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Here’s How Storage Auctions Work
When you rent a self-storage unit, you’re agreeing to certain penalties in the event on non-payment—including the possibility of a storage auction. But how do storage auctions work, and what should you do if you think that your stuff is about to be auctioned off?
Storage auction shows have taken off in recent years on reality TV, and for the most part, they’re a pretty accurate depiction of how storage auctions work, including the potential profit that buyers can make off of them. What’s a lucrative opportunity for some people however is a not-so-great situation for others, and it’s helpful to understand both sides of the coin with regards to storage auctions.
Here’s the 411 for both storage unit renters and auction hunters, with a quick look at how storage auctions work and why they happen in the first place.
Why storage auctions happen
Every storage company has its own rules, regulations, and non-payment policies. And while precise terms may vary, in general, self-storage renters can expect that they have a certain amount of time to pay their rent each month, and that if they fail to do so, their unit will go up for auction—often at the point when their payment is between 30 and 90 days overdue. Another scenario that may lead to a storage auction is if a renter has cleared out their unit but left some items behind.
In addition to company policies, there are also state laws that dictate how long a payment must be overdue before an auction can take place. During this time, the storage facility operator must attempt to reach the renter and secure payment. If rent isn’t paid due to financial hardship, they may also offer alternate options, such as a payment plan.
The point of storage auctions is two-fold: to help companies redeem lost profit from non-payment and to help them clear out the unit for a future renter. It’s also an alternative to simply sending left behind items to a landfill, especially in cases where the abandoned belongings have value or can still be put to use.
If you are unable to pay for your storage unit, contact the facility immediately instead of letting your unit go into default, at which point you will be locked out and unable to redeem your belongings. Read through your contract for information on the specifics terms and policies that you’ve agreed to, and be prepared to empty out your unit if you will be unable to meet your payments moving forward.
How storage auctions work
Storage auctions happen in three parts:
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- The pre-auction period
- The auction itself
- The post-auction period
The pre-auction period
During the pre-auction period, storage companies will advertise the upcoming storage unit auction and arrange for an auctioneer to conduct the process. For those who are interested in participating as a bidder, aggregate sites like Storage Treasures will post upcoming auctions for an easy way to find out where and when auctions are taking place. Some storage auctions take place online, though many are done on site.
Bidders must register in advance for auctions, and should check the auction details to see whether this must be done in person or whether it can be done online. Rules may vary, but generally an individual must be at least 18 years of age in order to participate in the auction and must present a valid driver’s license.
The auction
To start the auction, the storage company will cut the lock on a unit and allow potential bidders to get a look inside. Important to note is that bidders are usually not permitted to enter the unit itself, and may only glance at the contents from a distance. In the event of online storage auctions, there will be a picture attached of the inside of the unit, but again, there won’t be many details provided on exactly what items are in there.
As for bidding itself, there are a number of rules that govern the process and help ensure that it’s done fairly:
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- Bidders must bid on entire units, and are not allowed to bid only on specific items
- The win goes to the highest bidder, who must pay the amount in cash starting with a deposit or full payment on site
- Winning bidders generally have about 24 to 48 hours to clear out the unit
- All bids must be out in the open and no sealed bids are accepted
How much a storage unit auctions off for is highly dependent on who’s doing the bidding and the potential that they see inside. A mostly empty unit may go for as low as $10, while a promising unit that’s packed to the brim and shows the potential for high-priced items could go for $1,000 or more.
The post-auction period
Just like there are rules for how storage auction work, there are also rules around what can and cannot be done with the items themselves. For example, important documents belonging to the previous renter—including things like birth certificates and family photos—must be retained by the storage facility, who will then attempt to return them to their owner. And if there are any firearms, they must be handed over to law enforcement.
As for vehicles, because there is no title to hand over they cannot be driven off the lot and must be sold for parts.
As always, assume that the rules may be different depending on the state and the storage company, though these are all pretty standard requirements. Other fees that winning bidders may face include a cleaning fee with the storage facility as well as potential sales tax to the state.
What to do if a storage company is going to auction your stuff
Nobody wants to be in the situation of having their belongings put up for auction. Unfortunately though, storage auctions are a common occurrence, and there’s a big market of bidders who are on the lookout for any new auctions that pop up.
If you think that your storage unit is at risk of going up for auction—and especially if you have been notified by your storage provider that you are reaching the limit on an overdue payment—it’s important to act fast. Companies would rather have you pay your balance than put your unit up for auction, so see if a payment plan is necessary to take care of your outstanding balance.
Look to your storage lease agreement to see how long after non-payment your unit will be locked. If you still have time to spare and know that you will be unable to pay your rent, ask if you will be able to come by and remove some or all of your items.
Storage auction FAQs
Answers to some of the most common questions that people ask about storage auctions
How long before storage lockers are auctioned?
That depends on the facility and the state laws, though the standard amount of time before storage auctions happen is 30 to 90 days after an overdue payment.
What happens to a storage unit if the renter dies?
If a renter passes away, the storage company will attempt to contact loved ones so that they can either continue paying for the unit or clean it out. If these attempts are unsuccessful, the unit will go up for auction.
Do storage operators remove valuables prior to the auction?
No, it is very unlikely that a storage operator will interfere with the unit in any way prior to having it auctioned off. Keep in mind that auctions are a last resort for companies, rather than just an additional way that they make a profit.
Do storage companies keep the full profit of an auction?
No. Storage companies must pay to both advertise the auction and for the services of the auctioneer, and often only keep about 50% of what the winning bid is.
How can you tell what’s inside a storage unit?
Because you can’t walk through and touch the items in a storage unit before placing a bid, it can be somewhat difficult to figure out exactly what’s in there—and how much it might all be worth. Bring a flashlight with you to get a better view, and make sure to arrive to the auction early, since units are often resealed before the bidding process gets started.
For more information on how storage auctions work, look to the specific auction policies of various storage companies. And if you’re interested in becoming a bidder, look up storage auctions near you to find out where the closest auctions are taking place.