During the pandemic shutdowns, many auctioneers in Canada just hung up their microphones and took a break. But some auction houses had been experimenting with internet-based selling, and some have seen something interesting – larger ‘virtual’ crowds not bothered by bad weather or long distances.
But not all online auctions are the same. Some websites use an automated bidding system known as a Timed auction, where item up-selling takes place over several days ahead of a posted deadline.
Richie Brothers Auctioneers, one of Canada’s largest and oldest auction houses, sells farm and heavy industrial equipment and, increasingly, real estate.
Jordan Clark lives in southern Saskatchewan and oversees farm auctions for the three Canadian prairie provinces. When the pandemic shutdown was announced back in March of 2020, they already had 68 farm auctions contracted for the next month. Jordan Clark said that after a frantic week of discussions, his company decided a Timed auction platform was the best option.
“March of 2020, we had 68 lined up for the next five weeks. We had commitments to 68 retiring farmers that entrusted us with their life’s work. We went though about four contingency plans and we ended up landing on timed auctions. It was a huge undertaking, and really only about six days to make that transition for all these farmers.”
There was some resistance to the on-line auction, but Clark says that some people were actually relieved that they could still have their auction, but without the large crowds descending on their farm yard.
“What we found early on, was that many of these people, as you can imagine, are relatively private. When you go to have a farm auction in your own farm, you’re totally exposed. You try to organize it and streamline it the best we can, but you have anywhere from 50 to 5,000 people in a yard, it’s tough to control. Many people weren’t comfortable with that.”
While auctioning parcels of land is not new, Clark says that as land values have increased, a Timed auction might be a less stressful way to make life-changing purchases.
“The timed auction, in my mind, works incredibly well for real estate because, at a live auction we try our best to give people the adequate information ahead of time so they can bid accordingly and you can move the sale right along. But, it’s a high stress situation. A timed auction does give people more time to kind of sit back and get comfortable with the process. It’s the fairest, it’s the most transparent, it involves the most bidders, and I think it provides the most comfort to the buyers.”
As values of farm land and equipment has increased dramatically over the past decade, a major change that Jordan Clark has seen is that people are planning and booking their auction well ahead of the event.
“There’s been a general shift as the value of the equipment increased. People are planning much farther ahead of time than they had in the past. Early on in the business, you’d get a phone call in January for a customer who wanted to sell in April. Now we’re getting customers that are calling us three years ahead of retirement time.”