Buying Far Below Market Value

It’s also a good idea to get into the habit of looking at the Legal Notices section of your local paper on a regular basis. Since the law often requires a legal notice to be published before a seller can dispose of personal property, you can learn about many private and government sales this way. Check with your county clerk for a list of newspapers that run legal notices in your area.

How Auctions Different from Related Sales

Purchasing at auctions is very different from buying at most retail outlets. Here are some of the basic differences between auction buying and purchasing the same type of item from your local store:

1. Price. At a store, the price of an item is fixed. If you feel that the price is too high, you can shop around or settle for lesser quality at a lower price.

Auction prices evolve. As a bidder, you participate in setting the price. Sometimes the sellers set a minimum price for an item, below which they will not go. At other times there is no set price which means that you may well have the opportunity to create a great bargain!

2. Quality of merchandise. At a store, unless it’s a secondhand store, the items you purchase are new and unused. If you discover a flaw, you have the option to return or exchange anything you buy.

Auction items are sometimes used or secondhand. Because every bidder is given the opportunity to inspect the items before the sale, everything is sold “as is.” If you discover a flaw in an item after you’ve purchased it, it’s your loss. You have to fix it yourself or live with it. For this reason, close inspections and a good knowledge of your prospective purchases are essential.

3. Payment and delivery. At a store, you can often pay for your purchases in cash, by check, or with a credit card or some sort of in-house credit plan. If you can’t take your purchase with you immediately, many stores will arrange delivery for you for a small fee.

At an auction, the full price of the item is usually due immediately or at most within a day or two. Rules for payment vary greatly between different auction houses. Some houses demand cash only; others will take personal checks if you’ve established a line of credit. Bidding is open to anyone who wanders into some auction houses; others require a minimum deposit from anyone who wants to participate. This deposit is deducted from the money you owe for an item if you make a winning bid; if you don’t make any winning bids, your deposit is refunded to you at the end of the auction.

There are also no set rules for delivery of the items you purchase. In general, once you conclude the sale, the item is yours, and it’s your responsibility to make delivery arrangements. Some auction houses have connections with delivery companies, which can wind up saving you money; but this varies from house to house.