What Happens When the Reserve Price Is Not Met in an Auction
When participating in an auction on Municibid, understanding how reserve prices work and post-auction processes can help you make informed decisions. Below, we clarify key aspects of what happens if the reserve price is not met in an auction.
Understanding Reserve Prices
A reserve price is the minimum price a seller is willing to accept for an item. This amount is confidential and is not visible to bidders. It is not indicated on the auction listing, adding a layer of confidentiality to the process.
Rules for Bids Below the Reserve Price
If your bid for an item is below the reserve price, the item does not automatically sell. However, sellers have the discretion to make offers or take other actions post-auction.
Sellers may accept the highest bid at their discretion or continue to hold the item. If the selling agency decides to offer the item to you despite the bid being below the reserve price, Municibid will send you an offer.
Post-Auction Scenarios: Offers and Discretion
Proxy Bidding Mechanics
How Does Proxy Bidding Work for Reserve Prices? If you want to increase your bid to try and meet the reserve price:
Place a new bid that represents the maximum amount you’re willing to spend.
The system will only increase your bid to the point necessary to meet or exceed the reserve price or outbid competitors, whichever comes first.
For Sellers:
If the reserve price is not met, but you are willing to accept the highest bid, all you need to do is notify Municibid. We will send an offer to your highest bidder! The highest bidder will have 2 business days to respond to the offer. If the bidder accepts the offer, we will update the listing to declare them the winning bidder! Alternatively, you may choose to relist the item for a new auction if you’re not satisfied with the highest bid.
For Bidders:
If you are the highest bidder on an item where the reserve price isn’t met, you are not obligated to accept the seller’s offer. You may decline the offer if it does not align with your preferences or circumstances. This decision will not penalize you on the platform. Staying attentive post-auction is essential, as sellers may contact you with second-chance offers or relist items that were not sold.
Best Practices for Bidders
To optimize your auction experience when dealing with reserve prices:
Bid Strategically: Place a bid that reflects the maximum amount you are willing to pay. This increases the likelihood of meeting the reserve or receiving an offer.
Evaluate Offers: If you receive an offer post-auction, assess whether the terms work for you before accepting or declining.
Act Promptly: Respond to post-auction offers within the specified timeframe (typically two days). By following these guidelines, you can navigate reserve prices effectively and make well-informed decisions during and after auctions.
Monitor Auction Status: Keep track of whether the reserve price has been met to adjust your bidding strategy accordingly.
Be Proactive: Set higher maximum bids if you are comfortable paying more to increase your chances of meeting the reserve price.