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Business

Online auctions prove their value during pandemic

WABASH, Ind. — In times of social distancing and limited storefront hours, one method of selling, from farm equipment to real estate, has proven its worth.

Online auctions have been increasing in popularity in the U.S. agriculture and farm real estate sector. In pandemic times, with limits on sizes of groups and other concerns, the ability to buy and sell from the comfort of your home or tractor cab is adding value for buyers and sellers.

“One of the benefits for buyers is they can sit at home and bid on a piece of property,” said Pat Karst, vice president with Halderman Farm Management and Real Estate Services.

The business is celebrating its 90th anniversary this year. Howard Halderman, the company’s current president, is the third generation of the family in the business.

Online auctions aren’t a new way of doing business for Halderman, which specializes in farm management, real estate sales and acquisitions and farm appraisals. For a company that has experience in online sales, switching more sales to online wasn’t a stretch.

“We felt fairly comfortable switching everything to online auctions just because we’ve done so many. We really didn’t see much of a problem there,” Karst said.

For Martin Auction Services in Clinton, Illinois, online auctions have proven their worth.

“The conversion to online only was not a big jump for us because we’ve already been doing it, but it’s definitely been an advantage for people who are able to use that function, with the way times are,” said Rob Nord, auction manager and co-owner, with his wife Lucy, of Martin Auction Services.

The auction business, founded by Lucy’s grandfather, focuses on sales of machinery, equipment and heavy trucks.

Online auctions of real estate can add value for sellers by attracting bidders who might not be able to make the trip to a live auction.

“We’ve had great luck selling recreational property when the buyers are not neighborhood farmers. They might be coming from 20, 25 miles and they want to buy a piece of property that they are going to hunt on. They appreciate not having to take off work a couple hours early and drive a half hour or 45 minutes to a sale, sit there for an hour and then drive home. I think it’s convenient for buyers,” Karst said.

Some live auction customers switched to online to attract an audience confined to home, Nord said.

“We’ve had sellers who got on board because they understood there was a hole there, they understood people were at home and they want to do something. One thing they can do is bid and buy what they need and still maintain the social distancing,” Nord said.

The method works as well for farm equipment as it does for farmland.

“We sold a whole line of equipment last fall in Ohio, and that equipment went all over the country. We had people bidding from the eastern foothills of the Rockies. The online bidding for equipment is kind of crazy, but it is really catching on and going great guns,” Karst said.

As with the convenience factor for online farmland sales, the same holds true for online equipment sales.

“If you want to buy that 660 John Deere combine and there’s a half-day auction, you can go and wait or you can bid online from your office,” Karst said.

For prospective buyers who may not feel comfortable with online bidding, auction services offer staff assistance in placing bids.

“I think some of the older buyers may not be as comfortable as the younger buyers. We had a sale and I was on the phone with one of the buyers, bidding for him, because he didn’t feel comfortable,” Karst said.

One of the biggest challenges is to get buyers familiar and comfortable with the online auction platform.

“That’s the biggest curve is teaching people how to get on and what to do. A lot of your bidders are not familiar with it, so we’re doing a lot of educating in being able to use the different platforms. That’s the biggest hurdle is to learn the system before they jump in and start clicking,” Nord said.

Nord said one of the first lessons is that there are failsafes to prevent buyers from accidentally bidding on an item.

“You can still have buyer’s remorse, oh, gosh, I wish I hadn’t spent that much, but you can’t accidentally bid on something. There are a lot of failsafes in there before you click that bid button,” Nord said.

While one benefit of live auctions, particularly with farm equipment, is being able to see the equipment up close, buyers still have the opportunity to do that within the format of online auctions.

“We still have inspection dates. If someone wants to come and see the equipment, they are free to come and see it,” Karst said.

For Nord, having a 20-acre sales lot goes a long way toward complying with crowd size limits and social distancing.

“We just schedule people to come in, so it’s pretty simple to keep the social distancing in place and still conduct an auction with 500 or 700 lots. Our lot is 20 acres, and you might get two or three people in an area. It’s a pretty good solution to maintain some normalcy with adaptations for pick ups and inspections,” Nord said.

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