Instructions on Holding a Sale by Internet Auction of Personal Property No Longer Needed For Public Use

Things to know about selling through an online auction:

1.      The local unit must first submit a plan to the Division indicating how they intend to conduct the sale of the personal property.

2.      Once approval is received from the Division, the governing body must pass a resolution authorizing the sale of the personal property no longer needed for public use.  The resolution must indicate that the sale will take place over the Internet, the Internet address where the auction can be found, the date(s), time for the auction and a description of the personal property to be sold that the Division has approved the sale.

3.      The local unit must place a notice in the newspaper announcing the auction, the web address where the auction will take place, the date(s), time for the auction and a description of the personal property to be sold.

4.      The local unit must decide if there is a minimum selling price or decide that there is no minimum selling price, and that the local unit will accept any bid.

5.      The local unit must clearly and accurately describe the item(s) to be sold, that the item is being sold “as is”, and that the buyer will be responsible for shipping costs.

6.      The local unit may have to pay the auction house for its listing.  The fee is usually based upon the selling price of the item being sold.  The local unit must keep in mind that even if the item does not sell, the local unit may have to pay the auction house a fee for the listing.

7.      The type of auction most likely to be used by local units are those where purchases are made from individuals or corporations, not the auction house itself (i.e., eBay.com, amazon.com, yahoo.com).

At these sites, the auction house is merely a broker bringing sellers and buyers together.  They may provide other services such as insurance but they leave it up to the parties to complete the deal.  For example, the local unit puts a listing on eBay to sell XX.  Buyers participate in the auction.  The highest bidder wins the auction.  EBay would then give the winning bidder contact information for the local unit and the local unit contact information for the winning bidder.  The winning bidder and local unit would get together and work out the details of payment, shipping etc.  The auction house does not get involved in the transaction.  The auction house receives a fixed percentage of the sale price that is paid by the seller.

8.      If the auction site charges any fee (i.e., a listing fee) the local unit must decide to pay the fee either through proceeds of the sale, a budget appropriation or procurement card.