By Cheli Rosa
One certainty about self-storage lien sales is auction day can be stressful. As a facility operator, you have to find a way to balance the crowd of buyers with regular business customers. You need a good team in place to manage the increased traffic. You also need to make sure everyone on the property is safe and you aren’t opening yourself to liability. You have to do all of this while trying to host a successful sale through which all of your delinquent units are cleaned out and you collect as much debt as possible.
This might sound like an impossible feat, but after conducting hundreds of live auctions, I can tell you there are five simple but essential steps you can follow to implement a successful sale at your property. Follow them, and you’ll be better prepared and more relaxed come event day.
1. Check for Scheduling Conflicts
There’s nothing worse than scheduling an auction on the same day that five other facilities near you are also conducting sales. This means you have to compete for buyers; and if you only have a few units up for sale, it’s they’ll go to a different facility.
Luckily, self-storage operators and auctioneers are creatures of habit. They like to have their auctions at the same time every month. You can follow the websites of other auctioneers in the area to see when they typically hold lien sales. If you’re competing against facilities that conduct their own sales, call and ask when they hold theirs. Once you gather your data, select a date that doesn’t conflict with other events.
2. Advertise Your Sale
A lot of storage operators don’t like to advertise auctions because it’s a very negative part of the business. However, if you don’t tell people you’re having a sale, nobody will come!
For a long time, buyers found out about upcoming auctions by looking at the legal ads in the newspaper. While it’s true many still use these ads to find sales, there are many easier ways to discover where they’re being held. For example, there are several websites such as storageauctionunitlist.com, locateauctions.com and globalauctionguide.com on which you can advertise. Buyers use these websites to find sales in their area.
You can advertise without fear of looking like you’re celebrating the auction process. For operators willing to do anything to recover as much debt as possible, social media channels and websites like Craigslist are other viable options. If you conduct your own auctions, you can also keep an e-mail list of buyers so you can alert them when an event is forthcoming.
3. Prepare for Auction Day
Anything you can do before auction day should be done in advance. For example, don’t wait until the day of the event to make the final collection call to your tenant. If he’s going to pay you, you want him to come to the facility before the sale, not during. Also put out parking signs and print any buyer forms buyers the day before.
All staff should be trained on how to best handle the event. Is one person going to take care of regular customers while another conducts the auction? Does everyone know where the delinquent units are located? It might be a good idea to print a facility map and plot the order in which units will be sold.
Finally, be ready to answer bidder questions. They’re going to ask how many units you have left. They may also ask about unit sizes. Are you going to assign bidder numbers or have a more informal process? Make sure your entire team is up to speed with this type of information and ready to answer any inquiries.
4. Come to Work Early and Be Well-Staffed
It never fails … You’ll likely have to drive in the worst traffic you’ve ever seen on the day you really need to get to work and prepare for the sale. Don’t get caught in this situation. Plan ahead to ensure you’re at the office early. If you have staff who have a problem with punctuality, schedule them to work another time. If you don’t have the appropriate number of employees in place on auction day, you won’t have a successful sale.
On the morning of the sale, do a quick check of all auction units to confirm all locks and seal tags are in place. If a unit has been tampered with, it’s best to find out before buyers arrive.
Approximately one hour before sale time, have all hands on deck. Make sure breaks and lunches are scheduled around the auction. The more staff you have in place, the smoother everything will go.
5. Prepare for the Post-Sale
Let all bidders know how much time they have to clean out their units after the sale. This information should be included in any paperwork you have them sign, and it should be announced to the group.
Once the auction concludes, there may be a lot of people in your office waiting to pay, and they’ll be in a hurry. Don’t let them overwhelm you. Take your time. Make sure you count all the money you receive and make appropriate change. Know the answers to the following questions in advance:
- Do you have a receipt template on your computer, or are you going to handwrite receipts?
- How are you going to calculate sales tax?
- Are you going to collect a cleaning deposit, and what’s your policy on returning those deposits to buyers?
It's also important to have a backup plan in the event of a power failure. You’ll need a calculator and receipt book if you’re unable to use your computer. Make sure you have enough cash and small bills to make change when buyers pay.
Auction day doesn’t have to be stressful. I know it seems impossible to prepare for everything, but you can try. If you’ve never held an auction at your facility, attend one at a nearby competitor to get a feel for how it works.
Once you implement all of the above procedures and have a few sales under your belt, the process will run much more smoothly and become a routine part of your business. If you still have concerns about hosting an auction, consider hiring an auctioneer, who can take care of most of the nerve-wracking tasks for you.
Cheli Rosa is director of marketing for StorageStuff.Bid, which provides online storage-auction services. She’s a former high school teacher turned storage professional turned auctioneer. She’s worked in all areas of self-storage. Her constant desire for additional knowledge led her to immerse herself in the lien-foreclosure process. For more information, call 877.758.4243; visit www.storagestuff.bid.