Hiring an Auction Service? Tips to Avoid a Bad Experience

Written by Angie's List Staff
Updated September 27, 2013
Auction Services
Joe Frerich of Joe F. Frerich Auctioneers performs a real estate auction in Eddy, Texas. (Photo courtesy of Angie's List member Bonnie W.)

Hiring the right auctioneer can make all the difference.

When Malinda Jackson moved to a new home, she needed to find new homes for several family antiques and heirlooms to accommodate her smaller space.

So, the Indianapolis resident contacted an auction service company to help her sell the merchandise, which had been professionally appraised at about $5,000.

Jackson was shocked when she received her share of the auction proceeds: $379. Worse, several of the items Jackson had given to the auction house were missing from the auction company’s inventory sheet.  

“When I saw the check amount, I about croaked,” Jackson says.

Auction services regularly draw complaints similar to Jackson’s. In fact, the service ranked as one of the most complained-about categories on Angie’s List in 2011, with nearly 30 percent of the reports earning poor reviews. Most complaints involved items not sold or accounted for in the auction that came up missing; carelessness in transporting items; high commissions and hidden fees for transport, setup and marketing; and overpromises of the number of bidders anticipated at the auction and the amount the auction would bring in.

“If an auctioneer tells you the auction will bring this (amount) or that, I would be leery,” says Earl Cornwell Jr. of highly rated Earl’s Auction Company, a three-generation family business that’s been in Indianapolis for 55 years. “Unless a reserve (minimum bid amount) is put on it, it sells to the highest bidder. There really is not a set price at the auction, unless there’s a reserve and it has to bring in so many dollars. The only time we usually do that is if it’s court ordered or if there’s a lien on the property. If somebody comes in and says, ‘I’ll guarantee you this amount,’ I would definitely get it in writing.”

Cornwell says his company offers a set price, which includes all marketing and setup costs.

“Some auctioneers will charge for tables and a percentage of the advertising (costs),” Cornwell says. “We charge a flat fee of 30 percent at the auction house on 95 percent of our transactions. If we have to haul it in, we charge 40 percent.”

Too often, poorly run auction houses don’t properly inventory the merchandise being sold. That usually results in the consigner not getting paid for everything that he or she rightfully should. Jackson says she wasn’t able to attend her auction and regrets her absence. Several expensive items were unaccounted for in the sale and were never recovered.

“I wasn’t expecting top dollar, but I was expecting at least for my items to be (accounted for),” Jackson says. “So many things weren’t even listed. I went back there to pick up the rest of my things and she had some of my items (listed as belonging to a different customer). She refused to track down the more expensive items, which was really disappointing to me.”

Cornwell recommends doing your due diligence before you hire an auction service. Legitimate auctioneers must complete 80 hours of industry-related coursework, be licensed by the Indiana Auctioneer Commission, complete continuing education requirements and be able to provide proof of insurance. Cornwell recommends checking for complaints with the Indiana Auctioneer Commission, as well as reading online reviews, before you make a hiring decision.

“If they have several complaints against them, that could be a red flag,” Cornwell says. “You just have to do your homework.”