The following are some basic terms you might want to know when you go to an auction.
A person (or entity) that does not attend the sale but in advance submits a bid that is their top price that they will pay for a given property.
Absolute Auction (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. Also known as an auction without reserve.
The act of or process of estimating value.
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 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 Subject to Confirmation
This means the seller reserves the right to accept or decline the hi bid at the end of the auction.
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.
Individuals who are positioned throughout the attendees at the auction to assist the auctioneer, spot bidders and assist prospective bidders with information to help them in their buying decision. Also known as ring men, bid spotters, or grounds men.
The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value.
The number issued to each person who registers at an auction.
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.
Bookkeeper or Clerk
The person who is responsible for the accounting and paperwork at an auction sale.
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.
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.
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.
The auction house may enter a bid on behalf of the seller, if the Reserve Price is not met. This is a counter bid, and gives buyers and sellers more flexibility to find a mutually agreeable price, since the property will not sell if the reserve price is not met. Counter bids do not occur after the seller’s reserve price is reached.
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. In a living estate the owner may not be deceased they are just liquidating their belongings. For instance, when someone is moving into a nursing home and has no more need for their possessions.
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.
A group of properties offered through a common promotional campaign. The properties to be auctioned may be owned by one seller or multiple sellers.
Properties owned by many sellers, offered through a common promotional campaign are auctioned in a single event.
An auction conducted on the premises of the property being sold.
The first bid offered by a bidder at an auction.
The minimum price that a seller is willing to accept for a property to be sold at auction. Also known as the reserve price.
Entity that has legal possession, (ownership) of any interests, benefits or rights inherent to the real or personal property.
Public sale of property at auction by governmental authority, due to nonpayment of property taxes.
Terms and Conditions
"Terms and Conditions" are something you will see at every auction you attend. They will vary according to the type of asset being sold.
When two or more bidders bid exactly the same amount at the same time and must be resolved by the auctioneer.
Failure to reach the reserve price or insufficient bidding.