Auction Terms

Absentee Bid
A procedure that allows a bidder to participate in the bidding process without being physically present. Generally, a bidder submits an offer on an item prior to the auction. Absentee bids are usually handled under an established set of guidelines by the auctioneer or auction company. The particular rules and procedures of absentee bids are unique to each auction company.

Absentee Bidder
A person (or entity) that is not present at the auction but submits, in advance, a written or oral bid that is the top price they will pay for a given asset.

Absolute Auction
An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. The seller may not bid personally or through an agent. Also known as an "auction without reserve."

Accounting of Sale
A report issued to the seller by the auctioneer or auction company detailing the financial aspects of the auction.

As Is
Selling the property without warranties as to the condition and/or the fitness of the property for a particular use. Buyers are solely responsible for examining and judging the property for their own protection. Otherwise known as "As Is, Where Is" and "In its Present Condition."

Auction
A method of selling property in a public forum through open and competitive bidding. Also known as "public auction" or "auction sale."

Auction Block
The podium or raised platform where the auctioneer stands while conducting the auction. "Placing (an item) on the auction block" means to sell something at auction.

Auction Listing Agreement
A contract executed by the auctioneer and the seller which authorizes the auctioneer to conduct the auction and sets out the terms of the agreement and the rights and responsibilities of each party.

Auction Marketer
An individual who contracts with sellers for the auction method of marketing property. In the case of real property, the individual may not actually conduct the sale but is directly responsible for all aspects of marketing the property.

Auction Plan
The plan for pre-auction, auction-day and post-auction activities.

Auction Price
The price of a property obtained through the auction method of marketing.

Auction Subject to Confirmation
(See "Reserve Auction")

Auction Value
The price that a particular property brings via competitive bidding at public auction.

Auction With Reserve
An auction in which the seller or his agent reserves the right to accept or decline any and all bids. A minimum acceptable price may or may not be disclosed and the seller reserves the right to accept or decline any bid within a specified time.

Auction Without Reserve
(See "Absolute Auction")

Auctioneer
The person whom the seller engages to direct, conduct, or be responsible for a sale by auction. This person may or may not actually call or "cry" the auction.

Ballroom Auction
An auction of one or more properties conducted in a meeting room facility.

Bank Letter of Credit
A letter from a bank certifying that a named person is worthy of a given level of credit. Often requested from prospective bidders or buyers who are not paying with currency at auctions.

Bid
A prospective buyer's indication or offer of a price they are willing to pay to purchase property at auction. Bids are usually in standardized increments established by the auctioneer.

Bid Acknowledgment
A form executed by the high bidder confirming and acknowledging the bidder's identity, the bid price and the description of the property. Also known as "Memorandum."

Bid Assistants
Individuals of a live auction team whose primary responsibility is to accurately interpret and effectively communicate buyer participation to their auctioneer. They should also be qualified to assist prospective bidders with the necessary information to make a better informed buying decision. Also known as "ringmen", "bid spotters" or "groundsmen."

Bid Caller
The person who actually "calls," "cries" or "auctions" the property at an auction, recognizing bidders and acknowledging the highest bidder. Commonly known as the auctioneer.

Bidder Number
The number issued to each person who registers at an auction.

Bidder's Choice
A method of sale whereby the successful high bidder wins the right to choose an asset or assets from a grouping of similar or like-kind assets. After the high bidder's selection, the asset is deleted from the group, and the second round of bidding commences, with the high bidder in round two choosing an asset, which is then deleted from the group and so on, until all assets are sold. Also known as "Buyer's Choice."

Bookkeeper or Clerk
The individual responsible for the accounting and paperwork at an auction sale.

Buyer's Premium
An advertised percentage of the high bid or flat fee added to the high bid to determine the total contract price to be paid by the buyer.

Caveat Emptor
A Latin term meaning "let the buyer beware." A legal maxim stating that the buyer takes the risk regarding quality or condition of the property purchased, unless protected by warranty.

Clerk
An individual employed by the principal auctioneer or auction firm to record what is sold and to whom and for what price.

Commission
The fee charged to the seller by the auctioneer for providing services, usually a percentage of the gross selling price of the property established by contract (the listing agreement) prior to the auction.

Conditions of Sale
The legal terms that govern the conduct of an auction, including acceptable methods of payment, terms, buyer's premiums, possession, reserves and any other limiting factors of an auction. Usually included in published advertisements or announced by the auctioneer prior to the start of the auction. Also known as "Terms & Conditions".

Contract
An agreement between two or more persons or entities which creates or modifies a legal relationship.

Due Diligence
The process of gathering information about the condition and legal status of assets to be sold.

Estate Sale
The sale of property left by a person at his or her death. An estate auction can involve the sale of personal and/or real property.

Hammer Price
Price established by the highest bidder and acknowledged by the auctioneer before dropping the hammer or gavel.

Market Value
The highest price that a property will bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.

Minimum Bid Auction
An auction in which the auctioneer will accept bids at or above a disclosed price. The minimum price is always stated in the brochure and advertisements and is announced at the auctions.

Multi-Property Auction
A group of properties offered through a common promotional campaign. The properties to be auctioned may be owned by one seller or multiple sellers.

Multi-Seller Auction
Properties owned by multiple sellers, offered through a common promotional campaign and auctioned in a single event.

No-Sale Fee
A charge paid by the owner of property offered at a reserve auction when the property does not sell.

On-Site Auction
An auction conducted on the premises of the property being sold.

Opening Bid
The first bid offered by a bidder at an auction.

Preview
Specified date and time property is available for prospective buyer viewing and audits. Also known as "Open House" or "Inspection".

Real Estate (RE)
Real estate, also known as real property, is a legal term that encompasses land along with improvements to the land, such as buildings, fences, wells and other site improvements that are fixed in location -- immovable.

Reserve
The minimum price that a seller is willing to accept for a property to be sold at auction. Also known as "reserve price".

Sale Manager
The person designated by the auction company who is responsible for organizing the details of an auction. Also known as "project manager".

Sealed Bid
A method of sale where by confidential bids are submitted to be opened at a predetermined place and time. Not a true auction in that it does not allow for reaction from the competitive marketplace.

Seller
Entity that has legal possession (ownership) of any interests, benefits or rights inherent to the real or personal property.

Subject to Confirmation
See "Reserve Auction"

Terms and Conditions
The printed rules of the auction and certain aspects of the Purchase & Sale Agreement that are read and/or distributed to potential bidders prior to an auction sale.

Tie Bids
When two or more bidders bid exactly the same amount at the same time. This must be resolved by the auctioneer.

Trustee's Sale
A sale at auction by a trustee.

Uniform Commerical Code (UCC)
The UCC, first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all U.S. states.

Withdrawl
Failure to reach the reserve price or insufficient bidding.