Differences in the Types of Auctions That Take Place Around the World

Auctions are those events where properties or goods are sold to the highest bidder. Auctions are mostly public events, where bidders make a series of bids and purchase a particular item for a high price. During auctions, bidders decide the price of an item rather than the seller. It depends on bidders to decide the amount they would want to pay for a specific item. During an auction, a bid is a proof of a legal binding. Bidders agree to pay the amount that they have bid. In a high profile auction, bidders may have to pay a deposit in escrow accounts or give a proof that they can pay for those items.

Types of Auctions:

Different types of auctions take place around the world. Below mentioned are some types of auctions:

1. English auction:
This is a basic type of auction. In this type, people can see the item and then start bidding. Bidders slowly raise the value of their bid until everyone gives up. The highest bidder is the winner. An auctioneer manages an auction, keeps records of the on going bid and decides the winner. Sometimes, the seller will quote a minimum amount for an item to the auctioneer, below which the auctioneer cannot sell that item.

2. Dutch auction:
In this type, the auctioneer sets a particular price and then gradually lowers the price. People in public will start bidding and later decide which prices are suitable for the item. A seller may use this type of auction to sell large quantities of same products to the public. For instance, a seller may want to sell a large amount of hay and will thus, decide to sell this hay to people for the same amount, once a reasonable price is decided.

3. Silent auction:
In this type, the bidders in public will present their bids in a sealed format. These sealed bids open at the same time and bidder with the highest bid wins. There could be a modification in this type of auction. The bidders are allotted a specific period to bid. They can roam in a room displaying the items, and write their bids on an associated sheet of paper. The bidders are allowed to see bids of other bidders and can choose a higher price for an item. At the end of the allotted time, bidder with the highest bid is the winner.

Examples of Auctions:

Auctions can be of two types either public or private. Sellers may trade any kind of items in both types of auctions. Some areas where auctions take place are:

1. Antique auction: An antique auction consists of a trade opportunity as well as provides entertainment.

2. Collectable auction: In a collectable auction, the seller may put up collectables like coins, vintage cars, luxury, stamps, real estate, and luxury for sale.

3. Wine auction: In wine auction, bidders can bid for rare wine, which may not be available in retail wine shops.

4. Horse auction: Bidders can bid for young horses of the best breed.

5. Livestock auction: In livestock auction, bidders can buy pigs, sheep, cattle, and other livestock.

The other examples of auctions may not be public. These auctions are for bidders from corporate levels. Some examples of private auctions are:

1. Timber auction
2. Spectrum auction
3. Electricity auction
4. Debit auction
5. Environmental auction
6. Auto auction
7. Electronic market auction
8. Sales of business auction

Bidders in an auction need to examine the items displayed and decide an appropriate price for an item. Thus, auctions help buyers in getting the best deals and in gaining better profits for sellers.

Real Estate Auctions – The New Land Rush

On a sunny afternoon in Florida, an energetic crowd gathers on the lawn of a high end luxury estate. A loud and eager banter between an auctioneer, a group of bidders and bidder assistants fills the air. For several minutes the auctioneer asks for the next highest bid and the bidders respond. Suddenly the bidders grow silent. The high bidder holds his breath in anticipation of winning the auction. The auctioneer calls for one more bid. In a loud clear voice which rolls over the audience he says, “Fair warning, last chance” the auctioneer pauses, “SOLD!” And in less than 10 minutes another multimillion dollar estate has changed owners.

Successful real estate auctions like the one above are happening all over North America and the Caribbean. Recently real estate auctions have been on the rise, the increase in popularity is partly driven by growing inventories and fading buyer confidence. Properties that were selling in weeks using traditional methods are now languishing on the market unable to attract buyers even as seller’s lower prices. Many say the real estate boom is over but savvy buyers and sellers are profiting from real estate auctions.

Real Estate Auctions Work in Up or Down Markets.

Regardless of trends or market cycles, real estate auctions provide an open and transparent process for buyers and sellers. Properly conducted real estate auctions attract ready and willing buyers and motivate them to act now.

The auction method removes the “wait and see” attitude which serves to further depress real estate values. Buyers are always concerned about overpaying. Buyers gain confidence with their purchases at real estate auctions because they can see what others are willing to pay.

When market demand is high and inventories low, real estate auctions can deliver selling prices well above what a willing seller would have accepted in a negotiated private treaty sale. In good selling climates many property owners using traditional real estate methods; negotiating with one buyer at a time, leave thousands of dollars of equity on the table. During up markets real estate auctions are the best way to establish top market price.

Evaluating Your Real Estate for Auction

Not every property or seller for that matter makes a good candidate for auction. First of all sellers must be ready to sell now and for the current market value. Also a real estate auction will not fix problems caused by a downturn in market value of your property, if you owe more than a willing buyer will pay, be prepared to come to closing with your check book.

Properties that do well in real estate auctions have a high uniqueness factor. Ask your self, “What makes my property different from most others?” Maybe you own a resort property or high end luxury home, commercial properties and land do very well at auction. Real estate auctions thrive on uniqueness. If your property is like everyone else’s, the best thing you can do is offer the most competitive price.

Most importantly sellers must be reasonable about setting a minimum bid. A seller must look at the lowest, most current comps and price below that to generate the interest and urgency necessary for a successful real estate auction. Once the auction begins and qualified bidders start competing against one another you can watch the selling price increase.

Locate a Qualified Real Estate Auctioneer

Start by checking with the National Auctioneers Association, the best real estate auctioneers belong to this organization. These real estate auctioneers are well trained and adhere to a standard of practice and a code of ethics. Many attend the annual International Auctioneers Conference where the latest techniques and innovations in the real estate auction industry are presented.

Find out if the company you are interviewing is a full time real estate auction firm. Many real estate agents are getting auction licenses yet have no experience with the auction method of marketing. Conducting a successful real estate auction is nothing like (private treaty) traditional real estate sales. Go with a real estate auction pro.

You’re probably better of with an auction house that specializes in real estate auctions. There are many qualified auctioneers who have generations of experience selling personal property; furniture, dishes, lawn equipment and the occasional rare painting. Selling real estate at auction is a complex matter that should only be attempted by full time experienced real estate auction professionals.

Commissions and fees may vary, sellers must pay all marketing expenses up front and buyers typically pay 10% of the sales price to the auctioneer of which a share goes to participating real estate agents.

Types of Real Estate Auctions

Auctions are effective because they create a seller’s market. Professionally conducted real estate auctions create urgency, a reason to buy today and competition for the property. Terms and conditions of sale are established ahead of the auction. Real estate auctions will follow one of these three approaches:

Absolute Auction

The property is sold to the highest bidder regardless of price- using this process often returns the highest sale price.

Minimum Bid Auction

Seller agrees to sell at or above a published minimum bid price – this method is useful for internet auctions.

Seller Confirmation or Reserve Auction

With a reserve auction, the seller “reserves” the right to accept or decline any bids usually within 48 hours of the auction. Reserve auctions are used when there is a lien on the property from a lender or a court ordered sale with a minimum selling price.

Universal Elementary Education – An Experiment in Karnataka

Parents of the 32 students studying in standard seven in a school at a non-descript village in the Karnataka State of Southern India staged protests last June. The reason? They wanted their children, especially girls, to continue their education beyond the seventh standard, without travelling to neighboring villages; and the local school in the Tigalarapalya village where they were studying so far did not have classes beyond seventh. So they forced the authorities to add higher classes to the school.

Yet in 2000 and 2001, the same parents had resisted when the government officials, volunteers and non-government organizations pleaded with them to send their children to school. They preferred to send them to work in the silk-weaving factories which abound in their villages, so they could clear the loans they had taken from the factory owners. The rural district of Magadi on the outskirts of Bangalore city has many such villages, where the children work in hazarduous factories. Magadi Makkala Dhwani – a group of four non-government organizations, supported by UNICEF, had then approached both parents and factory owners and educated them on the rights of children and sensitized them to the hazards of working in factories.

The most heartening feature about the protests is that these were not headed by NGOs. It was a protest by the parents and students,which showed the concerted efforts by Magadi Makkala Dhwani had paid off in creating awareness about the importance of education.

Another interesting incident occurred last August. Around 26 child labourers were admitted to special residential schools after they were rescued by deputy Labour Commissioner and a team of inspectors and representatives of NGOs working on the pilot project introduced by the UNICEF and Norwegian Agency for Development. The three-year NORAD-UNICEF pilot project was implemented through Karnataka Government in 2002 as a test case in the districts of Davangere and Gulbarga. Since the last two-and-half years, the NORAD-UNICEF office succeeded in rehabilitating about two thousand child labourers working in chronic work situations in the two districts. Several self help groups and youth organizations took part in social mobilisation and mass awareness programmes like enacting street plays on the evils of employing under-aged children and the importance of sending them to school.

The ball that was set rolling in the 90s in the wake of the National Policy on Education through numerous programmes such as World bank-assisted District Primary Education Programme (DPEP), has gained momentum in the last five years through Sarva Shiksha Abhiyan, the integrated national programme for Universal Elementary Education, which aims to provide quality education for children between the ages of 6 and 14 years by 2010. The drive, launched in 2001, aims to reduce the number of children who are out of school, narrow gender and social gaps and improve the quality of education.

Education is the only hope for India to change its current status of a “developing country” into a “developed country”. And she cannot make this change happen unless she ensures that the 59 million children out of the 200 million children in the age group of 6-14 who are currently out of school enrol in proper schools and learn.

What is keeping these 59 million children outside the school? Problems of access, poor quality in school processes, lack of participation by the community in the school affairs and poverty are among the key barriers to universal education. In Karnataka alone, over 300,000 out-of-school children have been mainstreamed during the past three years. But what is causing concern is the national average drop out rate for children in 1-8th standard, which stands at 57% and an alarming dropout rate of 60% for girl children for the same standards.

Once children reach school, a variety of factors determine whether they will learn and acquire the skills to pursue formal education or drop out. In many cases, a child from a poor/rural family is unable to comprehend and cope up with the pace of other formal school children. Teachers are not able to identify or diagnose the competencies that a child lacks and provide him/her with supplementary teaching. It is not uncommon to come across children who have been to school but remain functionally illiterate. Disillusioned youngsters, who may have completed primary schooling and are unemployed, act as a disincentive for education of other children in the community. Younger children and their families see the writing on the wall – primary education does not always improve the situation of the poor unless what they learn is perceived as being relevant to their life situation.

The enrolment drives for out-of-school children, child labour projects and innumerable remedial education and bridge courses have emerged in the last 10 years, started by district and local government authorities and assisted by NGOs, corporate bodies, local business and the community. These bridge or condensed courses have helped children to re-enter the formal stream, prevented dropouts and improved the learning achievements of children in school.

There have been several initiatives taken by private institutions, or government in partnership with the private institutions, that have borne good results.

The Nali-Kali(literally, dance-learn) strategy of teaching developed by teachers in Mysore has adopted creative learning practices to help retain children in school and bring in those not attending school. This method creates the right ambience for the child to learn in a child-friendly fun-filled way through educational toys, songs, games, story telling, all made by the teachers themselves. This method eliminates the formal system of roll calls, examinations, promotions and ranking.

The initiative has helped improve enrolment, particularly of girls, and has been expanded to cover more areas within Mysore and 10 more districts in the state.

The Akshara Foundation, an initiative with the Infosys backing; has worked in the slums of Bangalore to touch the lives of over 60,000 children in and around the city of Bangalore. The young children do not have to follow their mother to her workplace as she goes out to earn her livelihood. Mother of Satisa, who studies in one such pre-school, says happily, “my son does not loiter on the road when I am out on construction. He has learnt to read and write!”

To take care of children who have to work to earn a livelihood Akshara and CWC (Concerned for Working Children) have partnered with the Department for Public Instruction to start Transit School Program in 8 pilot locations in the city. Transit schools are open from 8 am to 8 pm for the convenience of the children. Working children come to the centers (mostly in government schools) at convenient times during the day.

Azim Premji Foundation focuses on “quality of education” and what happens inside a school, taking note of the numerous initiatives taken by the government. Its CEO Mr. Dileep Ranjekar says that their programs demonstrate “proof of concept” that can be replicated at a large scale in the government system. The Accelerated Learning Program and the Child Friendly School are examples of such programmes.Large numbers of children have been mainstreamed through specially devised bridge courses.

The foundation has developed CD based, child centric and interactive curricular content in local languages that is being used by thousands of schools across five Indian states. The CDs are free for all government school and non-government schools that cater to children from socio-economically weaker sections. Other schools can have it at a very nominal charge.

Mr. Dileep Ranjekar says, “We have tried to use IT to enhance the curricular learning of the children as well as to create excitement in the schools. The attendance of the children is significantly up on the days they are scheduled to work on the computers.”

There are some more remedial steps that government/NGOs can take:

  • Mobilise and organize working children into a self-managed association/organization. Educate them about their rights – right to education, freedom from exploitation, hazardous and non-hazardous work, nutrition and emotional and physical well being.
  • Take a close look at what is happening inside the school. How are children- girls, children from disadvantaged groups, children in difficult circumstances treated?
  • Set up a help-line line to reach out to working children in distress, confront and work with the government, and employers to ensure the rights of children.
  • Encourage older children to talk about their future – training, employment and self-employment opportunities and link education with future prospects.


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