What Are the Different Auction Types?
Top 50 Questions about Farmland
Hey, it's the Iowa land guy. And here's the top 50 questions that I get asked about farmland. What types of auctions do you offer? We offer. about every kind of auction you can imagine. So let me go through some of them. The first one, of course, is live outcry auctions. Typical, what you think of, uh, where the auctioneer, uh, is talking, asking for bids, conducting the auction until the unchallenged bidder becomes the buyer. Second type of auction, a sealed bid auction. So a sealed bid auction will place bids out to the general public. Uh, it will go publicly to everyone though. And then by a certain time and date, Those bids are required to come back to me, the auctioneer, as a sealed bid. Okay, then there is a hybrid auction or also called simulcast auction. That is a live auction where we also offer online bidding. So we want to make sure that everyone has the opportunity, whether you're sitting in your tractor or you're live in the crowd. You have the opportunity to bid on the seller's farm. The next style is called virtual auction. So a virtual auction is where it's a live outcry auction. But the only way to bid is via the internet or the online bidding platform. So it's still a live outcry where the auctioneer is asking for money. One, now two, now three. But the only way to place your bid isn't to be live in the crowd and raise your hand. It's virtual. Everyone has to bid on the internet, okay? There's another type of auction that we offer, and that is a timed, online only, countdown style auction. So we'll count down, 5, 4, 3, 2, 1. There's no live auctioneer in this method. And in this method, people can bid, uh, for a certain, uh, time set, and they'll count down. Till the last second, and they'll bid. Okay, what's the difference between a timed online auction and eBay? eBay, the last bidder, is the person who clicks the bid. If you get in before that 5, 1, you click the bid, you win. In most timed online auctions, that is not the case. What we have is a soft close. And the reason we have a soft close is I don't want the last bidder, I want the bidder who's willing to give the most. So how our auctions are conducted, if it's a timed online auction, is it will count down. 5, 4, 3, 2, 1. If somebody clicks the button or places a bid, within the last two minutes, the clock will restart. for another five minutes. If it starts for five more minutes, it gives that second place bidder the opportunity to raise the bid again. If it counts down 54321 and they place the bid again. It restarts the bidding again until the unchallenged bidder, or the highest bidder, until the unchallenged bidder becomes the buyer. We also offer phone auctions. We normally don't do them typically on their own as just a phone auction, but if you're that person that does, cannot make it to the live auction, but does not quite trust the technology yet, and wants to just talk with somebody on the phone, That will be their representatives. We always have extra people at our auctions to take the phone call, to listen to you on the phone and place your bid on your behalf. So lots of different types of auctions that, uh, can happen out there. And there is one more that I haven't. mentioned. And that one more is called multi parcel auctions. Typically we do this on larger tracts of land, uh, 15, 1600 acres, 10, 000 acres. If we want to divide it up into more equitable chunks of land to where, uh, multiple bidders can bid, we don't necessarily know what tracts they want to bid on or how they want to buy. Do I want tracts 1, 2, and 5? Do I want 7, 14, and 2?
David Whitaker | Iowa Land Guy