Bidding Procedures and Auction Conduct
Running a clean sale
The auctioneer controls the conduct of the sale: opening bidding, recognizing bidders, setting increments, handling tie or disputed bids, and declaring the sale. Key concepts include bid calling, increments, the hammer (or announcement of sale) as acceptance, chandelier bidding (fictitious bids taken from the chandelier to stimulate real bidding), shill bidding (bids by or on behalf of the seller to inflate price), and by-bidding. Chandelier and shill bidding are ethically and legally problematic because they misrepresent genuine demand.
Procedural fairness
Know how to handle: a bidder who retracts before acceptance; a tie between two bidders; a dispute over whether a bid was heard; absentee, phone, and online bids; and the auctioneer's discretion to reopen bidding. The general principle is that the auctioneer may reopen bidding when a genuine dispute arises, and the auctioneer's reasonable exercise of discretion generally controls.
Traps
- "Sold!" is acceptance. Once the hammer falls, the contract is formed and the bidder cannot ordinarily withdraw.
- Seller bidding. Bids taken from the seller or the seller's agent without disclosure are improper; with disclosure and a stated reserve, the rules differ.
- Conditional bids. A bid conditioned on inspection or financing is not a clean bid and may be rejected.
- Online vs. live. Do not assume identical rules; online sales often have their own terms and closing mechanics.
Rule of thumb
If a bid is not genuine, not from a real bidder, or not unconditional, treat it as suspect. The auctioneer's job is to protect the integrity of the price-discovery process.