Few things are as satisfying as auctions. Admission is free, everyone can participate in the bidding, sellers are assured of moving all of their merchandise and getting paid on the spot, and buyers can go home as owners of items that they won by outbidding the competition. Auctions are truly a win-win event for everyone.
More and more frequently, farm equipment and heavy machinery are sold and bought using auctions. From estate sales to purely agricultural events, both buyers and sellers are increasingly aware of the advantages of selling and purchasing machinery at auctions.
As buyers, you can get high quality, name brands at lower prices than you would pay for new. Even if you already have good equipment, you can find extra pieces for backup or occasional use. You can often get just what you need without paying the price for new. The main benefit of buying used equipment is the value. There’s no “show room premium” attached to the price, so buyers and sellers have the advantage of the best value, determined by the auction selling price.
For equipment sellers, you can expect faster results than classified ads or word of mouth. Auctions are advertised widely, and the number of prospective buyers is multiplied. If your equipment is well-maintained, the price you sell for will likely be higher than trade-in value, and you can expect a quick sale and cash in hand shortly after the auction.
Prospective buyers do need to do their homework, though. Most sellers represent their equipment accurately, but most equipment is sold “as is.” A little inspection and a few questions prior to the auction can usually ensure a fair price for the item’s condition. Here’s how to know what you’re getting:
- Check for any warranty still remaining. It’s unusual, but does occur that some or all parts are under some type of warranty
- Look to see what’s new; what’s been replaced, and ask why
- Check the hours on the engine, the wear on the tires, and other indicators that can be used to ascertain the usage and history of the item.
- Make sure you can still get replacement parts. One of a kind, or antiques may be pretty, but they’ll end up with weeds obscuring them if they can’t be repaired and kept in service.
- Check fair market value before the auction. There’s a source for every type and piece of equipment that can be used to arrive at a price range. Find it and use it.
The size, type, age and kinds of tools and equipment that can be purchased at farm auctions is virtually unlimited. Anyone in the market for farm equipment and implements, from small items such as compact tractors and single-row cultivators up to and including the largest combines and harvesting machinery can find what they’re looking for. And unlike some sales, you’ll seldom find worn-out, abused or neglected equipment on the lot, unless it is identified as such. In fact, there are several ways items are acquired and reasons for their sale. Most are based on business decisions by the sellers, including:
- Changing business base, or shift in type of work (e.g., purchased by another company)
- Upgrade to larger or different type equipment
- Downsizing, for any number of reasons (not all bad).
- Changing priorities making some equipment obsolete.
- Retirement (either the equipment or the seller)
It used to be that a prospective buyer either had to attend every auction in person, or send a proxy with instructions on what to bid on and how high to go before stopping on each item. While attending in person and managing one’s own bidding is still the best choice, the distances from buyers to the auction site often prevent the best matchup between bidders and equipment. How and where to bid, consequently, have adapted to include a wider audience and to ensure that equipment is available to a larger group of prospective bidders. Some of the ways to get your bid in are:
- In person day of the auction – inspect the equipment, decide on top bid, etc. Still the best way.
- Absentee bid – this usually requires qualification in advance. It’s still good way to bid if you can’t be there, but a bidder can lose out by limiting his top bid.
- Internet bid (when available) – Bidding through the internet lets you follow the bidding as though you were present. Still not as good as being present, but online auctions are often open for several days and you can increase your maximum bid as the closing time approaches.
Not all items are sold on site at auctions. The time and expense of transporting heavy equipment to the auction site is cost prohibitive; in some cases the buyer is closer to the seller’s location than the auction itself. For both buyer and seller, then, how to transfer and transport your items is an important factor in the decisions of where to sell, when to sell, and where and when to buy.
After the sale, the auction company invoices the buyer and forwards all the paperwork that’s required. The buyer then transfers money into an escrow account. Once that process is completed, the seller is notified that the equipment has been transferred, and can be released. It is usually the responsibility of the buyer to arrange for transportation of the equipment from either the seller’s location or from the auction site, if located there.
For those who do not have the capability of transporting large, heavy equipment there are many companies that routinely move cargo from one location to another. Lowboys can be hired by the job, rented (although all licenses and certifications required usually make renting a less favorable choice), or other arrangements can be made to move the equipment to the buyer’s choice of location.
There are many advantages to buying and selling farm and heavy equipment at auctions, particularly with the advent of the internet, where more potential buyers can view and bid on equipment, and where many items are sought out by buyers who are ready to pay top dollar.
If you have tools, farm machinery or heavy equipment that you want to quickly turn into cash, call Sohn and Associates for a confidential consultation and help in planning the sale of your vehicles, tools, and machinery.