With everything that auctioneers sell, how can they possibly know the worth of every item?
People wonder how auctioneers and auction professionals know what everything is worth. This is especially true for auctioneers who specialize in personal property, cars, livestock and equipment. Years of experience and close proximity to real-time market information is the primary way auctioneers know the value of various assets. A typical auctioneer will sell thousands of items each month and some sell thousands of lots a week. Auctioneers also supplement their experience with continuing asset-specific education and professional networking.
For many auctioneers the job is a full-time profession and passion. In addition to selling thousands of lots or items, auctioneers speak with buyers and sellers daily and are aware of market trends and information. Auctioneers also build and maintain specialized reference libraries, regularly consult online pricing information and watch the auction results from other auctions in addition to their own sales results. Auctioneer and auction professionals also perform appraisals and are called on by courts to provide expert witness testimony on the value of items and property.
When all else fails auctioneers rely in the market and the collective intelligence of the crowd to inform them of value. One of the reasons auctions works for the sale of any type of asset is that the price is dependent on what two or more people are willing to pay for an asset. This dynamic, real time pricing that combines local, region and sometimes global data makes auctions an exciting and fascinating economic engine.