How Do Storage Auctions Actually Work?

Here at Albuquerque Self Storage, we sometimes get questions from people who have watched shows like “Storage Wars” or “Auction Hunters” and are curious as to how real those shows are, and we’d like to take the time to chat about auctions and any misconceptions that might surround them. We might just throw in some fun facts too, because can you ever know too much about the storage industry? We think not. 

What are storage auctions?

Whether you’re a fan of “Auction Hunters” or you’re just curious, let’s just take it back to basics for a second. What even is a storage auction? Simply put, it’s a method that the state government has given storage property owners in order to cover the cost of tenants who are way past due on rent. So first of all, we never want to sell someone’s stuff. Someone has stored something with us because it is valuable to them, even if the item to anyone else seems simple, sentimental value is something that no one else is able to measure. And there are a lot of steps that we follow before it even gets to the point of auction, but when a tenant is extremely past due with payments, a storage auction is one of the only ways we have of recouping losses and making the space available for new, paying tenants.    

 

What’s the Process?

The process of auctioning a unit varies state by state, but in New Mexico, the state legislature has made it so that there are many points in the process before getting to auction that a tenant can reclaim their property. In New Mexico, the lien (auction) process of actually selling property can’t happen until the tenant has been in default for over 90 days. And by this point emails have been sent, calls made, notices posted, all following the letter of the law which allows the tenant to reclaim their property before any sale is made. Documents sent to the tenant outline any charges incurred to that point, and a tally of any additional costs breaks down the amount to make the process as clear and transparent as possible. We really don’t want to sell your stuff. You like your stuff. We like your business. We’d like to keep everyone happy. And contrary to popular belief, we don’t make money selling units. In New Mexico, any additional money from auctioning a unit past the money owed is frozen for two years while it waits for the tenant to claim the balance of the auction money.   

So, Storage Wars?

The show makes for good T.V. But, not so good a model to follow in terms of practical application, or even the law. “Storage Wars” goes for the thrill of whipping out the bolt cutters and cracking open the unit for us (and the bidders) to see the goods for the first time. But that can’t really happen. First of all, New Mexico law has us entering the unit after 30 days of delinquency to catalog the unit, so no surprises on auction day. There are just too many things that we have to be aware of that can’t just be sold casually, and that requires additional documentation. This could be anything from a vehicle to firearms. We have to have time to assess the legality of the items stored there as well–we know Breaking Bad was filmed here and all, but no illegal activity, please. 

 

Auction Day

Unlike reality T.V. you’re not going to find signed Beatles memorabilia or rare Elvis Presley newspapers. Those things are largely staged and scripted. It creates drama and suspense for the show, absolutely, but we’d just like to be upfront about the reality of auction day. Real public biddings have to go through a series of steps, everyone who shows up auction day to bid has to sign-in, get ID’d, and any unit they buy has to be cleared out within a set time. One thing the shows do get right is that it is units that are sold, not item by item sales, and any potential bidder is not allowed to enter the unit but has to just take a good look and see if the contents of the unit seem worth a bid or two.  

At the end of the day, we’d rather tenants keep the things they care about. We simply try to operate a successful business, and that can be made difficult if we lose revenue because of non-payment. So while not as exciting as T.V. makes it to be, auctions are a reality of the self-storage world. Though, we wouldn’t mind some Beatles memorabilia. If you have any more questions or are just curious about the process drop us a line, oh, and tell us your favorite Beatles song.