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Different types of government auctions

Different types of Auctions

Auctions are quite common and they bear an ancient lineage which can be traced back to around 500 B.C. Auctioning is the process of selling or buying goods by throwing bids. The one who says the highest bid wins and gets the item. Auctions are conducted on a great variety of items such as real estate property, vehicles, art objects, sports items, coins, stamps, and other collectibles. For instance, there are famous car auctions where people bid for classic cars, antique cars, and new cars, too. More generally, auto auctions are conducted in a similar manner. The more the item in demand, the higher the bid goes for it.

There are different types of auctions which are categorized according to their nature. The other factors which determine the types of auctions include the procedure of bidding, and the method of price formation.

• Silent Auction- This is the common English auction where written a document is used for keeping a record of the bids. When the auction ends, the highest listed bidder is declared the winner. This is a common auction held at charity events where a great number of items are auctioned. As the event starts, a bidder submits his bid on paper. The silent auction is sometimes held on sealed bids.

• Digital art auction- This is a comparatively long event which is primarily organized for unreleased works. Such works include recordings, various software, and drug formulas. The bidder submits his bid to the seller with a predetermined price. The seller then reviews all the bids and closes the deal with a definite price. Those whose bids are either close or exceeds the seller’s price, is the clean winning bidder.

• Open outcry auction- This is an audible auction where sellers declare the bids openly before everyone. This is especially conducted in case of police auctions, or auction selling seized vehicles. A common term for such an auction is commodity exchange or stock exchange. Here the transaction occurs on the trading floor and traders can enter bids orally. A unique feature of this auction is that several transactions can take place simultaneously in the trading ring. Today the outcry auction has been replaced by electronic trading.

• Unique bid auction- Here the potential bidders are asked to post blind bids offering them a wide range of prices. There is however, a limit fixed on the prices. This is a different type of auction where the lowest or the most unique bid wins. Online car auctions are a good example of this type. The auction is conducted over the internet with the means of the auction software. Sometimes you can get cars 90% off market value while auctioning online.

• Buy out auction- This auction is dictated by a definite buy-out price accepting which a bidder can win the deal. The seller here sets the buy-out price.

• Combinational auction- As the name suggests, bidders can bid on various combinations of items such as packages of commodities instead of individual items.

• Absolute auction- Here you will get no minimum amount of bid or any pre-determined starting bid. Once the ultimate bidding price is reached the bidding winner has to buy the property no matter how much it is priced at.