Can auctioneers ignore bids?


Mike Brandly
4 December 2017 - 1:00pm

Selective hearing? I only see or hear bids I want to? I only have to accept offers which are acceptable to me, regardless if they are higher than the current bid? There’s only one person in charge at an auction — the auctioneer?

It’s important for auctioneers to understand that first — they are typically agents for the seller (unless they are the seller,) and not ultimately in charge over the seller, but rather work for the seller. Secondly, without bidder/buyers, auctions can be lonely places.

An auctioneer has a bid of $25,000 and is asking $26,000 when a bidder offers $25,500. The auctioneer doesn’t want to accept that bid, so he ignores it? Really? He better hope that bidder forgets about that offer, and nobody else heard this offer — especially the auctioneer’s client — or it is a [successful] lawsuit waiting to be filed.

That is, if this auction is without reserve (absolute) and not with reserve. In a with reserve auction, the auctioneer can indeed refuse this $25,500 offer so long as he has his clients (seller’s) knowledge and consent either expressed in their written contract and/or at that moment.

In an auctioneer CE class just a few days ago I heard an auctioneer say, “I have the right to refuse any and all bids at anytime I want …” I replied — much to his surprise — that indeed he had that right as long as he was having a “with reserve” auction. 

In regard to this comment, we wrote in 2014 about auctioneers “refusing” a higher bid:

While I’m the one writing this treatise and we’ve conducted auctions all across the United States, I have to admit when I’m bid calling I feel like I’m the “one in charge.” Yet, legally, I am an agent of the seller who is my client — my boss. As such, my client can authorize me to be the “one in charge” but despite all that, there are laws, rules and regulations which bind the auctioneer beyond his client’s wishes and his own gallantry.

That’s not only my opinion, but the opinion of the Supreme Court of the United States which has ruled auctioneers work for (represent) sellers, and otherwise has stated clearly that the laws of this country apply to auctioneers whether they like it or not; as an auctioneer, you can’t just opt-out.

If you’re having a without reserve (absolute) auction — you cannot ignore higher bids because selling absolute means you are bound to sell each property (each lot) to the highest bidder and if you don’t you’re in breach of contract with your seller-client. If you as an auctioneer want to be in control (reserve the right) and set the increments and be able to ignore bids, you need to have a with reserve auction.