Auctions were used by the Roman Empire to dispose property and estate items. The mechanism used was known as the “atrium auctionarium.” It is unknown if these auctions were ascending or descending bid auctions, however the name of the market mechanism would suggest that they were ascending. The word “actus” in Latin means increasing, and since it is incorporated into the name of the market it is assumed that bids were made in an increasing fashion.
Within the Roman Empire the “atrium auctionarium” was also used by the soldiers to sell goods acquired “sub hasia”(under the spear). Probably the most bizarre account of early auctions concerns the year 193 A.D. when the entire Roman Empire was put on the auction block after being sacked. Aside from the earlier accounts of the Roman auctions, there also exists evidence of Buddhist monks in China using auctions to fund the creation of temples, as it became customary to auction off the property of deceased monks for this purpose.
The earliest modern era records of auctions appeared in the Oxford English Dictionary in 1595. Therefore, the presence of auctions in England preceded this date yet but how much is not known. Following the appearance of auctions in the Oxford English Dictionary, the London Gazette often reported the auctioning or artwork at coffeehouses and taverns throughout London in the late 17th century. Early auction houses were created in the 18th century. Sotheby’s was created in 1744 and Christie’s was created in 1766.
Early records of auctions in America came from the South, where slaves were frequently sold at auction. Estates were also liquidated through auctions. Surprisingly, because societal norms at the period did not encourage auctions, it was usual for the owner of auctioned items to stay unidentified.
Aside from the early modern records of the use of auction mechanisms in England and America, auctions were used in the Netherlands and Germany as well in the later part of the 19th century. Auctioning in the Netherlands dates back to 1887 when it was used for the sale of fruits and vegetables. Reportedly, a grower named Jongerling arrived at the inland harbor, Broek op Langendijk in North Holland. Upon arrival he discovered a strong demand for his produce and instead of liquidating his produce in the usually customary fashion of selling to a specific dealer, he decided to allow the buyers to compete with each other by using an auction.
In the same year as Jongerling in North Holland, fisherman in Germany began to use auctions to sell their catch when arriving in port. These fish auctions allowed the fisherman to rapidly liquidate their catch and spend more time fishing to satisfy consumer demand.
The Traditional Property Auction
At first glance, the traditional method of selling a home at auction appears to be the best option. On the surface, there don’t appear to be many disadvantages; but, as you enter the auction house and your lot arrives, you’ll quickly notice things.
It’s true in many cases auctioneers and sometimes even estate agents who advise you to auction your property may not have your best interests at heart. For those who’re looking for quick sale property auctions, selling a house with low fees and costs, or a 100% guaranteed sale then, despite how beautifully house auction sales are dressed up, it might not be the route for you.
However, if you are considering an auction as an option it’s essential to be aware of the pitfalls ahead.
The Modern Method of Auction
This guide wouldn’t be complete without mentioning an alternative method for auctioning your house, referred to as the Modern Method of Auction. The difference between this and a traditional auction is that contracts aren’t exchanged at the point of a successful bid.
Nonetheless, the number of properties sold this way is growing, and many high street agents act as the catalyst for sellers to go down this route. While it is a valid option, with mounting concerns from industry bodies and complaints stacking up from dis-satisfied vendors, it’s essential for prospective sellers to ensure they’re aware of the risks of such a method, and carrying out due diligence to ensure they avoid losing out.
Which method is “better”?
At a glance, the sale speed from the moment a sale is made is 28 days for traditional auctions and 56 days for MMoA.
Traditional auctions secure the sale at exchange and the sale is legally binding. The Modern Method of Auction requires a buyer’s reservation fee to commit them to the sale however, they are able to pull out during the 28 days in up until exchange after confirming their winning bid with the only penalty being the loss of the fee paid.
And lastly, price. Both options look to secure the best price for the seller while charging the buyer separate fees and different stages of the process.
Generally, an option chosen will be based on client needs and also the recommendation of those around them.