implies that the competitive element of auctions is crucial to provoking our irrational buying behaviour.
Once we're involved in an auction we're not just paying to own the sale item, we're paying to beat other people who are bidding and prevent them from having it.
So it seems Gore Vidal had human nature, and the psychology of auctions, about right when he said: "It is not enough to succeed. Others must fail. It pays to be associated with the VAA. Education, camaraderie and mentorship. Join Today! Working to promote the professionalism of auctioneers and auctions through education and technology. All Rights Reserved. Site powered by. Contact VAA. Why Sell at Auction?
Auctions are the most unique and valuable way of selling almost any type of personal property. People are Flocking to Auctions Auctions are one of the oldest forms of selling property; their history spans centuries. Did you know that more than half of the total U. The Value of Selling at Auction So how can auctions benefit you, as a seller? Well, there are a number of reasons Speedy Process, Quick Turnaround. An auction is immediate. It happens during a set time and is completed during that time.
You work with the auction firm to schedule what works best for you. It WILL sell and it will sell during the set auction time. Comprehensive Marketing of Your Property. Part of conducting an auction is marketing it to the general public to get as many people there as possible.
Auctioneers have comprehensive mailing lists they use to market their sales. They run advertisements, distribute fliers and more. They are marketing specialists. A good marketing effort can easily bring to people to your auction, or more! Buyers Come Prepared to Buy. Auction goers come with money in their wallets, pockets and hands and are prepared to come home with property.
No Negotiations. There is no haggling over price or merchandise. The auction method is quick and efficient. When people bid, they make a commitment to buy the property at that price without discussion or debate.
No Leftovers and Little Clean Up. Reality says your assets are not worth a dime more than a person will pay and has the ability to pay for it. On the lawn or online, auctions are taking place in communities large and small across the country with more than a quarter trillion dollars in assets and goods being sold via auction every year. C, auctions continue to be the most efficient and effective means of price discovery. Nobody challenges the value of their shares in Wal-Mart at the end of the day on Wall Street.
However, mention selling everyday real estate, commercial assets and other assets via the competitive bidding of an auction and doubt and uncertainty immediately follows. The process is straight forward, but perception clouds reality many times. An auction is simply a marketplace where assets or goods are sold via competitive bidding with the highest bid winning the rights to own. Auctions are the purest and quickest form of price discovery.
At an auction, the marketplace consumers , tell you how much they believe an asset is worth and how much they are willing to pay through incremental bidding. No more. No less. Yes, auctions are used to dispose of distressed assets, but people fail to recognize or admit that these assets are sold via auction because other options have not met the needs of the clients or provide the speed and efficiency needed to complete the transaction. The sign will be there tomorrow and most likely the day after that.
Auctioneers are problem solvers, not just fast talkers. Auctioneers take pride in helping their clients find solutions. Auctioneers are strategic asset disposition experts. Professional auctioneers are marketing specialists who use product knowledge, technology and advanced advertising to promote the assets they are charged with selling. Experts in the psychology of selling, auctioneers have the tools and knowledge needed to create a portal for buyers and sellers to connect.
You paid for it. How you actually paid for it is of little significance because at the end of the day you won the battle and that newfound treasure is yours. Many people fail to realize that auctions take place in a variety of forms and for a variety of reasons. Auctioneers are called upon by seniors wishing to downsize their estate and to begin the next chapter in their lives.
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