Storage auctions are nothing but different units that self storage companies schedule for bidding as a result of lien. A lien allows the storage company to keep someone else’s property until the person pays the debt owing the company. Just so you know, the lien process is governed by the state laws. That means the government makes sure that the rules are followed by everyone.
Simply put, self storage companies hold auctions to clear the personal property or belongings of their customers who failed to pay their rent on time. Speaking of auction attendees, you should know that anyone can attend these storage auctions and participate in the bidding process. Want to know about this entire process? Keep reading to know about how storage auctions work.
When Do Storage Units Go Up For An Auction?
There are times when a customer is not able to pay the debt to the self storage company on time. The customer gets around 30-90 days to clear the debt as most storage companies follow. Even after this time period, if the customer is not able to pay the debt, then the company resorts to its ow option which is putting up a unit for auction.
Now these auctions can be really time consuming and may require the storage company employees to devote a lot of time in scheduling a unit for auction. That means they sometimes even have to compromise on their working hours to make it happen. So every storage company asks its customers to pay their rents on time to avoid this from happening, as it’s not just difficult for the customer, but also the company.
Where To Find Out About An Auction?
Every storage company advertises their auctions. You can check the section with legal notices in the newspapers. Apart from that, these auctions are also advertised online. All you have to do is visit the websites of the storage companies in your area and check if there are any updates about auctions on their homepage. Otherwise it’s best to visit the websites of storage unit auctions like for example StorageAuctions.com, Storage Treasures, etc.
How To Register For An Auction?
It’s always best if you register for the auction prior to the day of the auction. Just get in touch with an agent or employee of the storage company in your area and enquire about their pre-registration process. Many storage companies have their registration online. Otherwise, you can also register yourself on the day of the auction if the company allows it.
Just in case you have any doubts or need clarifications about the registration process, you can contact the facility manager of the storage company. That’s why you need to check the newspaper or websites to know about the upcoming auctions in order to pre-register for it at the company’s facility or online.
Here’s what you’ll need for registering for the auction:
- You have to be 18 years or above
- Proof of Identification (Driving license/Birth certificate/Passport, etc)
Also Read: Top 24-Hour Storage Companies
Revealing The Storage Unit
Now the storage unit company will allow the auction attendees to see the unit on the day of the auction. Before the bidding starts, the company agent will let the people see the unit in order to help them decide the amount they’re willing to pay. Do keep in mind that the contents in the unit determine its value. For example, a unit with many equipment and tools will get a relatively higher bidding price compared to one with basic or cheap household items. As a matter of fact, the company doesn’t allow you to touch any of the items. All the auctioneers present only get to see the items before the bidding begins. Only when the company agent closes the unit, the bidding for the unit begins.
Apart from in-person auctions, there are storage companies that schedule the auctions online. That’s why it’s important to check the websites of storage companies to get regular updates on their auctions. For an online auction, most storage companies will upload a picture of the unit along with a brief description of the items.
Read Also: The Average Cost of Renting a Storage Unit
What Happens During The Bidding?
As mentioned earlier, once all the auctioneers have seen the storage unit, the bidding process starts. There is an auctioneer appointed to carry out the bidding process in-person. The bidding starts at a low price until people start competing for a unit when the price of the unit crosses $1,000. There are times when the unit gets absolutely no bidding at all. All of this depends on the kind of items the unit has. Having said that, storage auctions can be a great place for you to find household items for your new home like paintings, books, furniture, garage tools, etc.
Here are a few important things you need to know about bidding:
1. Variations In Bidding
The storage auctioneer will start the bidding process at a low price or sometimes may intentionally spur up the price to make people compete for the unit. That is the reason the winning bids can vary, some units get sold for $100 while others can go up to $1,000, especially if the items in the storage unit are of great value. If at all you are able to guess the actual retail price of the items, you are more likely to win the bid for that storage unit.
2. Winning Bidder Has To Pay Immediately
If at all you’ve won the bid for a storage unit, you will have to pay for it then and there. The storage companies make sure that all the winning bidders pay off their balance on the auction day itself. Once you’ve paid for your item, you will get it only if there are no other auctions happening around it.
Rules Associated With Storage Auctions
Not all storage companies mention their guidelines and rules prior or on the day of auction. Many storage companies take it for granted that anyone who attends the auction knows about the rules and regulations. That’s why you need to know about all the rules associated with storage auctions. Here’s a quick rundown of all the rules associated with storage auctions:
1. Bidding Rules
Whenever a unit is put up for auction, there is no room for any sealed bids before the auction begins. When it comes to bidding for storage units, you cannot bid for any one particular item from the unit. If you want to bid, you will have to bid for the entire unit. The auctioneer will start the bidding process and the person with the highest bidding will win the unit. Do keep in mind that certain storage companies may ask the winning bidder to pay a deposit before the unit is cleaned and register under the bidder’s name. It usually takes around 24 to 48 hours for the registration of the unit under the winning bidder’s name.
Speaking of any important personal documents like identification proofs, tax records, bills and receipts, legal documents and photos, these have to be returned to the storage company. The winning bidder is expected to return these items so that they can be returned to the previous customer. With respect to any firearms in the unit, it has to be given to the local law enforcement.
2. Auction Scheduling Rules
If you want to put up your unit for an auction, the first thing you need to do is go through all the rules of your state’s storage statute. Make sure that you arrange for a licensed auctioneer to carry out the bidding process. In order to advertise your auction, you can use platforms such as newspapers or your company website, provided you abide by the terms in your state’s storage statute.
3. Customer Claim Rules
There is a possibility that the unit’s previous customer or tenant may end up making false claims for the unit that’s up for auction. That’s why storage companies are required to have a written set of rules along with the reason for the sale. Having said that, the state’s storage statute does give the previous customer or tenant the right to proclaim the unit until the bidding for that particular unit is over.
Here are the following things storage auction companies should keep in mind while drafting the auction rules:
- Reason for the auction or sale.
- Rules for inspection of the unit or property by the buyers or auction attendees.
- Transparency about the property owner (whether it belongs to the company or is a lien).
- Releases of liability and indemnity clause (to avoid any injury or damage caused by any bidder).
- Rules for registration and participation (deposit/credit card number, etc).
- Mode of payment
- Previous customer or tenant’s right to claim the property (until the bidding is final).
- Emphasis on who can bid for the property (also considering the previous customer’s relatives/employee/manager).
- Process of determining the winning bidder.
- Rule for returning personal documents or belongings (legal documents, licenses, etc).
Tips And Strategies For Bidders
- Most storage companies require you to pay cash when you win the bidding at an auction. That’s why you need to carry enough cash not just for the sale but also the state’s sales tax. Do keep in mind that certain storage companies may ask for a deposit until the unit is cleared or registered under your name.
- If you’re keen on purchasing a unit, make sure that you’re prepared with your own truck. Most storage companies will require you to haul the contents in the unit immediately after winning the bid.
- You need to be really patient, and at the same time, very observant during storage auctions. First of all, these auctions go on for a long period of time, which is the reason you need to be calm and composed to smartly make your biddings.
- Not always will you earn profit at storage auctions. You need to be prepared for anything. There may be times when you will be lucky enough to get a unit with valuable items and sometimes you may even lose your money. That’s why you should always be prepared for the best and the worst.
- Make sure that you examine the contents of the property or unit carefully. You definitely don’t want to miss out on any important valuables that might make your day. Also remember to carry gloves and a mask for an auction as the items may not really be clean or in a good condition.
Frequently Asked Questions
How do storage units get auctioned?
When a customer or tenant is not able to pay the rent to the storage company, the company puts that unit for auction. The unit gets sold to the person who has the highest bidding in order to pay back the rent of the previous customer or tenant. After the unit is sold, the company can re-rent the storage space to other customers.
How do online storage auctions work?
Many storage companies put up their auctions online. They post pictures of the storage unit on their website along with a description of the items. Some of the best online storage auction websites are StorageAuctions.com, StorageTreasures.com and LockerFox. You can check their websites for further details.
What are the requirements for storage auction buyers?
If you want to buy a storage unit, you need to be 18 years or above and carry a proof of identification like your license, birth certificate or passport.
Who gets the money from a storage unit auction?
The person with the highest bidding wins the auction and has to pay the storage company. Most storage companies require cash payments. The winning bidder is given around 24 to 48 hours to clean the unit and then haul the items from that particular storage unit after registering it under his/her name.
It’s important that you go well prepared for a storage auction, especially when it comes to all the rules and regulations associated with it. You may either be lucky enough to purchase a property or may end up losing your money. That’s why it’s good if you attend a few storage auctions to get to know the bidding process. Once you are thorough with the entire process, you are ready to go bid for an auction.
Bonus: You can use our Storage Unit Size Calculator to calculate the size of Storage.