Glossary of Auction Terms

 

Absentee Bid - A bid by a person not present at the auction.

Absentee Bidder - A person or entity who is not physically present at an auction but submits a written or oral bid, in advance (generally at preview), to the auctioneer or an auction representative, of the top price he/she is willing to pay for a specified item. The auction company will have a standard practice for handling the absentee bid. Generally somebody will bid on behalf of the absentee bidder, as if they were there, whether it be the auctioneer or another appointed person. The guidelines may vary between auctioneers & auction companies. The absentee bidder may win the bid on the property at the next increment over the last bid offered by the audience or next highest absentee bidder.

Absolute Auction - An auction at which the merchandise or property is to be sold to the highest bidder without regards to the price received. At an absolute auction, the seller is not allowed to bid, either personally or through a representative, on their own merchandise. The exception to this is a forced sale. Also known as an auction without reserve.

Accounting of Sale - A report issued to the seller by the auctioneer or an auction representative with the financial information from the auction.

Appraisal - The act or process of estimating value. Value may be fair market value, liquidation value or auction value.

"As Is" - Prospective bidders are encourage to inspect closely the property being sold prior to bidding and to determine through the inspection, to be of acceptable quality and value, separate and distinct from any representation made. The auctioneer shall not be responsible for the correct description, authenticity, genuineness of, or defect in any lots, and makes no warranty in connection therewith. As no warranty is given with any lot, therefore no sale is invalid or voidable by reason of any fault in any lot or by reason of any lot being incorrectly described (in the catalogue or otherwise), and no compensation may be paid for any such fault or error in description or any imperfection not noted. No deduction will be allowed on damaged articles as all goods being exposed for public exhibition are sold “as is, where-is” and without guarantee or recourse.

Auction - A method of selling property, both personal & real, through open and competitive bidding, where the buyer is the highest bidder. Also referred to as: public auction.

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

Auction Price - The price obtained through auction on particular personal or real property.

Auction Value - The value which is obtained at auction on a specific item when sold by a knowledgeable seller to a knowledgeable buyer when there are no other factor which effect the price received.

Auction With Reserve - An auction at which the seller(s) or his/her representative reserve the right to set the minimum acceptable price for an item. The minimum price may or may not be disclosed. If the last bid is below the minimum acceptable price, the sale of the item is subject to owner confirmation. The seller(s) or his/her representative reserves the right to reject any or all bids below the set price. See also Absolute Auction.

Auction Without Reserve - See Absolute Auction.

Auctioneer - The person(s) who the seller contracts to conduct and be responsible for a sale by auction. This is generally the person who is responsible for the bid calling at the auction.

Bank Letter of Credit/Guarantee - A notarized letter from a bank or other financial institution, on their letterhead certifying that they will guarantee a check up to a specified amount at a specified sale for a specified person. This letter is often requested from prospective bidders or buyers who are wishing to pay for purchases by personal or company check.

Bid - A bidder's indication or offer of a price he/she is willing to pay to purchase personal or real property at auction. Bids are usually called in standard increments established by the auctioneer.

Bid Assistants - Persons who are positioned throughout the potential bidders at the auction to help the auctioneer spot bidders and assist potential bidders with questions and information to help them in their buying decision. Also known as ringmen.

Bid Caller - The person who actually "calls," "cries" or "auctions" the bids on property at an auction, recognizes bidders and acknowledges the highest bidder. Commonly called the auctioneer.

Bid Rigging - An unlawful agreement between two or more people, not to bid against one another to deflate the auction value and to cheat the seller. Also known as collusion.

Bidder Number - The number issued to each person who registers at an auction which is used to identify who has and/or wins the bid.

Bidder Package - The package of information, terms and instructions pertaining to the property to be sold at an auction event obtained by prospective bidders at a given auction.

Bidder's Choice - A method of auction where the successful bidder has the right to pick the item or items he/she wishes to purchase at the bid price per piece. Generally the merchandise is grouped in similar or like properties. Often, the merchandise left will be offered to the general bidders at the same price, on a first come, first serve basis. Any merchandise left may be re-auctioned later in the auction.

Buyer's Premium - A percentage of the high bid added to the bid price to determine total amount paid for a particular item. If an auction contains a buyer's premium, it must be advertised as such.

Catalog or Brochure - A publication advertising and describing the property(ies) to be auctioned which includes terms and conditions of the auction and which may or may not contain photographs of merchandise.

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 - The person in the auction staff which is responsible for recording what is sold, the bidder number of the purchaser and the amount bid.

Collusion - The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value or when a fictitious buyer (shills, puffers & by-bidders) bids on behalf of the seller so as to manipulate or inflate the price of the property.

Conditions of Sale - The legal terms set forth for an auction which includes condition of property to be sold, acceptable payment terms, buyer's premiums, possession & removal of property, absolute or reserve auction and any other terms of the sale.

Dual Agency - When a person acts as agent for opposing principals (buyers and seller) at the same time. Also known as Intermediary.

Estate Sale - Normally thought of as 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. Living Estate Sales involve the personal property of a living individual. Often a living estates may be prompted by a move or relocation.

Hammer Price - The amount of the successful bid which the auctioneer acknowledges at the fall of the hammer or gavel.

Market Value - The price at which the property would change hands between a willing buyer & a willing seller, neither being under the compulsion to buy or the compulsion to sell and both having reasonable knowledge of the relevant facts.

National Auctioneers Association - An association of individual auctioneers committed to professionalism in the auction profession, maintains code of ethics for member auctioneers, and promotes the enactment of just and reasonable laws, ordinances and regulations governing auctions. NAA conducts educational seminars and promotes the auction method of marketing in both the private sector and among government agencies.

No-Sale Fee - A fee paid to the auctioneer for merchandise offered through auction with reserves when the property does not meet the minimum acceptable bid and does not sell.

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

One Money - If the auctioneer had said Lot #72 is going for ‘one money’ and you bid $30, you would be purchasing the whole lot (all of the chairs) for only $30 (plus buyers premium and sales tax, as applicable). Listen to the auctioneer carefully. If you do not understand, stop them and have any questions resolved then and there. Please, do not wait and bring your misunderstanding to the cashier. At this point, it is too late.

On-site Auction - An auction conducted on the premises, of the seller, where the personal or real property is located.

Preview - Specified date and time property is available for prospective buyer viewing and inspection.

Reserve - The minimum price that a seller is willing to accept for a property to be sold at auction.

Reserve Auction - An auction at which the seller(s) or his/her representative reserve the right to set the minimum acceptable price for an item. The minimum price may or may not be disclosed. If the last bid is below the minimum acceptable price, the sale of the item is subject to owner confirmation. The seller(s) or his/her representative reserves the right to reject any or all bids below the set price. See also Absolute Auction.

Sealed Bid - A method of auction where confidential bids are submitted within a specified time and award of property is made to the highest bidder upon opening of bids.

Seller - An individual or other legal entity that has legal possession, (ownership) of any interests, benefits or rights inherent to the real or personal property.

Tax Sale - Public sale of property at auction by governmental authority, due to nonpayment of property taxes.

Terms and Conditions - The legal terms set forth for an auction which includes condition of property to be sold, acceptable payment terms, buyer's premiums, possession & removal of property, absolute or reserve auction and any other terms of the sale.

Times the Money  - The price you bid will be ‘times the number of items’ in the lot. Example: Lot #72 has 10 chairs and the auctioneer says this lot is ‘times the money. If you bid $6.00, you are bidding $6 per chair. You would pay $6 X 10 = $60.00 (plus buyers premium and sales tax, as applicable).

Tie Bids - When more than bidder bids the same amount at the same time and must be resolved by the auctioneer. Generally this is not an issue. The auctioneer scans the crowd during the bidding and acknowledges the first bidder seen.

Withdrawal - Removal of property prior to bid or failure to reach the minimum acceptable or reserve price due to insufficient bidding.