9 Tips From the Pros for Conducting Self-Storage Auctions

Every self-storage owner dreads auction day, but lien sales are a fact of life in this industry. Here are nine tips to ensure yours go as smoothly as possible.

By Deb Hipp

Reprinted with permission from "The Storage Facilitator" blog.

Every self-storage operator dreads auction day. An auction takes time you’d rather spend renting units, and when it’s over, you’ll probably get yelled at by someone whose stuff got sold. “There is no facility that likes to conduct storage auctions,” said auctioneer Luther Davis, co-owner of Thomas & Associates Auctioneers in Sulphur Springs, Texas.

Still, as long as there is self-storage, there will be lien sales. Here are nine tips to make yours go as smoothly as possible.

1. Be Prepared

If you’ve done your prep work, auction day should be a simple process, Davis said. Make sure you’ve sent required notices and followed lien laws. Check for last-minute payments right up until the auction begins.

2. Have Enough Staff

The manager needs to be in charge of the auction, not working on something else, said Paul Maglio, president and owner of Storage Auction Solutions in Middleton, Mass. You don’t want to tell customers to call back because you’re “busy doing an auction,” he said. That just reminds them that you have the right to sell their stuff if they don’t pay.

3. Don’t Play Auctioneer

A professional auctioneer can bring in $1,000, compared with the $50 a self-storage operator doing his own auction might make, Maglio said. Do-it-yourself auctioneers also tend to make up rules as they go because they feel like they own the stuff in the unit. “They’ll say, ‘I want this much money or I’m not selling it,’” Maglio said. “Bidders see that, and they don’t like it.”

4. Display Rules

Post auction rules at your facility and hand out copies. Here are some important ones:

  • Length of time buyer has to empty and clean the unit (usually 24 to 48 hours)
  • Cleaning deposit or cleaning fee
  • Restrictions against using facility dumpsters
  • How units are sold: typically as a whole, not item by item
  • Protocol for viewing units
  • Types of payment accepted
  • Terms and conditions of sales
  • Rules for bidding
  • Return of personal items such as photographs and legal documents to the rental office

5. Attract New Tenants

Sell discounted locks on auction day. Offer bottled water. Give a half-month’s free rent to winning buyers who can’t clear out their unit in the required time. Bidders and dealers have to store their stuff, too, and 90 percent of them rent storage units, Maglio said. “I tell managers, ‘Treat them with respect, and they’ll send you business.’”

6. Control the Crowd

Have bidders sign in so you know who was visiting your property. Don’t let a bunch take over the lobby while you’re trying to run a business. “I tell them once they sign in, go to their vehicles and wait,” Maglio said.

Beware of getting too close to buyers who buddy up to you to unearth details about what’s inside the units. “When I see that, I just stop it right there,” he added.

7. Maintain Integrity of the Units

Don’t allow bidders inside units, which should be viewed from outside the open door. “If there are 20 people in there, we can’t see everything they do,” Davis said. “One of them may open up a jewelry box.”

Maglio recommends placing security tabs on units with locks that were cut before the auction. That way, it’s obvious that no one has pilfered the unit. Also, if tenants show up to pay at the last minute, they know that no one has rifled through their things.

8. Watch Out for Conspiracy

Several bidders can agree among themselves to not bid against one of them, who then buys the unit for next to nothing. Later, the group makes a killing when they split up the contents.

“We recognize what’s going on, and we stop it right away,” Maglio said. Other bidders will recognize it, too. “A lot of people will say, ‘I’m not going back to that guy. He’s not doing things right.’”

9. Remove Emotions

Auction is a “highly emotional day” for self-storage managers, Maglio said. You’re lucky if you break even on what your facility is owed. Tenants who didn’t respond to late-payment notices eventually will show up angry and frustrated. Today, though, your focus needs to stay on the sale.

Managers need to “deal with facts and not emotions,” Maglio said. “It’s their least favorable day, but it can also turn into a good day.”

Deb Hipp is a freelance writer in Kansas City, Mo. She writes for “The Storage Facilitator” blog, SpareFoot.com, SelfStorage.com and other websites, as well as her own “Tales from the Bark Side” blog. She enjoys working with animals and is involved in the Kansas City, Mo., animal-rescue community.

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