What is a Soft Close or Dynamic Ending of an Online Auction?
So you placed your bid on an item during the last minute of an online auction, thinking you snatched it before anyone else had the chance to outbid you. But then the time on the item extends, and you’re left wondering, “What happened?” No, it wasn’t a glitch you experienced—it’s called a soft close (or dynamic ending) to an online auction lot, and this feature is commonly used in online auctions.
What is a soft close (or dynamic ending)?
If someone places a bid in the last few minutes of an online auction, the end time for the specific lot is extended. The process continues until there are no more bids made within the last minutes or seconds. At that point, that specific lot closes. The overall auction continues until each lot has no advance. Oftentimes, auction companies will stagger the end times on each of the auction’s items so all lots do not close at the same time.
For example: Lot 1 has a closing time of 1:00 p.m. At 12:30 p.m. Bidder A places a bid. The auctioneer has set the bidding to extend if any bids are made within the last two minutes. At 12:59 p.m. Bidder B outbids Bidder A. The countdown clock resets and now Lot 1 will close at 1:01 p.m. Bidder A and any other bidder have the opportunity to bid. If no bid is made within that last two minutes, the auction for Lot 1 closes and Bidder B wins the lots. If a bid is made, the one minute clock starts over again.
Why do auctioneers use the soft close?
Auction professionals will use a soft close and/or staggering lot ending times to mimic the back and forth of a live auction. More importantly, this technology allows for every bidder an opportunity to advance their bid. This more faithfully captures the true competitive nature of an auction and eliminates sniping or other online strategies or technologies.
Is it fair?
The use of extending bidding allows every registered bidder the opportunity to bid and advance their bid. These systems also allow for bidders with slower or unstable internet connections to be on a more equal playing field.
For real estate and high-value assets, the auctioneer may decrease the bidding extension as the auction progresses and nears the final prices as the number of bidders decreases. This is one of the reasons it is important to read the auction terms and conditions and pay attention to announcements made in the bidding program.
If you have questions about how a specific auction works, contact our auction staff at (512)261-3838 or email Info@JonesSwenson.com. We will be happy to answer questions.
(Taken from the National Auctioneer’s Association – Auctions Work Series)