What is an Auction?

It is a binding agreement for the sale and purchase of something on the fall of the gavel and importantly with no subsequent negotiation or amendment of the terms of the contract. This is a fundamental difference between selling property by auction as opposed to a sale in the conventional manner by private treaty.

How does a sale by public auction operate?
The auctioneer starts proceedings at the scheduled time by introducing himself or herself and giving a brief description of the property being offered for sale. The auctioneer then reads out the conditions of sale that govern the auction and that are binding on anyone who makes a bid for the property. No one must bid at an auction unless they are prepared and able to complete the purchase if their bid is successful.

People are then invited to ask any questions before the bidding starts. The auctioneer then commences the sale by suggesting a figure and bidders raise their hand or in some way signify that they wish to make that bid. No one is at risk of inadvertently buying a property and the bidding continues until the auctioneer is sure that everyone wishing to make a bid has had an opportunity to do so.

A brief look at auctions:
Auctions are steeped in tradition yet retain perpetual appeal in today’s modern world as an efficient means of conducting business.

The word auction is derived from the Latin auctio meaning increase. Trading is recorded as far back as Roman times when the victims of battlefields were scavenged and their goods auctioned between the Roman soldiers. On 28th March 193 AD, the Roman Emperor Pertinax was deposed and beheaded. His severed head was shown to the crowds and the Empire declared for sale to the highest bidder. Senator Didius Julianus was successful with a closing bid of 300 million sesterces. But the military governors waited only 22 days after Julianus had settled his account before revolting and beheading him also.

Auctions as we know them today are an extension of the barter system. London saw the first Auction Mart established in the early 19th century possibly as a result of the boom in the London auction market during the period of the French Revolution in the late 18th century when impoverished French aristocrats were forced to sell treasured possessions.
Auction of Real Estate, houses, farm land, etc. are best held at the property itself although it is typical for the leading English Real Estate auctioneers (who are more successful than their next three competitors put together) to move into a select London hotel and auction as many as 300 countrywide properties in one day.

Far from being a last resort, auctions merit their own place in any property market. In Manly, for example, properties in this suburb of Sydney, Australia go straight to auction without exception because of the high level of demand.

Guernsey still requires auctioneers to be licensed. Such a licence is issued by the States on receipt of satisfactory references and costs £3 per annum. Not much by today’s standards, but staggering to consider its value when this fee was first introduced in 1914.