How do the logistics of an auction by lots work vs. entire

Donald Trump

When you see land for sale you might often see


Lot 1. 50 acres
Lot 2. 30 acres
Lot 3. 20 acres
Lot 4. The entire (100 acres)


Suppose you want to buy the entire but, if you can't get that you are willing to buy Lot 1. What way does it work? Do they start with Lot 1 and see how high that goes and then work their way down and if Lot 4 makes more than the other three combined they sell it as that?


Or do they do some kind of preliminary bidding on the first 3 lots and then decide to have the live auction on either (1,2,3) or 4?


Or, alternatively, suppose I was willing to pay 11k an acre for Lot 1 and that is the only one I am interested in. But the next highest bidder only pushed me to 10k. Then Lots 2 & 3 also get bid to 10k. But when Lot 4 comes up, it gets bid to a total of 1000 over the previous 3 summed. Even though I was willing to pay a bit more for the on I wanted which might have increased the total.

Reggie.

Donald Trump wrote: »

When you see land for sale you might often see


Lot 1. 50 acres
Lot 2. 30 acres
Lot 3. 20 acres
Lot 4. The entire (100 acres)


Suppose you want to buy the entire but, if you can't get that you are willing to buy Lot 1. What way does it work? Do they start with Lot 1 and see how high that goes and then work their way down and if Lot 4 makes more than the other three combined they sell it as that?


Or do they do some kind of preliminary bidding on the first 3 lots and then decide to have the live auction on either (1,2,3) or 4?


Or, alternatively, suppose I was willing to pay 11k an acre for Lot 1 and that is the only one I am interested in. But the next highest bidder only pushed me to 10k. Then Lots 2 & 3 also get bid to 10k. But when Lot 4 comes up, it gets bid to a total of 1000 over the previous 3 summed. Even though I was willing to pay a bit more for the on I wanted which might have increased the total.

I often wondered this myself

_Brian

I had presumed they start with Lot4 and try wipe the whole thing in one go.

grindle

_Brian wrote: »

I had presumed they start with Lot4 and try wipe the whole thing in one go.

If they kept it to Lot 4 with the typical property-style Dutch auction they'll probably sell at a price floor that would likely make less money than selling separate lots, no?

There are more wallets/prospective buyers available when splitting land up, it seems much more likely to make more money unless the whole of Lot 4 is desperately wanted for industrial use rather than farming.

Victor

It would be more common to use such lots (parts and the whole) with sale by private treaty and/or by tender, where they are dealt with in parallel.

I'm not sure if such lots are used at auction (in the traditional sense), as such auctions would necessarily be held one after another.

One way to do it would be to auction the parts first and make their sale subject to the final auction, which would be for the whole. That way, if the final bid for the whole is greater than all the final bids for the parts, the final bidder of the whole gets everything. If nobody bids greater than the sum of the parts, then it is sold as individual lots.

grindle

Victor wrote: »

One way to do it would be to auction the parts first and make their sale subject to the final auction, which would be for the whole. That way, if the final bid for the whole is greater than all the final bids for the parts, the final bidder of the whole gets everything. If nobody bids greater than the sum of the parts, then it is sold as individual lots.

A bit of a gamble for the partial buyers but could result in somebody highballing for the whole lot if the land is attractive, this seems like a good way of going about things if needs must.
There must be a working auctioneer on boards who could chime in, they've likely had something like this happen before if they sell rural property.

Say my name

There's no complexity about it.

If you want to buy the entire. Don't bid on the preceding individual lots.
If the individual lots amount up to more than the entire bid then it's sold in lots.
If the entire makes more than the sum of the lots then it's sold as an entire to one bidder.

Grueller

The lots will be auctioned first and their sum added up.
The entire will then be auctioned.
If the entire makes more the auctioneer will return and give the lots another go. If these are then higher, the entire will get another chance.
This process will continue until the auctioneer and vendor are happy that the best price has been achieved.

Donald Trump

Grueller wrote: »

The lots will be auctioned first and their sum added up.
The entire will then be auctioned.
If the entire makes more the auctioneer will return and give the lots another go. If these are then higher, the entire will get another chance.
This process will continue until the auctioneer and vendor are happy that the best price has been achieved.

In such a scenario, do people ever bid against themselves? I mean up their bid even though nobody is bidding against them?

Edit: Here is an example
https://www.independent.ie/business/farming/farm-property/leinster-farm-sales/stud-farm-of-top-trainer-tony-martin-withdrawn-from-auction-37313470.html

Arodstown Stud, the residential 88ac stud farm belonging to trainer Tony Martin at Moynalvey, Summerhill in Co Meath was withdrawn from auction after being bid to €1.625m in its lots and €1.4m as an entire.

It seems unusual that they started bidding on the entire at less than the sum of the lots, unless they did that one first, or else went back to the lots after bidding on the entire

GrasstoMilk

Say my name wrote: »

There's no complexity about it.

If you want to buy the entire. Don't bid on the preceding individual lots.
If the individual lots amount up to more than the entire bid then it's sold in lots.
If the entire makes more than the sum of the lots then it's sold as an entire to one bidder.

Yep that's it!

Say my name

GrasstoMilk wrote: »

Yep that's it!

I've seen the Master from Carnew at work.:p

They could go ten rounds before it's all done and dusted.

Grueller

Say my name wrote: »

I've seen the Master from Carnew at work.:p

They could go ten rounds before it's all done and dusted.

The Mighty Quinn!!!