Auction Terms Glossary
The following are some basic terms you might want to know when you go to an auction. Don’t worry though. There isn’t a test or anything. Just ask if you have questions.
This is a way you can bid even if you cannot attend the auction in person. Check with the auction company to see if this is available and how they make the bids for you. Some auction companies may allow absentee bids, phone-in bids, and online bidding. In a written absentee bids, you tell them what items to bid on and how high you will go. In phone-in bidding, you are actually on the phone in real time. Online bidding utilizes a bidding platform via the Internet.
The act of or process of estimating value.
“As Is, Where 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.”
The physical podium or platform where the auctioneer stands while conducting the auction. In an online auction, the podium is virtual.
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 (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.
The person whom the seller contracts with to engage, direct, conduct, or be responsible for a sale by auction using either a live auction format or an online auction format. This person may or may not actually call or cry 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 or online software.
A person who communicates a bid from a bidder to the auctioneer confirming and acknowledging the bidder’s identity, the bid price and the description of the property.
Bidder Number/Unique I.D.
The number or unique I.D. issued to each person who registers at an auction either live or online.
The package of information and instructions pertaining to the property to be sold at an auction event obtained by prospective bidders at an auction. This is sometimes called a bidder packet or due diligence package.
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 either deleted from the group or a new grouping is created. Then, the second round of bidding commences, with the high bidder in round two choosing a property or combination of properties, and so on, until all properties are sold.
Bookkeeper or Clerk
The person responsible for recording the bids at an auction sale.
A percentage added to your bid amount to establish the contract price. A Buyer’s premium is used by many auction houses as a way of spreading the cost of the event with the people who benefit most from the opportunity to purchase; the buyer. This information should be provided and disclosed to you in the terms and advertising for the auction.
Auction catalogs provide a listing of all items being sold in an auction, whether via live auction or online auction. If you are bidding in an online only auction, most often, there is a way for you to download a copy of the items being sold.
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.
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. Any other type of sale; i.e. moving or downsizing, should be identified as such.
Price established by the last bidder and acknowledged by the auctioneer before dropping the hammer or gavel.
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 improves the business conditions affecting the auction profession.
An auction conducted on the premises of the property being sold.
An auction conducted using the online format accepting online bids.
Most auction companies require payment for personal property items on auction day. If you are buying real estate at auction via live auction or online auction, most auction companies require a down payment day of sale and the balance at closing. It’s good to ask about this prior to attending so you are prepared when you arrive.
Refers to any commodity not considered to be real property.
Be sure to take advantage of the preview times made available for you to look over the items being offered for sale.
Houses, land, and commercial buildings are often referred to as Real Property.
The minimum price that a seller is willing to accept for a property to be sold at auction. Also known as the reserve price.
Sales Tax Exemption
The need to provide a tax exemption certificate will vary from state to state in the U.S. If you are a dealer, call to ask what will be needed. If you have a dealer number for tax exemption purposes, carry it with you when you attend auctions.
This method of sale is not widely utilized where confidential bids are submitted to be opened at a predetermined place and time. This is not a true auction in that it does not allow for reaction from the competitive market place.
Entity that has legal possession, (ownership) of any interests, benefits or rights inherent to the real or personal property.
A live auction conducted in person in front of bidders as well as an internet bidding audience simultaneously.
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 likely see at every auction, whether live or online. They will vary a according to the type of commodity being sold and the auction company. Every auction company will make their Terms and Conditions (sometimes referred to as T & C) available to every bidder. Read them.
Types of Payments Accepted
This can range from cash only to cashier’s checks or personal checks and credit/debit cards. Many times you will need a photo ID such as a driver’s license or other government ID when you register for the first time at a live auction event. If you are bidding online, the auction company may require for you to enter a credit card number associated with your bidder profile.
When two or more bidders bid exactly the same amount at the same time during a live auction event and must be resolved by the auctioneer.