Auction Glossary

Absentee Bid: A procedure which 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 his representative. The particular rules and procedures of absentee bids are unique to each auction company.

Absentee Bidder: A person (or entity) who does not attend the sale but submits, in advance, a written or oral bid that is the top price he or she will pay for a given property.

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.

Agent: A person who acts for or in the place of another individual or entity by authority from them.

Appraisal: The act or process of estimating value.

"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 referred to as: public auction, auction sale or 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 Value: The price which a particular property brings in open 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: 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.

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.

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 he or she will pay to purchase property at auction. Bids are usually in standardized increments established by the auctioneer.

Bid Rigging: The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value.

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 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.

Broker Participation: An arrangement for third-party brokers to register potential bidders for properties being sold at auction for a commission paid by the owner of the property or the auction firm.

Buyer's Premium: An advertised percentage added to the high bid to determine the total price to be paid by the buyer.

Brochure: A publication advertising and describing the items available for sale at public auction, including photographs, item descriptions, and the terms and conditions of the sale.

Cashier: The person who does the accounting at an auction.

Clerk: The person who records what is sold and to whom and for what price.

Collusion: The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value or when the auctioneer accepts a fictitious bid on behalf of the seller so as to manipulate or inflate the price of the property.

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.

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.

Lot: An item or grouping of items to be sold at auction.

Market Value: The highest price in terms of money which 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 Opening Bid: The lowest acceptable amount at which the bidding must commence.

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 many sellers, offered through a common promotional campaigns that are auctioned in a single event.

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

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

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

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

Reserve Auction: An auction in which the seller reserves the right to establish a reserve price, to accept or decline any and all bids or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer. See also Auction With Reserve.

Sealed Bid: A method of sale utilized where 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 market place.

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

Terms: The period of time that an agreement is in effect.

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 and must be resolved by the auctioneer.