Top tips for going to an auction
Auctions are a good place for construction firms to bag a bargain
With the global credit crunch in full swing questions of saving cash are at the top of everyone's thoughts. Auctions are a good place for construction firms to bag a bargain. Here are our top tips for successful buying.
10 steps to help you bid at an auction
1. Review equipment online/in catalogue/first-hand
2. Prior to bidding, register at the auction office on the day or online.
3. Documents to be provided include a signed agreement specifying the buyer’s name, company, contact details and banking information, photographic identification and either a cash deposit or a guarantee letter from a bank or other credit agency.
4. Registered bidders will be issued with a personal bidding number, bidding catalogue and list of the equipment in order of sale.
5. Once issued with a bidding catalogue a buyer may bid on any item in the auction and will be held responsible for any purchases applied to their bidding number. Note: buyers can place bids in real-time over the internet as well as in person at the auction house.
6. Each item of mobile equipment for sale will be driven across a selling ramp in front of the auction house theatre; bids should be placed during this period.
7. The auctioneer will announce the lot number and a starting price; if no bids are placed the price will be dropped until someone bids, then rise according to interest from buyers until no higher bids are offered, at which point it will be announced as sold. Bids can be made by the buyer raising their bidding catalogue.
8. Every item in an auction will be sold to the highest bidder on the sale date.
9. Once bidding is complete the bidder will receive an invoice listing all their purchases. Payment must generally be made within seven days of the auction.
10. On completion of payment, bidders can collect their items; the auction house generally offers transportation options.
Top tips for equipment checks at auction
- Prior to bidding for equipment, it is advised that bidders hire a mechanic to check the equipment for safety and functionality if this facility has not been provided by the auction firm.
- Try to determine the value of the equipment prior to the bidding process beginning.
- Check the year of manufacture as many countries now have age restrictions on vehicles.
- Check for any potentially expensive leaks; by watching vehicles queuing for the auction process leaks may become evident.
- Check that expensive parts such as the engine and transmission (gear box) are performing well.
- Check the track chains and rear sprockets on tracked equipment for wear as these are expensive to renew.
- Do not be fooled by a new or sophisticated paint job into not probing deeper into the condition of equipment.
- Tyres are sold in as ‘as seen’ condition.
Middle East auction houses
Worldwide Auctioneers (WWA)
WWA holds fully unreserved auctions, with no minimum bids, seller bids or reserved items, assuring buyers and sellers that equipment is traded at fair market value.
Through the Middle East auction centre, which comprises a 100,000m2 compound in the Jebel Ali Free Trade Zone (FTZ), Dubai, has sold more than 52,000 items of construction equipment at its 60 auctions in Dubai from March 2001 through February 2009, for a total amount of over $762.5 million in auction value. WWA controls a market share of over 65% of all industrial equipment auction sales concluded in Dubai in 2005, 2006, 2007 and 2008. The firm has held auctions in other countries such as Qatar and plans to expand its auction and private equipment sales business into other GCC countries. See www.wwauctions.com for more information.
Ritchie Bros Auctioneers
Canada-based Ritchie Bros Auctioneers is the world’s largest industrial auctioneer, selling equipment to both on-site and online bidders. Through unreserved public auctions, the firm sells a broad range of used and unused equipment for the construction industry, among others. It offers auctions at more than 110 locations worldwide, including 38 auction sites such as one at the Jebel Ali FTZ in Dubai.
In 2008 it sold US$3.57 billion of used and unused equipment at 340 unreserved auctions, including a wide range of heavy equipment, trucks and other assets for the construction industry. For more details see www.rbauction.com
US-based online auction house Iron Planet is targeting Middle East buyers and sellers via its European base in addition to its American auctions. The firm is also aiming to increase its presence in the region in the future. For more information see http://eu.ironplanet.com