Bidding rounds and auctions: selling or buying a business at auction

When several buyers are interested in the same business, a fixed deadline creates momentum and fair competition. On Sitavo the seller can choose between two formats: an open bidding round, where buyers make offers as usual before a deadline, and an auction with binding bids, where bids are public and the highest bid wins at the hammer. Here is the difference, and how each works for sellers and buyers.

Open bidding round or auction?

As a seller: setting up a bidding round or auction

1. In Create listing step 3, or under Edit listing, choose the price type Auction — or Open to offers with a bidding round. Auctions are only available when selling the whole business, and neither can be combined with a fixed price or «Price not disclosed».
2. Choose the duration (from 3 to 30 days) and the time of day the round ends. The duration counts from the moment the listing is approved and active.
3. For an auction, set the starting bid (the lowest first bid, also shown as the price), the bid increment (how much each new bid must at least exceed the highest bid) and optionally a hidden reserve price. If you do not set an increment, Sitavo suggests one of about 2% of the starting bid.
4. You can also start a round on a listing that is already active, from the listing’s analytics page with Start bidding round. The deadline must be at least 24 hours and at most 30 days ahead.

As a buyer: bidding in an auction

1. Confirm your email address. Auction bids of DKK 500,000 or more also require that you have verified your identity.
2. Read the listing, the data room and the auction terms before you bid. The auction box shows the current bid, the next minimum bid, the number of bidders and the time left.
3. Choose the next minimum bid, one or two increments more, or your own amount, and confirm. The bid is binding and cannot be withdrawn.
4. Optionally set an auto-bid: a secret maximum up to which Sitavo bids the least necessary for you whenever you are outbid. If two maximums are equal, the one placed first wins.
5. Follow all your auctions under Auctions, with tabs for auctions you are bidding in, following, have created yourself, and that have ended.

The final minutes: nobody wins by seconds

If a bid arrives within the last 2 minutes, the end moves to 2 minutes after that bid. The auction therefore only ends once 2 minutes have passed without a new bid. The same applies in an open bidding round. If you are outbid, you get a notification with a button to bid again, and you get a reminder before the end.

Reserve price and the hammer

• The reserve price is hidden. The listing only shows whether it has been met.
• The hammer: when the auction ends, the highest bid automatically becomes a deal if it has met the reserve price, or if there is none. The buyer has thereby confirmed the agreement, and the seller must confirm it.
• Below the reserve price the seller is not obliged to sell, but can accept the highest bid while it is valid.
• Losing bidders are notified but do not see the final price. After the sale, only the seller and the buyer can see the price.

If the winner does not complete

If the deal falls through after the hammer — for example because one party does not complete — it moves automatically to the next-highest bid that is still valid and has met the reserve price. That bidder is bound by their bid in the same way. If a buyer backs out of a binding bid, or a seller does not confirm the agreement after accepting a bid, Sitavo may close the account, and the other party can claim damages. The rules are in the terms of trade on auctions.

After the auction

The deal continues in the normal deal process: agreement, payment directly from buyer to seller, handover and completed deal. If the seller has chosen Sitavo’s agreements or their own documents, they are accepted at the agreement step.