Estate auctions are one of the favorite types of auctions for a large segment of the auction buying crowd. They come for all the great items, from those specialty items to the everyday stuff. Of course, they're hoping to get some bargains, too.
From the other side of the aisle is the Seller, the family... perhaps a spouse, the children, siblings, cousins, aunts & uncles and parents. Of course, an estate auction may be from the result of the passing of a relative or the living estate of a relative that is no longer able to care for their self and having to let go a lifetime of acquisitions... their treasures of memories, collections of fondness and passions, to that special chair they curled up in to watch TV and many other personal possessions.
As an auctioneer, this is the side that is often the most difficult to handle. I'm not talking about the problems that sometimes arise, when a family member thinks something should be worth a lot of money ("because it belonged to great-grandma"). No... the hardest part is dealing with the emotional side of their situation, combined with the economic side they now have to deal with. In some cases, the auctioneer may only be working with an executor with no real strong family ties, but in most cases, it is one of the family that has been chosen for this daunting task, which just adds another emotional load to their own feelings that they are also having to deal with.
My heart goes out to these folks, as I take on the role to help them solve just one of the many problems they have to face. Yes, it's part of the way in which I make my living, but it doesn't make it any easier when I have to tell them that grandma's silver-plated ring, that she loved so much, wasn't worth more than maybe $35. The double-edged sword... since it's not worth much, then "Jenny" decides to keep it OR if it turns out to be worth $3500, "Jenny" decides to keep it. Either way... there are a lot of emotions and feelings that folks have to deal with and sometimes it's hard to let go of things with the memories attached, no matter how big or small they may be in actual value. Then, to watch strangers dig through the "stuff"... those lifetime treasures... well, below is a link to this "side of the story," which provides more insight to this than I can start to offer. After you read the article, also read the comments:
Going, Going, Gone - Sold To The Highest Bidder
Jim Ford, Lic. 12478
Texas-National Auctioneers
Sunday, May 04, 2008
Saturday, March 29, 2008
Texas Auction Law on Escrow & Paying Clients
Texas State Auction Laws requires Auctioneers to maintain an Escrow Account. Well, there is an exception to this rule, and I'll discuss that, as well.
What is an Escrow Account?
An Escrow Account is a separate and distinct bank account that is used to hold "other peoples" money. This would include any money that is taken in from an auction sale for a client, as the auctioneer waits for all funds to clear the bank, whether it's cash, checks, credit card funds, etc.
Why does an Auctioneer have to have an Escrow Account?
By law, the auctioneer can not "commingle" funds from clients and their own business operating funds. So, they may have their own business bank account, from which they pay their own bills and a separate Escrow Account for monies held for their clients as a result of the auction sales. This prevents the auctioneer from making the mistake of using the clients money to pay his bills and insures that the money is available, when it comes time to pay the client.
How it's supposed to work...
The auctioneer may hold an auction sale for one or more clients. All of the funds generated from the sales are deposited into the Escrow account. By Texas Law, these funds must be deposited into the Escrow account within 72 hours of the sale. After all monies clear the bank (and the auctioneer is satisfied that he's not going to get stuck with a bounced check or something of that nature), the auctioneer then sends the client a check for their goods, minus commissions and/or other expenses that may be due from the client. The auctioneer then makes a check out to his "business" for the commissions and expenses owed for their services and deposits that in his/her Business account.
If everything is done properly, then you wouldn't have this problem:
** High profile auctioneers accused of cheating clients **
How long does an Auctioneer have to pay the client?
By Texas Law, unless otherwise specified in a written contract, the auctioneer has to pay the client within 15 banking days of the auction.
Does an Auctioneer have to have an Escrow account?
Yes... UNLESS they pay the client immediately after the sale or the written contract stipulates other terms, such as sight drafts. So, if the auctioneer accepts checks and credit cards, he/she would normally be required to have an Escrow account, unless the auctioneer has plenty of cash on hand and can give the seller a check on the spot, and absorb any bad checks or credit card charge-backs, until such matters can be resolved. There are a LOT of reasons why this is a BAD IDEA for any auctioneer to even consider. However, I'll leave that as another topic for a future discussion.
Jim Ford, Lic. 12478
Texas-National Auctioneers
What is an Escrow Account?
An Escrow Account is a separate and distinct bank account that is used to hold "other peoples" money. This would include any money that is taken in from an auction sale for a client, as the auctioneer waits for all funds to clear the bank, whether it's cash, checks, credit card funds, etc.
Why does an Auctioneer have to have an Escrow Account?
By law, the auctioneer can not "commingle" funds from clients and their own business operating funds. So, they may have their own business bank account, from which they pay their own bills and a separate Escrow Account for monies held for their clients as a result of the auction sales. This prevents the auctioneer from making the mistake of using the clients money to pay his bills and insures that the money is available, when it comes time to pay the client.
How it's supposed to work...
The auctioneer may hold an auction sale for one or more clients. All of the funds generated from the sales are deposited into the Escrow account. By Texas Law, these funds must be deposited into the Escrow account within 72 hours of the sale. After all monies clear the bank (and the auctioneer is satisfied that he's not going to get stuck with a bounced check or something of that nature), the auctioneer then sends the client a check for their goods, minus commissions and/or other expenses that may be due from the client. The auctioneer then makes a check out to his "business" for the commissions and expenses owed for their services and deposits that in his/her Business account.
If everything is done properly, then you wouldn't have this problem:
** High profile auctioneers accused of cheating clients **
How long does an Auctioneer have to pay the client?
By Texas Law, unless otherwise specified in a written contract, the auctioneer has to pay the client within 15 banking days of the auction.
Does an Auctioneer have to have an Escrow account?
Yes... UNLESS they pay the client immediately after the sale or the written contract stipulates other terms, such as sight drafts. So, if the auctioneer accepts checks and credit cards, he/she would normally be required to have an Escrow account, unless the auctioneer has plenty of cash on hand and can give the seller a check on the spot, and absorb any bad checks or credit card charge-backs, until such matters can be resolved. There are a LOT of reasons why this is a BAD IDEA for any auctioneer to even consider. However, I'll leave that as another topic for a future discussion.
Jim Ford, Lic. 12478
Texas-National Auctioneers
Subscribe to:
Posts (Atom)