Glossary of Auction Terms
A procedure which allows a bidder to participate in the bidding process without being physically present. Generally, a bidder submits an offer on a property or item prior to the auction. Absentee bids are usually handled under an established set of guidelines by the auctioneer or the auctioneer’s representative. The particular rules and procedures of absentee bids are unique to each auction company.
An auction without reserve. (See Auction Without Reserve) An auction in which property is sold to the highest bidder regardless of price. This typically generates a much greater interest among potential buyers resulting in greater attendance at the auction, and a higher final sale price for the property in question.
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.”
A method of selling real estate in a public forum through open and competitive bidding. Also referred to as: public auction, auction sale or sale.
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 With Reserve
(Also called Auction Subject to Confirmation) 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
Auction Without Reserve
An Absolute Auction. (See Absolute Auction) An auction in which property is sold to the highest qualified bidder; where no minimum price will limit the bid; where the seller may not withdraw
the property from the auction after the first bid has been received; and where the seller may not nullify the sale by bidding himself or through an agent. “Auction Without Reserve” is equivalent to the term “Absolute Auction”.
Back Up Bidder
Any bidder except the highest bidder. Many sellers reserve the right to sell the Back UP Bidder if the high bidder defaults.
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.
A prospective buyer’s indication or offer of a price he or she will pay to purchase property at auction. Bids are usually in standardized increments established by the auctioneer.
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.
A method of sale whereby the successful high bidder wins the right to choose a property or properties from a grouping of similar or like-kind properties. After the high bidder’s selection, the property is deleted from the group and the second round of bidding commences, with the high bidder in round two choosing a property, which is then deleted from the group and so on, until all
properties are sold.
The number issued to each person who registers at an auction.
(Also known as broker cooperation) An arrangement for third-party brokers to register a prospective buyer with the auction company. The broker is paid a commission by the owner ofthe property or the auction firm only if his prospect is the high bidder and successfully closes on
A percentage added on to your bid amount. In Real Estate it is an amount added to the high bid to determine the total contract price to be paid by the buyer. The use of the buyer’s premium benefits both buyers and sellers. Sellers benefit because it helps to defray many of the expenses associated with conducting an auction. The buyer benefits because without the use of this tool, there may not have been an auction. The competitive bidding process might not exist if the buyer’s premium were not used to offset some of the expenses. Check the terms and conditions of the auction to determine if there is a buyer’s premium.
A down payment made on auction day held in a trust or escrow account and credited to buyer at time of closing
The process of gathering information about the condition and legal status of property to be sold.
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.
National Auctioneers Association
An association of individual auctioneers united to promote the mutual interests of its members; formulate and maintain ethical standards for the auction profession; promote the enactment of just and reasonable laws, ordinances and regulations affecting auction selling; make the public more aware of the advantages of auction selling; and generally improve the business conditions affecting the auction profession.
The first bid offered by a bidder at an auction.
An auction conducted on the premises of the property being sold.
Specified date and time property is available for prospective buyer viewing and inspection. Also known as Open House.
Property Information Packet
A packet of information and instructions provided by the auction personnel pertaining to the property to be sold such as a contract, legal description, survey, terms and disclosure statements.
The process you must complete in order to be an eligible bidder. When you arrive at the auction, you should ask to register so that you may get a bid card. You will be asked to show identification to register. You may be required to verify that you have certified funds or cash in your possession. You must register at each auction event unless otherwise told by auction personnel (i.e.- you have a permanent bid number). This is crucial before bidding.
Terms & Conditions
The legal terms that govern the system of a specific auction. Each auction’s terms and conditions may vary and it’s crucial that the bidder understands them before participating in an auction. They include but are not limited to: method of payment, buyer’s premiums, possession, reserves and other limiting factors. Usually in advertisements or announced by the auctioneer prior to the start of the auction.