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10 FAQs on Self-Storage Online Auctions

By Cheli Rosa Comments
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While online auctions have been available in the self-storage industry for several years, there are still operators who aren’t using this method to conduct lien sales. Some are resistant to change, some think they prefer live events, and some are worried about the legality of the online platform. However, many are curious about how it all works and what they need to know to proceed. Here are 10 of the most frequently asked questions regarding online auctions.

1. How do online auctions work?

Online auctions are very different from live sale events. Simply put, the following will happen:

  • You’ll create an account on an online-auction website. There are several options available today.
  • When you have a unit ready for lien sale, you’ll cut the lock and take several pictures of the interior from different angles to provide buyers with a good idea of the contents and unit size.
  • You’ll upload the pictures to the auction website and fill out the listing description.
  • Buyers will bid on the unit contents.
  • The bidding will end on the date and time on your notice-of-sale letter.
  • You’ll receive an e-mail letting you know who won and the amount of the final bid.
  • The buyer will receive an e-mail letting him know he won the unit and to contact you to pay and arrange for pickup of the property.
  • The buyer will visit your facility, pay you and take the items.

2. Do I still have to send late letters and run an ad to announce the sale?

The first and most important thing to understand is all your legal obligations are the same, regardless of how you intend to auction the unit. Even if your state’s lien laws have been amended to include online auctions as a method of sale, all other requirements remain the same. Notice-of-sale letters must go out promptly. Legal advertisements still need to run and include all the requirements stipulated in the lien laws. You’re bound by all contractual obligations outlined in your rental agreement.

3. Do I need to go inside the unit to take pictures?

No. You should take pictures from the threshold without going into the unit or moving any items. The pictures should be from the same view auction buyers would get if they were looking at the unit in person.

4. How long does the buyer have to clean out the unit?

Ask your online-auction provider, as these websites each have different policies. The timeframe is usually 24 to 72 hours. Ideally, your provider will allow you to set your own policies and decide how long you want to give buyers to claim their goods.

5. Do I have to collect sales tax?

That depends on where your facility is located. Most often, the answer will be yes. Several states don’t require personal-property auctions to be taxed. If you’re unsure if you should charge sales tax, contact your city or state department of revenue.

6. Can I still collect a cleaning deposit?

Yes and, hopefully, your online-auction provider will have a way for you to alert buyers that there is one and how much it will be. Any provider you choose shouldn’t hinder or change your operation procedures.

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