Glossary of Auction Terms

Absentee Bid - When a person wishes to bid on a particular item at the auction without being physically present they may submit an absentee bid. This is a bid, the maximum amount he/she is willing to pay for a particular item, submitted to the auctioneer or an auction representative prior to 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 - Also known as an "auction without reserve." An auction at which the merchandise or property is to be sold to the highest bidder without regards to the price received. All auctions are considered to be "with reserves," unless specifically advertised as "Absolute." At an absolute auction, the seller is not allowed to bid on their own merchandise, either personally or through a representative. The exception to this is a forced sale, such as a court ordered or lien sale.

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, Where-Is" - A term which serves to encourage prospective bidders to closely inspect the property being sold prior to bidding and to make their own determination 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. Also see Caveat Emptor

Associate Auctioneer - An auctioneer who is in training, operating under the supervision of a licensed auctioneer. An associate auctioneer may not conduct an auction without the supervision of the licensed auctioneer.

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" or "Put up on the auction block" means to sell something at auction.

Auction Listing Agreement - A contract, either written or verbal, between the auctioneer and seller(s) authorizing the auctioneer to conduct the auction, and which sets forth the terms of the agreement as well as, the rights and responsibilities of each party. A contract must include three aspects: an offer, an acceptance and consideration for both parties.

Auction Plan - The "business plan" for the auction including pre-auction, auction and post auction activities & duties.

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.

Auctioneer Subcontractor - An auctioneer hired by the principal auctioneer to assist at a given auction. This is generally found only at larger auctions where the bid calling will last for an extended amount of time.

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 Acknowledgment - A form, giving bidder's identity, the bid price and the property description executed by the high bidder confirming and acknowledging their bid.

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, spotters, floor personnel.

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

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 - See Choice

Breach of Contract - Breaching a contract means breaking the agreement. If you do not do something you have agreed to do in a contract, it is a breach of a contract. In accordance with the terms and conditions of an auction, when the auctioneer calls "sold", a binding contract has been effected by the bidder and the auctioneer.

Broker Participation - An agreement between an auctioneer and a real estate broker or agent, where the real estate agent registers potential bidder(s) for properties being sold at auction. Normally, the broker's/agent's commission are paid by the auctioneer from the auction commission from the sale.

Buyer's Broker - In real estate, it is a real estate broker who represents the buyer and, as the agent for the buyer, may be paid for his/her services by the buyer or the seller based on agreement of parties.

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.

Carrying Charges - In real estate, the costs involved in holding a property which is intended to produce income (either by sale or rent), but has not yet done so, i.e., insurance, taxes, & maintenance.

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 meaning that the buyer takes responsibility for the risk regarding quality or condition of the property purchased, as there is usually no warranty for the property. Also see "As-Is, Where-Is"

Choice - Multiple items may be offered for bid and the winning bidder has the right to pick one or more items he/she wishes to purchase at the bid price per piece. Generally the merchandise is grouped in similar or like properties. At the auctioneers discretion, the merchandise left may be offered to the back-up bidder (second highest bidder) or the other bidders at the same price, on a first come, first serve basis.

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.

Consignment Auction - is when more than one party's property is included in the auction and each party is assessed a cost for sale or attempted sale.

Cooperating Broker - A real estate broker or agent who registers a prospective bidder with the auction company, in accordance with the terms and conditions for that auction; And completes the real estate contract on behalf of the buyer if they are the high bidder. The broker/agent is paid a their commission only if his prospect is the successfully bidder and closes on the property.

Creditor Notification - Notifications must be made to each secured party of the intention to sale collateral property (property held by a lien) to obtain permission to sale any secured property.

Distress Auction - is conducted under the direction or order issued by a proper court of jurisdiction or the sale is conducted for foreclosure purposes by a secured party.

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

Due Diligence - The act of gathering all important information about the condition and legal status of assets to be sold.

Escrow Account - A special bank account is required for the sole purpose of depositing and holding monies belonging to others (owners, lien-holders). It is unlawful for an auctioneer to commingle money belonging to others with his own personal or company funds.

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 estate may be prompted by a move or relocation, and often associated with those entering an assisted living or resthome.

Hammer Price - The amount of the successful bid which the auctioneer acknowledges at the "fall of the hammer" or otherwise proclaimed as "Sold."

Listing Agreement - See Auction Listing Agreement.

Listing Broker - The real estate broker who has the listing or seller's contract, on a property to be sold at auction or by conventional sale.

Liquidation Auction - Usually a total or partial liquidation that involves only one party's property in the auction.

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 - Currently the only national association of individual auctioneers in the auction profession.

National Real Estate Auction Committee - A national committee developed by the National Association of Realtors in 1990 to provide education to members concerning real estate auctions and tracks trends affecting the real estate auction industry. Responsibilities also include formulating policies for consideration by other policy-making NAR Committees, its Executive Committee and Board of Directors.

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.

One Money - The auctioneer may choose to group multiple items together and sell them "all for one money".
Example: If Lot #72 has 10 chairs and the auctioneer says this lot is going for 'one money' and you bid $90, you would be purchasing the whole lot (all of the chairs) for only $90 (plus buyers premium and sales tax, as applicable).

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

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

Pass - The withdrawal of property "up for bid" that either, has not received any bids or failure to reach a reserve price due to insufficient bidding.

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

Puffers - See Shill

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 is not required to be disclosed. If the last bid is below the minimum acceptable price, the sale of the item is not allowed and the item may be "Passed" or may be 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.

Sale Manager - The auction company person responsible for managing all aspects of the sale.

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.

Shill - A person who is employed by the seller to increase the price, by means of fictitious bids, for the sole purpose of inflating the price of the property; without any intention to purchase, and protected by a secret agreement with the seller that he shall not be liable for his bids. Also known as Puffers, or by-bidders

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.

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, as the auctioneer acknowledges the first bidder seen. However, there may be times when a ringman has a bid from someone and the auctioneer has a different bidder at the fall of the hammer. At the auctioneers discretion, he may reopen the bidding between the two bidders or he may choose to sell to the bidder he had.

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).

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

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