Welcome to our 4th Auction Sale of 2024
With another catalogue packed with over 300 lots for you to page through and I’m sure you will find some great deals.
Over a number of months now I have seen a theme developing with new clients who ask us to sell lots for them which have either been withdrawn from a sale held by another auctioneer or stated as “sold” when it clearly has not. This has encouraged me to look at data for the entire auction industry and whilst I am the first to say an auction is a “window to the market on a given day”, my research has made me conclude that when it comes to results, the transparency of an auction sale for some, mainly online only auctioneers, is not quite how it should be. I can only pinpoint lots that are declared “withdrawn prior to auction” and since Covid this volume has changed dramatically. Prior to Covid and, with the exception of possibly two or three auctioneers everyone in the industry held their sales in a venue where bidders either attended in-person or bid via telephone. Most of us offered the ability to bid online at that time but in all honesty, no bidders wanted to access the auction via this platform. There are of course the modern method auctioneers where an exchange doesn’t take place on the fall of the gavel so for the purposes of my research I excluded all platforms of this type.
From the outset of launching an auction catalogue to the sale itself there will always be a number of lots that are withdrawn from the sale for a variety of reasons. Data provided to me by Essential Information Group (EIG) shows that in the pre Covid years across the entire auction market the number of lots withdrawn prior to an auction sale averaged 13% for all years prior to 2019, in 2019 the figure was 13.4% of all lots offered throughout the industry were withdrawn prior to the sale.
In March 2020 Covid hit and we went into lockdown. The industry very quickly moved to an online only platform and in many ways, over these lockdown periods auctions were one of the only formats where property continued to be transacted. Covid regulations were fully relaxed in the Summer of 2021 and we returned to venue based auctions with multi stream access in September 2021.
In the years since Covid, virtually every auctioneer has either tried and failed to return to a venue or, saved themselves fortunes (whilst at the same time increasing costs charged to their customers) and kept their sales as Ebay style online only platforms. But there is a critical point to this and why it skews results to no longer appear properly comparable. Invariably with every one of these auctioneers’ bidders have to register not only to bid “at” the auction but also, have to register for each and every lot they want to bid for i.e the auctioneer knows who will be bidding on each and every lot before the sale starts. It therefore follows that the auctioneer will also know which lots they have nobody registered for and it is at this point, we see the impact.
Countless times we are being approached by new clients telling us “the auctioneer withdrew my lot before the sale as they had no bidders registered for it“ or even worse, were told “if no one bids we will buy the property in at the reserve” i.e the hammer falls, the auctioneer reports the property as sold and it hasn’t! Clearly this skews results and the transparency that used to exist in this aspect of our industry has gone.
So, to highlight the issue, I asked EIG to let me have data on the number of lots withdrawn prior to auction on an annual basis since 2019. In 2019 the figure was 13.4%, this has risen consistently since then and in 2023 the percentage of lots withdrawn prior to auction was 22.8% and already this year, it’s risen still further to 23.7% .
I’ve compared these statistics to our own. Remember, when you register to bid online at our sale you register once and then can bid on any lot you like, you don’t need to register for each lot you want to bid for. Of course, 100’s of people turn up to our venue every auction and until they raise their bidding paddle, we have no idea which lot they are actually there to bid for so, we can’t and don’t withdraw lots if we have no registered bidders. Our rate of lots withdrawn prior has remained consistent throughout this entire period and actually averages at just over 10%.
When looking at properties declared to be sold it is impossible for us to go into every case and see exactly what has happened. In fact EIG now state that the data is supplied to them directly by the auctioneer, therefore, not independently verified.
So I guess the conclusion is this, when looking at lots and their history some that may appear to have been auctioned a number of times and even stated as sold, may not have been. Some auctioneers that claim exorbitant sales success rates are not only massaging these numbers by withdrawing stock before the sale but actually during the sale, buying in properties and declaring these as sold when in reality, they haven’t.
So, if you really want to see what is actually happening in an auction, you want to experience a real sale and actually see properties being sold rather than being told their sold, come along to The Grand Connaught Rooms on Tuesday 21st May , the only place where you can still see a national property auction take place in an open and transparent environment.
