Banks listen up…
February 28, 2010
I recently attended an auction of a 40 foot Sea Ray Vessel on behalf the secured party; a bank. An attorney conducted the actual sale/auction. All notifications were properly documented in one of the newspapers where notifications of that nature are run.
The sale was scheduled for 1:00 pm. On sale day, I showed up about 8 minutes before 1 p.m. I walked the marina looking for an auction sign. I didn’t find any signage. Finally, I saw several people holding brown expandable files not looking like they were ready for a cold day on the water. I asked if they were there for the auction. As it was, they were the representing parties who would conduct the auction.
About 5 minutes before auction time, about seven people showed up in the parking lot. Then, 3 minutes before auction time, the representative asked if anyone wanted to see the boat. Several people walked down the make inspection. About 10 minutes later, they all returned. Announcements regarding legalities were made. Bidders were asked to bid with their names first then the amount they wished to bid. It seemed most people knew each other and all were from the immediate area. No phone bidders and certainly no on-line bidding was occurring or available.
As the bidding began, there was discussion between bidders. It was hard to tell whether there was a group representing one bidding entity, or whether they were just there watching and talking about the vessel. There was one fellow there though who was trying to strike up a partnership with anyone who was interested. He was mostly ignored. Nonetheless, it was apparent to me that only the locals were there.
It was also apparent to me this vessel would probably have performed much better had there been some advertising done, which could have brought in bidders from outside the immediate area. It was almost as if all the bidders had gotten the word about this vessel by word of mouth because as I said, they all knew each other and were from only the local area.
While I understand the nature of these type sales, I urge secured parties, especially banks, to use a professional service. We tease in the auction industry that you can’t have a successful “secret” sale. By that we mean, you can’t just do “nothing” in regards to promoting an auction and expect a good auction result. If you don’t tell anyone, no one is going to participate or attend.
I know the sale/auction of this vessel would have performed better if a professional auction company had handled the sale. Yes, times are hard and it seems banks are not willing to pay even a little bit to a professional to get the job done better. I pose this question then to these banks. How can you measure a successful sale without a good representation of the bidders pool present?
By the way, the buyer who bought the vessel is local and is going to re-sell it. I guess that tells you something about the price. By hiring a professional auctioneer, you will render a more professional performance and result. Think about it.
