March 7, 2016

Auction Terminology

Here is a list of the most common terms used in the auction industry.

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.
Accounting of Sale: A report issued to the seller by the auctioneer detailing the financial aspects of the auction.
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. A valuation of property (ie. real estate, a business, an antique) by the estimate of an authorized person. In order to be a valid appraisal, the authorized person should have a designation from a regulatory body governing the jurisdiction the appraiser operates within.
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.
Auctioneer: The people whom the seller engages/contracts to direct, conduct, or are responsible for a sale by auction. This person may or may not actually call or cry the auction.
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 Plan: The plan for pre-auction, auction day and post auction activities.
Auction Value: The price that 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.
Authentication: A process, in which it is determined if an item is genuine and is as described.
Automatic Extension: An option for sellers where if there are bids made near the closing time at the end of an auction, it is extended for a period of time.
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 Acknowledgment: A form executed by the high bidder confirming and acknowledging the bidders identify, the bid price and the description of the property. Also known as Memorandum.
Bid Assistants: 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 consultants, bid spotters, or grounds men.
Bid Caller: 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.
Bid Cancellation: The cancellation of a bid by either buyer or seller.
Bid Retraction: A cancellation of the bid by the seller or auctioneer.
Bid Rigging: The 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.
Blacklist: A list that blocks certain bidder from participating in your auction. On eBay it’s known as a “blocked bidder” list.
Buyer’s Premium: 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.
Catalog or Brochure: A publication advertising and describing the property/ies available for sale at public auction, often including photographs, property descriptions, and the terms and conditions of the sale.
Clerk: The person employed by the principal auctioneer or auction firm to record what is sold and to whom and for what price.
Closing: The time that the last bid will be accepted – the end of the auction.
COA: Certificate of Authenticity – presents written documentation that an item is genuine.
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 that creates or modifies a legal relationship.
Deadbeat Bidder: A bidder who does not pay for their auction winnings.
Dual Agency: The representation of opposing principals (buyers and seller) at the same time.
Hammer Price: Price established by the last bidder and acknowledged by the auctioneer before dropping the hammer or gavel.
Increment: The minimum amount a bid can be increased by.
Initial Bid: The lowest amount that can be entered by the buyer. Amount is set by seller and is also known as minimum bid.
Live Auction: This is an auction that takes place in “Real Time” including online.
Market Value: The open market value of an item.
Maximum Bid: The upper bid limit set by the buyer when using proxy or “automatic” bidding.
MIB: Mint in box.
Minimum Bid: The smallest amount that can be bid by a buyer.
Minimum Bid Auction: An auction in which the auctioneer will accept bids at or above a disclosed price. The minimum price is always stated in the brochure and advertisements and is announced at the auctions.
NOS: New old stock
No-Sale Fee: A charge paid by the owner of property offered at a reserve auction if the property does not sell.
Non-Paying Bidder: A bidder that does not pay for items they have won.
On-site Auction: An auction conducted on the premises of the property being sold.
Opening Bid: The first bid offered by a bidder at an auction.
Preview: Specified date and time property is available for prospective buyer viewing and audits. Also known as Open House or Inspection.
Proxy Bid: A method of bidding in which the computer automatically places bids for you at the lowest increment up to a maximum bid you have set.
Re-listing: The process of listing an item again if it did not initially sell.
Reserve: A price set by the seller that buyers must meet before the seller is obligated to sell.
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.
Sale Manager: The person designated by the auction company who is responsible for organizing the details of an auction. Also known as project manager.
Sealed Bid: A method of sale utilized where confidential bids are submitted and 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 the real or personal property.
Sniping: A bidder that places their bid in the last minutes or seconds of an auction.
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.
Trustee’s Sale: A sale at auction by a trustee.
Verification: The process to verify the identity and condition of an item.

 

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