Standing a lean 6-foot-4, even taller in his boots and cowboy hat, auctioneer Rich “Slim” Scott gathers a dozen individuals and pairs of would-be buyers to share the rules auction.
“Don’t go in the storage locker. Don’t reach in. Don’t touch anything,” said Scott.
Buyers must bid for an entire unit, as is. Cash in hand. Potential buyers must sign in ahead of time and agree to the rules.
“If you break something on the way out, you’ve doubled your investment, but it’s still yours,” he added with the hint of a smile.
For sale this particular morning: the unknown contents of seven units at Go Green Self Storage, an independently owned facility in Dacono, CO.
Let the Bidding Begin
Excitement builds as the electric driveway gate opens. Within 3 minutes, bidding on the first unit tops out at $125 for a large truckload of well-worn things. There’s a dollhouse, a drum set, a few mattresses, a coffee maker and an artificial Christmas tree, each item part of a family’s untold history.
The other units go just as quickly and an hour later, every buyer is settling up.
As anyone who attends storage auctions (or watches them on TV) knows, they’re over in a flash. What many people don’t realize is that months of planning and preparation precede them.
“An auction isn’t something people just throw together. There is a lot liability attached to it,” said Rich Schur, who runs Montrose, CO-based Schur Success Auction & Appraisal with his wife Shannon. “We put in about four hours ahead of time for each new client.”
Behind the Scenes
The Schurs, both professional auctioneers, have grown the company Shannon’s father started more than three decades ago. They employ half a dozen auctioneers, including Slim, and a small office of support staff.
After they meet a potential client and sign a contract, the Schurs walk clients through the legal requirements and ethical expectations of going to auction. The rest of their time is spent immersed in scheduling and marketing upcoming auctions – on their website and through fliers – and sorting and submitting sales taxes from prior auctions.
Schur Success sold about 3,500 private storage units in 2014, mostly in the Denver area. That’s roughly 85 units among 15 locations each week.
The auction process begins with someone’s unpaid rent.
On average, 10 of Go Green’s 500 renters are late each month, according to Angelina DeJacamo, who manages the rural facility north of Denver. Rates vary by unit size. A 10’ x 15’ unit goes for $149/month and Go Green runs a waitlist on most of its sizes.
When rent is late, DeJacamo reaches out by phone, email and letters. Most renters settle their accounts. A few do not. “All of the units we are auctioning today have been in default for over a year,” she says. “The renters have ceased all communication with us.”
Unlike most large storage companies, Go Green owner Vaughn Thomas believes in giving second chances, but he’s more cautious than he used to be.
“You have to feel people out,” Vaughn said, “Are they genuinely going to pay you, or are they jerking you around? Ultimately you have to get the unit rented to pay the bills.”
In some cases, people lease a unit only to abandon their stuff, figuring one month’s rent costs less than dumping it. No matter why a renter doesn’t pay, the facility has an automatic lien over the items if they do pay, Schur said.
On day 31 of unpaid rent, Go Green adds their own lock to the unit and blocks gate access for the renter.
Next comes the lock cut. DeJacamo and her staff cut a renter’s lock and, as required by law, conduct a threshold inventory. This is a list of items visible from outside the unit. Go Green sends this inventory list to the renter warning them of the upcoming auction if they don’t pay.
Colorado law requires the renter be given an additional 30 days to settle their account, for a total of 60 days before auction. Typically, several months elapse from the day rent is late to auction day.
Preparing for Auction Day
Many facility managers take photos or video of the inventory, and add a uniquely numbered seal to their lock, which breaks on entry – all protections from liability.
“Management tends, by practice, never to enter a unit,” Schur said.
If they do, they could be liable for claims from the renter that something was damaged or stolen.
“And if buyers think a manager has been in the unit, they won’t come to the auction,” Schur said.
Go Green waits to schedule an auction until 5 units were ready for sale. The more units for sale, the more buyers show up and potentially drive bidding higher. However, even with a good turnout, storage owners rarely make back what they are owed in rent. An auction is a last resort for owners, a way to cut their losses and protect them from liability.
Setting the Schedule
Shannon Schur has the tricky task of balancing each client’s ideal auction date with making auctions convenient for buyers – many of them repeat customers – by clustering multiple auctions geographically.
A week before and again about 3 days before auction, DeJacamo confirmed with the Schurs the number of units Go Green had for sale, information that was loaded onto the Schur Success website, where their list of auctions is updated daily.
Schur Success scheduled two auctions in nearby towns the same day as Go Green’s, but both cancelled. Usually cancellations happen because a renter has paid or a facility manager realizes they haven’t met the legal hurdles required to go to auction on a certain unit, Schur says. In either case, with fewer units to sell, they decide to wait.
“Renters have the right to pay their debt up until the auctioneer cries, ‘sold,’ ” Schur says. “We’ve had people run up in the process of auction and say, ‘I’ll pay, I’ll pay!’”
With Go Green’s auction ready to begin, none of the due renters show up, only eager buyers arriving in pick-up trucks.
As DeJacamo opens each unit, buyers stroll by single file. They stand on tiptoe and shine flashlights into the darkness, quietly calculating risk versus reward. Most buyers know they will dump much of what they bid on, in hopes that a handful of items, and possibly a few hidden treasures – tools, jewelry, art, guns – will net a profit when they resell online or in flea markets.
Buyer Tim Mercer makes the day’s highest bid of $950, for two units rented together. Storage auctions are a hobby, he says. He sells some items at weekend sales and others at his restaurant, The Cracked Egg, in Milliken, a town 30 minutes north.
After the last unit sells, buyers head to the office to pay their agreed upon bids plus a $100 deposit that’s refunded once they clear out the unit. Most facilities give buyers 24 hours per unit. Some buyers pay taxes. Others don’t, if they have a reseller’s license.
Slim collects his company’s fee, a percentage of the more than $1,500 raised, plus the taxes Shannon Schur will sort out in the coming weeks. He leaves a summary document with DeJacamo, which includes each buyer’s name, the unit they purchased, seal number, sales price, and Schur Success’ commission amount. This document also includes a net sale number for each unit, the sales price less the rent and fees owed. It’s usually a loss. The storage facility can write it off or send the debt to collections, something Go Green does for with higher debts.
In the rare case a storage unit sells for more than what the renter owes, renters are entitled to that amount and have two years to claim it, Schur said. However, after they’ve avoided calls, emails and letters for months, most renters don’t.