The ABC's of Storage Auction Dirty Deeds (Part 2 of 2)

gargamel of The SmurfsNow that you've had a chance to take a shower, lets just jump right back in the mud and see what other once-in-a-blue-moon scams have lurked in only the most despondent of storage auctions.

D. Planted Bidders

Yeah, this stuff gets seedier and seedier (pun fully intended).  In states where surplus funds from winning bids do not go back to the tenant, it can be the auctioneers or facility owners (a.k.a. "FO's") who benefit by conspiring with accomplices who hang out and artificially raise bidding amounts.  Again, we’re not saying this happens on a regular basis, but one has to be careful.  This is called “Shill Bidding,” or "collusion," more generally.

For example, look out for a bystander bidding once, only once, and bidding a seemingly disproportionate amount.  Even if it known publically that they are not the original tenant of the unit, they could be in cahoots with an FO.   However, try to know the difference between an authentic, aggressive bidder and a “plant.”  If someone bids multiple times, in small incremental raises, and starts out modestly, then most probably they are a real person trying to either win the unit or “drop a locker” on the competition (i.e. make them spend their money so they have a shot later at locker that they actually want).


E. Sketchy Auctioneer Behavior?

This is probably the least likely scenario, but I have heard stories of it happening.  Auctioneers are sometimes paid on a commission of the total selling price of a locker, but again, only in states where overages are not paid back to the tenant, but to "the house."

It would be good to find out, discreetly, how an auctioneer is to be paid at the auction you are attending.  Are they on a private salary, or paid hourly?  Is it a flat rate for every unit?  Each of those scenarios are virtual guarantees that an auctioneer has no stake in artificially driving up prices.  Yet, if the auctioneer is paid a percentage of the Facility Owner’s gross sales, then be leery of:

  1. Planted bidders
  2. Auctioneers setting high starting bids, which they are legally entitled to do in some cases.
  3. Any evidence of a staged unit (see “B,” “The K-Mart Locker…” in part 1 of 2).

Here’s a link to a lot of various methods that auctioneers make their living.  Become a quick expert.  If you have an I-Phone, then bookmark this page for your next auction.  I would recommend asking the facility owner this question, not the auctioneer themselves.  Tread lightly.


F. There is no Auction Police, So Police Yourself

cartoon villainWhile there are “wrongful sale” legal measures that a tenant can take against a facility owner before and after an auction for any number of reasons (inadequate notification/methods, premature auction dates, etc.) the chances of a buyer winning a case decrying foul play and staging are minimal.  The following linked story is a perfect example of even just a quasi-rip off situation that cost the buyer a lot of money.  I would recommend reading it, as it may inspire some shrewdness on your part.

As a commenter mentioned later in the story, a lawsuit against someone like Cubesmart or U-Haul, even if it is thorough and legitimate, could get pushed onto the backburner for a good while, while they harness their massive corporate leverage against your claim.  I will be following up with the poor poster, “Rocking-The-Retro,” a devout auction goer, to see how she faired by the end of this.  But the smartest thing, always, is to bid conservatively unless “all systems are go,” so to speak.

Read on to hear sweet strains of an ideal bidding environment and situations that should eradicate any potential corruption in its tracks.


G. Safe Sailing

So, now that you know what can potentially be fudgy about a storage auction, let’s do a recap and figure out the best case scenario for you in terms of bidding on an authentic locker that can actually be well worth your investment.


Best Case Scenario

There is a small entrance fee to get into the auction, driving away hoards of “lookey loos” as they are poignantly termed in this business.  The more serious, competitive, and elite the bidding pool is, the less chance for corruption.  Why?  Because facility owners are not going to mess with people who know this trade inside and out.  Our website provides exclusive auction data not found anywhere else, and a ton of it, making it much easier to track down respectable auctions.  This premise is number one in ensuring nothing is planted, staged, or pre-rehearsed.  As a bonus, the auctioneer would be paid via this entrance fee method, ensuring that the final sale of a unit does not affect his paycheck.

If you are at a free, public lien auction, however, which most of the time you will be (and we provide data for thousands of those, as well), then you might have a little snooping to do, just for the heck of it.  Chat with the facility owner a little bit and get a feel for who they are.  I mean, if they are in the midst of some kind of staged crime, you will probably notice some fidgetiness in their movement and speech, right?  Do they seem as relaxed as they should be on a day where they are getting back at delinquent renters, and potentially making some surplus cash on top of it?  Happy and calm, not fidgety and standoffish.

The Two Lock System

In some states, like Louisiana, you will see a unit shut away by two locks, one belonging to the facility owner and one to the auctioneer.  One cannot open the door without the other, further minimizing any chance of collusion.  In this case, however, you may need to spend a little time talking to seasoned, local bidders to find out if the duo know each other or not, and most importantly, how the auctioneer is getting paid.  If his lock is on there and he is making a flat rate, then you have nothing to worry about because that lock was placed their right after the expiration of the tenant’s grace period, crushing any possibility of FO fiddling during the weeks in between.  The “double lock” model is mostly a facet of large corporation auctions, like U-Haul and Cubesmart, who are trying to avoid any undue backlash from opportunistic buyers at all costs.  And bless them for it, because it a checks and balances system that works!

wile e coyoteAdd a little research with “the folks” around you to discern if the facility has a strong track record of honesty with their customers and a squeaky clean auction conducting history.  It should not be that hard to find out since people love to “spin yarns” about their success stories!


...Z: The Truth of the Matter

If you were a successful storage facility manager, with a good heart and a strong business ethic, then the prospect of fraud, misrepresentation, and collusion would just seem like a joke.  You would be making ample income off of running a smooth business that is customer friendly to both steady and defaulting tenants, and therefore to bidders/buyers as well.

This is the calm reality of the auction going world, ninety percent of the time.  The purpose of this ABC list is to inform more so than warn, to generally wake you up to a necessity of always being aware of your environment at all times.  Naivete is something you will quickly get over as you embark or continue on your resale career, and it is always for the better.


Happy bidding, and remember your ABC's.


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