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What is an auction? How does it work in practice? Can anyone participate in an auction of cars, motorcycles, real estate, jewelry or other types of materials? What is the minimum bid to participate in an event like this? Is it necessary to have a lot of money to buy a car seized by the Federal Highway Police or not?
Although many people don't even realize it, auctions are millenary. It is believed, according to studies carried out by historians, that the auctions were created by the Assyrian group, about two millennia before Christ. At the time, the auction had been created for the sale of fish, already with a minimum bid value, with negotiation taking place in search of the best prices offered by those who were interested.
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Speaking a little more history, about 1,500 years later, in 500 years before Christ, women were auctioned in ancient Babylon. Therefore, it is not today that auctions exist. On the contrary: they emerged just over 4,000 years ago, being shaped and arriving at the variety of auctions we know today.
In this content, far beyond history, we will bring the definition, characteristics and main types of auctions to help you better understand how they work. So if you want to know what is an auction, follow us to the end of the article to check out more details on the subject. Come on, read with us!
What is an auction?
But after all, what is the real definition? What is one auction? Well, in addition to what you already know and have already understood, this is an occasion in which there are negotiations of various products, usually niche ones (auction of cars, motorcycles, jewelry, cattle, real estate auction).
The product – car – (or more than one, if there is negotiation) is the highest bidder at the end of the auctioneer's narration. To be even more faithful to a clear definition, below we leave the formal definition of “auction”, found in Wikipedia. Read:
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“The auction or auction is a type of negotiation, very widespread in public bodies and private companies, as well as fishing auctions, in which the sale and purchase requested by the supply and demand for goods or services meet in a simple and quick way.”
So, an auction is a place where you go to “bid” a specific amount on a product that is being auctioned. These products may have different origins, from a collection of paintings by someone famous who died, to cars seized by the Federal Highway Police and being resold for a price that is often ridiculous.
Main features of an auction
We already know what is an auction, now, let's go to its 3 main features. See below and understand better how it works:
Minimum bid
Regardless of what is being auctioned, there is always a minimum bid. Let's use the example of the car that is always clearer to understand: if the house is full and the auctioneer is offering a car that FIPE is worth 24 thousand reais, he can start with a low minimum bid, for example, 12 thousand reais.
As there are many people, it is natural that the bids end up getting close to the real value of the vehicle. The opposite is also true: if there are few people bidding, the value will be a little closer to FIPE, in this example. But one thing is for sure: there will always be a minimum bid. It is a way of guaranteeing profit to those who are auctioning.
Low or high values
The characteristics of what an auction is come down to values. The more scarce the product and the more exceptional the occasion, the more expensive the values will be. Imagine an auction of works by Leonardo da Vinci: prices will always be sky high, as they are works of art of extreme value and usually displayed in museums, not auctioned.
On the other hand, when we talk about auctions of vehicles or real estate that were seized by the bank for non-payment, the opposite is true: real estate and auction vehicles will always be cheaper than in other places, since they were seized
Everyone can participate
Finally, as long as they are of legal age, anyone can participate in a
