Bidding on storage units is fun and exciting, but you might notice many canceled storage auctions as you get started. Canceled storage auctions are frustrating for buyers (it is the number one complaint we hear from bidders.) Many bidders think storage operators cancel units because the top bid did not go high enough, or maybe the manager decided to sell it to somebody else, under the table. They worry the sellers know who is bidding on their units, and they don’t want to sell the unit to certain people (the delinquent tenant).
Bidders, especially those new to storage auctions, don’t realize a lot happens behind the scenes before a unit goes to sale. There is paperwork, payment plans, legal ads, last-minute payments, and many other things that could result in canceled units. Last year, 47% of all units posted on StorageTreasures were canceled for many different reasons. Here are four of the most common reasons storage auctions get canceled.
The Tenant Pays Their Bill
Tenant payments absolutely, 100% happen — and often at the very last minute. An auction could be canceled minutes before it closes, or the sale could even be canceled before you arrive at the facility to claim a unit you won at auction and take possession. Legally, the property still belongs to the tenant until you pay for your bid and place a lock on the unit. This is why it is crucial to call the facility before you go to pick up your unit. To see more about taking possession of a storage unit, click here.
I have worked in the self storage industry for 12 years, and I have seen many, many tenants pay their bills at the last minute. In the case of live auctions, they even show up during the auction to try to pay their bill. I once saw a woman throw herself on the floor in front of her units to stop the auction in progress. Last-minute payments are widespread. They likely made up the majority of the 47% of canceled storage auctions on StorageTreasures last year.
An Error in the Lien Enforcement Process
The steps a storage operator must go through to sell a delinquent tenant’s unit are lengthy and complicated. The laws are vague and must be followed precisely. As you might have guessed, most storage facility managers do not come with a law degree, so mistakes are very easy to make. For example, many states require 15 days between the first legal ad and the date of sale. Easy enough, but do you count the day of the ad and the day of the sale? What happens if a holiday jumps in there and the newspaper is not posting legal ads that week? What happens if the newspaper spells the tenant’s name wrong? There are so many places for error in the process.
Operators do not want to have canceled storage auctions. Processing a tenant for auction is a cumbersome, expensive process. If they have an error in the paperwork, they have to start the entire process over from the beginning. There are fees for sending letters, legal ads and hiring an auction company. In addition to all of this, they still cannot re-rent the unit to a paying tenant. A paperwork error is a lose-lose situation for a storage operator.
Unauthorized Items in a Storage Unit
Often, a facility manager will open a unit door, take a quick inventory, and not realize that something they cannot sell might be in the unit. After they list the unit, they might see a headlight for a vehicle in the back of the unit. They will now need to perform a VIN search with the local motor vehicle department before listing the unit for vehicle sales. Other examples of items that cannot be sold are modified shotguns or assault rifles. The facility manager may have posted the units online without knowing these things are in the unit, and a supervisor later sees the prohibited items and cancels the auction.
The Auction Listing is Incorrect
In addition to following the lien process strictly, the storage operator has an obligation to you, as a buyer, to present correct information on the auction listing. The facility manager might post a unit and realize they put the wrong auction date or time. They can edit the auction up until the time the first bid is placed. After the first bid is placed, they can no longer edit the listing. They will have to cancel the unit and repost it. This is why you might see the unit pop back up on StorageTreasures a few days or weeks later.
Pictures can be wrong as well. To err is human. Managers might have hundreds of unit pictures on their computers and quickly select the wrong one when uploading units. Hopefully, they find the mistake and cancel the unit BEFORE you bid on it and win. They will likely need to cancel the unit and repost it with the correct pictures if they do.
Buyers successfully bought over 100,000 units last year and many of them for excellent prices, even after many units were canceled. Go to www.StorageTreasures.com NOW to find your next big win!