Going, going, gone.
More than $161.7 billion of personal property and real estate was sold at auction in the United States during 1992, the latest year for which figures are available.
That number includes $18 billion in residential property, $6.5 billion in commercial real estate and $10.5 billion in raw land and farms, according to the National Auctioneers Association.
Impressive totals indeed, but they reveal little about life behind the gavel-a world that’s part sales, part show biz and part schoolroom.
“I love the action,” said Jim Gall, president of Miami-based Auction Company of America. “Auctions are action. Auctions are excitement.”
Indeed, the fast pace seems to be a big lure of the business, agreed auctioneers, many of whom admit to having a short attention span.
“I can’t fathom how traditional real estate brokers do their work,” Gall said. “I can’t imagine having an open house and hoping the buyer will come.”
There are about 11,000 active auctioneers in the U.S., according to a recent Gallup study. These “colonels”-a nickname stemming from Civil War days when Army commanders were ordered to sell the surplus equipment-come to the block from a variety of backgrounds, resulting in a melting pot of philosophies and personalities.
Although auctioneering continues to be male-dominated, more women are entering the field. Approximately 11 percent of today’s auctioneers are female, reports the NAA.
Hellen King, a Florida auctioneer, was previously a banker and real estate agent who caught “auction fever” after attending just one sale: “I watched these folks sell a very expensive house in a matter of three or four minutes.” She was hooked.
For Dean Kruse, auctioneering is a legacy: His grandfather and father were auctioneers, as are his two sons. “If I had a day off, I’d probably go to an auction,” said Kruse, chairman of Kruse International in Auburn, Ind.
And for David Kaufman, who formerly was a high school chemistry teacher, the auction business is a natural extension of education.
“We want to teach bidders as much as possible so they can bid more freely,” said Kaufman, who heads his own auction company in Chicago. “I think teaching is selling and selling is teaching.”
Yet whether they stride about in cowboy boots or Armani suits, auctioneers all speak the same language, that hypnotic lingo officially referred to in sales circles as “the chant.”
For those who had a hard time mastering “Supercalifragilisticexpialidocious,” the chant can be pretty intriguing. Boiled down, it’s a litany of numbers, indicating the ever-accelerating asking bid, linked with filler words.
The chant serves several purposes. For starters, it holds the crowd’s attention and creates excitement.
“If you don’t keep their attention, the audience won’t bid and the product will go for a low price,” Kruse explained.
“It also fills in when people are trying to make their decision,” said Kaufman, head of his own auction company in Chicago.
To learn the chant, and other tricks of the trade, auctioneer hopefuls sign up for school. There are 33 auctioneering schools in the U.S. recognized by the NAA where students practice tongue twisters and assorted rhymes to master the chant. (These institutions are also attended by people trying to get rid of speech impediments.)
Speed and style vary according to where you are and the type of product being sold. For example, at cattle sales, auctioneers traditionally deliver a rapidfire chant; real estate auctions tend to be slower.
“You don’t want to go so fast that people don’t understand you. But, you also don’t want to be boring,” said Auction Company of America’s Gall.
Filler words are sometimes used for clarification but more often for comic relief.
“You’ll love decorating it,” Kaufman sometimes slips in. To nervous bidders dropping out of the race: “You’ll be sorry when you go home and sober up.” Or, for slow bidders: “Does it take you an hour and a half to watch 60 Minutes?”
“Sometimes the atmosphere gets so tough you could cut it with a knife,” Kaufman explained. “That’s when you need a little humor. A little histrionics.”
At ballroom auctions, where more than one property is up for sale, musical groups may even be hired to bolster the festive atmosphere and give bidders something to watch between sales.
Auctioneers draw parallels between their business and the entertainment world. For one thing, they must be comfortable in front of an audience.
“You need to be able to read the crowd very quickly and adjust your style accordingly,” said King, vice president of Daye Inc., an auction company in Hernando, Fla. “Some crowds want to be joked with and others want to get right down to it.”
But it’s not all fun and games. You have to be careful not to let the humor get out of hand, agreed auction experts. Their goal is to get top dollar for the seller, not try to give David Letterman and Jay Leno a run for their money.
To that end, a lot of work goes on behind the scenes that auction-goers never see-such as checking boundary lines, heating and light costs, lot size, taxes, zoning laws, and more. “Even the checklists have checklists,” Kaufman said.
The auction business is driven by tight deadlines. A property that goes under auction contract usually makes it to the block in 45 days or less, with the upfront time devoted to marketing. The better the marketing, the bigger the crowd and the bigger the crowd, the higher the price is likely to go, experts said.
To attract those crowds, auctioneering has become more sophisticated, experts agreed. Computers are commonplace and direct mail is a key method for reaching potential bidders.
“In my grandfather’s day, you knew everyone by name,” Kruse said, explaining the auctioneer would simply write down the winning bidder’s name and collect later. “Today, bidders usually are registered and pre-qualified.”
Kruse said auction life has given him the chance to meet many people, including celebrities, sports figures and politicos. Attending some of his sales: Bob Newhart, Lucille Ball, Jimmy Carter and Jim Thompson.
But you can’t judge a bidder by his cover. Multimillionaires may show up in tattered jeans and dirty sneakers. Sometimes folks bring cash stuffed in socks-as much as $20,000 or $30,000, said Rick Levin, a Chicago-based auctioneer. “Which is why it’s a good idea to have a cop on premises.”
Audiences vary in personality, auctioneers observed. In New England, auction-goers are “stuffier,” Gall said. “They sit with their arms folded and kind of stare you down. In the South, body language is more open … there’s a lot of tapping toes and snapping fingers.” The Midwest is “somewhere in between.”
What’s on the block also influences the audience. Commercial real estate bidders tend to be pretty serious, auctioneers said. Yet residential bidders get more emotional. Kruse tells the story of one man who had a heart attack after making the winning bid on a property. When he regained consciousness in the hospital, his first words were, “I want that house.”
Levin likes to warm up bidders with a mock auction of the Sears Tower; he has sold it 60 or 70 times, getting as much as $1.1 billion in cash. “I believe that’s an offer Sears would take,” Levin quipped.
In many ways, being an auctioneer is most similar to being a hired gun.
“You’re the guy who saves the day,” Levin said, explaining that often a property may have languished on the traditional real estate market for several months before the seller turns to the auction process.
And these are hired guns who will travel.
Auctioneers typically spend much time on the road. King recalls working 62 auctions in 32 cities in 11 days. Kruse is gone 40 weeks a year. Kaufman says simply: “I’m an American Airlines platinum (frequent flyer) card holder.”
Yet auctions are not fire sales, experts stressed. This may have been true once, but today auctioning is simply another marketing tool for real estate, another way to determine market value.what someone is willing to pay for something at a given point in time.
“I get a feeling of capitalism at its best-the free market in action,” Levin said. “The world is so full of rules and regulations. It’s a simplistic notion . . . the highest bidder wins.”
