Secrets to Making Big Money from Estate Auctions

I have been attending estate auctions for over seven years, and in that time I've invested thousands of dollars into antiques purchased from estate sales. I've at least tripled that investment each time. The first auction I went to, I only had $100 in cash.

In this article I will outline a simple set of steps that you can follow in order to make significant money from estate sales. These secrets were obtained through experience and through hard lessons learned over the past seven years. I didn't always make money at the beginning. At an auction - you can certainly lose your shirt if you aren't careful.

Finding an Auction

You don't need to pay anyone to provide you with auction listings - they are all available in the public domain. There are a number of places where you can obtain the date and location of the auctions in your area. From my experience, there are auctions being run everywhere. Anywhere someone passes away, or goes bankrupt, or out of business - there will be auctions.

Newspapers

Search through the classified listings of your local newspaper - there are always auctions listed under "auctions" or "yard sales". Additionally, some newspapers print a Thursday or Friday edition "Weekender" which often lists ads for local auctions running over the weekend and the following week. Locally, this has been my primary source for learning where the auctions are.

Websites

* Auctionzip.com - An excellent national directory of auctioneers. Simply click on your state for local auctioneer listings.
* Auctioneers.org - The NAA (National Auctioneers Association). This is another great resource to locate local auctioneers.
* Search Engines - In an internet search engine, simply type in the name of your state and "auctioneer" and a number of websites for your local auctioneers will return in the results.

Word of Mouth

Ask around! Many of the best auctions are the smaller ones - the church auctions or the back country auctions where the crowd is mostly there for the entertainment (not to spend much money) and the goods are provided by the older ladies who donate some very old items to the auction! These kinds of auctions are rarely advertised, so the only way to learn about them is to ask friends and family in the area to keep there eyes open for any such auctions that come along.

A typical auction listing in a newspaper will feature the following:

* Date and location

* Time - there are typically two times, preview and auction. The preview is when the doors open for people to come in and browse the items. The later auction time is when the auctioneer will begin the bidding.

* Brief listing of items - this will give you some idea what kind of items will be available.

* Terms - make note of whether credit cards are accepted or not. Some auctioneers only accept cash. Also make note of the "buyer's premium" - this will be discussed in detail below.

Attending an Auction

Do Your Homework

If you can, show up at the earliest preview time as possible. If the preview starts the day before, then show up then with a pad and paper and browse all of the items available. Give yourself a good hour or two to examine every item and for the items that look interesting or valuable, jot down a few of the identifying characteristics including lot number if there is a number attached. If it is marked underneath - perfect, write down the markings. If it is branded on the side, then record that as well.

Once you are finished, go back home and conduct research. If you plan to sell items online, then start searching online for what other people have sold the items for. If you plan to sell the items to folks you know who collect antiques, start calling them up and asking them what they would be willing to pay for each particular item.

When you are through, you should have a list of items that you know you can sell for a certain amount, and the maximum that you will pay for it in order to make a profit. For example:

**Antique Hancock Dining Table**
Tim will buy for: $150
Maximum bid at auction: $125

**Vintage WWII Navy Compass**
Sold on Craigslist for $345
Maximum bid at auction: $300

The goal at the auction will be to only bid on the items that you know you can sell, and bid as little as possible.

It's easier said than done...trust me!

Time for the Bidding

When you walk in - the first thing you will do is obtain a bidder's card. This will simply be a card with a number on it that you'll use to bid. Approach the people at the desk or table where there is usually a computer or register - and tell them this is your first visit to this particular auction. They will ask you for your ID - they will record you address and then provide you with your bidder's card. The next time you come, they'll have your record in the system already - so you'll simply offer your name and they'll hand you your card!

Find yourself a seat if there's one available. If there's not, don't worry - the place clears out fast after the first hour or so.

This is the fun part. But it's also the most difficult.

Once the auctioneer gets going - you'll want to listen very carefully. They use certain terminology and they do it very quickly, so if you want to know when you're bidding and on how much, you need to pay close attention.

The following are common terms the Auctioneer may use during the bidding:

- Absentee Bid: This is a maximum bid placed on the item by a buyer who couldn't make it to the auction. You won't know what this bid is unless you out-bid it.

- As Is: This means that the item can not be returned for any reason, make sure you've inspected well before bidding.

- Bidder Number: The number assigned to each bidder.

- Bidder's Choice: This means that multiple items are up for bid, and if you win, you get to choose one of the items at the price that you bid. If there are three and you want all of them - you pay three times what you bid for all of them.

- Buyer's Premium: This is the fee you will pay at the end of the auction when you check out. Typically this is 10% to 15% - which means if you bid $100 on an item, you will be paying $115.

- Lot: A lot is usually a tray or a box of multiple items being sold together for one price.

- Times the Money: This is when an auctioneer is selling a lot for the winning bid times the number of items. Make sure you listen carefully for when this term is used - or you'll end up bidding far more than you wanted to.

- Reserve: When an item has a "reserve" on it, that means the auctioneer can not start the bidding any lower than a certain price that the seller wanted for the item.

Tips and Tricks

If one of the items comes up which you intended to bid on - hold off bidding until it either goes down to under $20 (preferably $5 or $10) and then bid quickly. If no one wants it - then it's yours! But more likely someone will start to bid against you. This is where the psychology of auctions comes into play.

If you notice that a particular item has four or five people trying to bid on it, simply put your card down and wait until the bidding slows down. If the bid price is still below your maximum - then calmly start bidding again.

When you win an item, if it's small, they will typically bring the item over to you immediately - so you want to have a box with you stuffed with newspaper for wrapping items up.

There are various factors that determine your advantage or disadvantage in the bidding.

* Who's behind? Believe it or not, there is a significant psychological advantage to being the bidder in the back. So much so - that you will notice when you first arrive at an auction that a group of folks actually stand in the back. If you find yourself seated in front, it's ok - you only need to bid with your card so the auctioneer can see your bid clearly, but the person behind you can't. This way they will not see whether or not you are hesitating or doubtful.

* Knowledge? If the person bidding against you doesn't know what the item is worth, they may stop far short of your planned max bid. If they do know it, they might not. Either way, do not let yourself get caught in a bidding war - remember to put down your bidders card when the bid is higher than your maximum, and leave it there.

Why are Prices So High!?

At the start of every auction - everyone has money to spend...and everyone has energy. The secret to getting the best deals is to buy when everyone else has run out of money. Also - some auctions offer a "pre-auction" at the beginning before the opening bidding starts, where they might auction off "junk" lots very cheaply. Often times these are boxes of items that the auction company pulled out of a house, peeked inside, and assumed they were junk - often times they are not. I once found a $150 highly collectible Lego set in one of these "junk" lots. There are discoveries to be made if you search carefully.

Once you can patiently wait through an hour and a half to two hours, you'll noticed people start leaving. These are the folks who had come for the entertainment - typically older folks. As the room clears out, and people start running out of cash and funds - the prices will gradually drop. Finally, beyond two hours or so after the start of the auction, you will start to notice that you can get some excellent deals.

The very end of the auction is typically when prices are rock bottom, and you can buy entire lots or boxes of items for $5 to 20 each. This is when you should be buying up as much of the good, valuable items as you can.

Paying and Leaving

Once the last lot has been bid on and the auction is over - there will be a long line at the check-out desk. You can start loading your items into your car, and by the time you are finished, the line should be much shorter. Remember when you pay, to add the buyer's premium, as well as taxes, to whatever your bid was. So if you bought a total of $350 worth of items, and the premium was 10%, with sales tax of 6%, you will pay a total of $406. Make sure to cross-check the number of items you purchased with the number of items they say you purchased. They are usually pretty accurate - but accidents do happen!

Study the Auction Houses

You might find that the auction you chose is a high-end auction where there are mostly very wealthy folks, buying up décor and collectables for their summer camps or homes. You aren't likely to find many deals at an auction like this, so just enjoy the food and the entertainment, and make note of the auction house so that you can cross it off of your return list. Although don't leave before the end - because you need to know whether there are any deals that become available at the end.

A Good Auction House

The Ideal auction house you want to find is one that is a mid-range auction. Typically these are country auctions where the auctioneer is auctioning off the contents of someone who was fairly wealthy or a home from some other state. At this kind of auction house, the prices should start out very strong, and then eventually drop down to more reasonable prices. There are typically always deals at the end - even often at the high-end auctions.

Research, research, and research

The key to successfully purchasing valuable antiques for resale is to learn the maker's marks of the very valuable items. Glassware, pottery, toys, WWII items, and all other types of antiques have particular extremely valuable brands and makers that you want to keep your eyes open for. The only way to become knowledgeable in this respect is through studying antiques books and attending auctions...and in time, that knowledge that you gain will prove to be the most valuable money-making asset in your entire arsenal.