Often times an auction sale is conducted on behalf of a secured creditor where the property is being sold to settle a debt. More often than not the previous owner is not too happy about the situation, but at some point during the process reality will set in and they’ll cooperate with the auctioneer. As the auctioneer, we try to guide these situations to a peaceful, amicable and successful conclusion.
On occasion an owner that faces the loss of property due to a foreclosure will hang on, even disrupt the process in what they feel might be valiant attempts to “save their property.” Valid secured creditor sales that are disrupted by jilted or vindictive borrowers have a negative impact on the value an auctioneer realizes at the sale. By creating even a small amount of disruption, potential purchasers will likely pay less out of fear the disruption will continue when they own the property. Outright property damage or vandalism has an obvious effect on value. Ironically, in the end it’s the borrower who gets hurt as a lower price at the auction could force a larger deficiency claim against them after the auction settles.
Auction day is understandably a hard day for the person who is losing their property; and in most cases an owner losing their property won’t show up on sale day. However when they do show up their presence warrants caution. Hopefully their reason for attending is curiosity and not to disrupt the process. Sometimes, an owner not only shows up but does so with an agenda to make the day more difficult for both the auctioneer and the attendees. In these cases, it is advisable to have police presence at the auction.
Police presence sends a strong message to the (soon to be) previous owner that no nonsense will be tolerated. Police presence can also ease the nerves of the auctioneer and the attendees who may have been worried about continued meddling by a prior owner after the auction. While it is incumbent upon the auctioneer to balance the best interest of the secured creditor with empathy for the borrower, a squad car in the lot or uniform in the crowd can often provide a bridge to this balance.