To view a video regarding ASF's VEHEMENT stand AGAINST shill bidding and measures implemented to protect its bidders against this VILE practice, click on the play button above:

WHAT IS YOUR STAND ON SHILL BIDDING?

WHAT HAVE YOU DONE TO ENSURE IT DOESN'T HAPPEN AT YOUR AUCTIONS?
 

Shill bidding is defined as the utilization of a "plant," or a non-good-faith bidder (commonly referred to as a "shill," a "capper," or a "booster,") whose sole purpose is to artificially inflate the bid and who has no intention of buying the property.  Only two parties have a vested interest in shill bidding:  the seller and/or auctioneer.

Auction Sells Fast views shill bidding as despicable, dishonest, unethical and fraudulent, and a source of justifiable scorn on the part of the bidding public toward the auction industry.

To illustrate how tempting shill bidding can be for an auctioneer, suppose a real estate property being auctioned has a reserve (the minimum the seller will accept) of $500,000, and the bidding is at $460,000 with a 10% buyer's premium and the legitimate bidding has completely stalled.  Factoring in the 10% buyer's premium, the contract price is $506,000 ($460,000 x 1.10), which IS ENOUGH to meet the reserve of the seller.  The only problem for the auctioneer is that would mean having to collapse his/her commission from $46,000 down to $6,000.

Suppose, however, that a shill bid is utilized to get the bid from $460,000 to $480,000, with the hope of getting the legitimate bidder "back in" at $500,000.  If the ploy works, the contract price becomes $550,000 ($500,000 x 1.10), which means the auctioneer's commission SKYROCKETS from $6,000 to $50,000!!!  That's EXACTLY what may motivate an auctioneer to engage in this practice.  When an auctioneer gets within striking range of the reserve (i.e. within the buyer's premium range), he/she has reached "pay dirt territory," meaning that everything obtained from that point forward until the reserve is met is essentially coming to him/her!!!  What's the downside?  Unfortunately, in Louisiana, not much.  Shill bidding is presently punishable only to the tune of a misdemeanor conviction (which most DAs won't likely pursue due to the time and energy required to get a shill conviction) and a $500 fine!! 

In Louisiana, shill bidding came to the forefront of public scrutiny in 2010 after a high-profile real estate auction transpiring in November of 2009 in Thibodaux, Louisiana.  CLICK HERE for LA's laws on shill bidding and an attempt to strengthen those laws during the 2010 Louisiana Legislative Regular Session as a result of that auction.  

We at ASF will NEVER, and we do mean NEVER be tolerant of shill bidding.  We will STEADFASTLY REFUSE to accept a listing by any prospective seller who suggests shills be deployed.  Obviously, we make our promise to you that we will NEVER knowingly allow a shill bid to transpire at one of our auctions.  NEVER!!

Beyond that, however, we have taken another important step to help ensure the bidding public is not subjected to this despicable practice:

We've modified BOTH our listing agreement and our purchase agreement to SPECIFICALLY ADDRESS the issue of shill bidding. 

In our listing agreement sellers attest, in writing, that shill bidding is prohibited.  The agreement also contains language that states the following:

1.  If a cause of action (i.e. lawsuit) arises alleging shill bidding has been utilized to artificially inflate the bid and a court deems that in fact shill bidding was used for that purpose, then:

2.  The responsibility for payment of the FULL buyer's premium shifts away from the purchaser and to the party the court deems to have engaged in shill bidding.

Our purchase agreement contains the same language, and we call this our "No Shill Guarantee"  <SM>. We are proud to implement it as a means to help assure bidders at our auctions that, under NO circumstances, will we be tolerant of shill bidding!!

<SM> The phrases "No Shill Guarantee," "No Booster Guarantee," and "No Capper Guarantee" are all service marks registered to Auction Sells Fast by the Louisiana Secretary of State's Office.

Ask the auctioneer at the next auction you attend, "Are you tolerant of shill bidding?"  Then follow that question up with "What have you specifically done to help ensure it doesn't transpire?"  In doing so, we ask that you play a role in helping  eradicate an INSIDIOUS CANCER that we believe threatens to destroy the auction industry in Louisiana!!