HOW GOVERNMENT AUCTIONS WORK
* State, local and federal governments are obligated to hold auctions of corporate and personal property that is confiscated, forfeited or seized. The law forces them to offer the goods to the public by auction. The theory is that the price obtained is the 'open market value' so that nobody can claim later that the property was sold cheaper than it was worth or that there was any 'insider dealing'.
*The property can be anything from jewelry to office supplies to automobiles to boats and airplanes. Do you think these government agencies like going to the trouble of arranging the access and security for public viewing and bidding by Joe Average? Do you think they really want to be bothered dealing with a huge number of individual buyers? Nope, don't make life difficult when it could be simple. So the auctions are not publicised in mainstream media. Some agencies seem to enjoy making the auction rules confusing and difficult, to keep the average Joe out of the way.
* The confiscated, seized and forfeited property is the property that comes into the possession of Federal or other judicial law enforcement agencies. Sometimes, the seized property may get returned to the owner if the owner reconciles the reason the property was confiscated in the first place, like paying off overdue taxes. Usually the owner is not in a financial position to do that. Seizures related to criminal activities may not be recoverable by the owner.
* Governments also auctions excess property of their own, like property that a government agency no longer needs. This property is either passed to the Federal Government or transferred to state or local government. This property is then sold to by public auction. Unclaimed property of all types, like vehicles and boats that are lost or abandoned, is also auctioned off. The U.S. Postal Service is a major source of lost, untraceable property.
* Private companies in transportation, leasing and especially the finance business also have unclaimed, untraceable goods, end of lease assets and lots of repossessed or foreclosed property to dispose of. Although they are not necessarily forced to sell by public auction, they often find it a quick way to get rid of items that are not experts in marketing.
* Some of the property that the government auctions off frequently are repossessed cars, other vehicles and boats. Repossessed vehicle and boat auctions represent major income from government auctions because these items are high priced. Repossessions are frequent because they have large loan balances and high monthly payments. Also cars and boats are repossessed or seized due to the arrest of the owner.
* The property is auctioned off in 'as is' condition. There are no warranties or guarantees from the seller, although some items are new or nearly new and so may be covered by the manufacturer's guarantee. This is why inspection is important. Unless the conditions say otherwise, anybody can inspect the goods for sale – you don't have to be qualified. You can check it yourself, get a knowledgeable friend to go or pay an expert.
* The property is sold through various sales methods. One of these methods is the sealed bid. In a sealed bid sale, you are given an invitation to bid on each specific item on bid sheet. . The bid sheet has all the information about the property to be auctioned and also includes all the terms and conditions for the sale. If interested, you have to submit your bids to the government agency in a sealed envelope through the mail or by hand. On the bid opening date, all received bids are opened and the highest bidder becomes the buyer.
* In a normal public government auction, the federal agency gives all prospective buyers a description of all the lots with the necessary bidding instructions. Each item is auctioned off with the highest bidder getting the property. Unlike the sealed bid, you either have to be present or give written instructions to the auctioneer to place bids for you (up to your limit) at the public auction.
* With an Internet based government auction, you place your bid at the web site where you can bid on single or multiple items within a fixed timeframe. This is the type of sale closest to the familiar eBay auctions.
* There are sealed bidders and spot bid auctions with slightly different rules but you can get all the information from the catalog and/or bid sheet. If anything isn't clear, call them and ask.
* Sometimes local, state and federal government agencies will have fixed price sales. In a fixed price sale, the merchandise is marked with a predetermined fixed price. You have to buy the item at the marked price. Here, the first buyers to arrive have the best chance to buy the item.
It used to be difficult to get hold of the information about these auctions. The details of time, place and the items for sale were not easily available in the media. They still aren't. One or two information providers have appeared to help ordinary members of the public get better informed. The best now make information and bidding available via the Internet. That allows you to save an enormous amount of time and get hold of a bargain real quick!
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Colin Millman has had great bargains from seized property auctions.
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