Useful Auction Terms
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/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. Also known as an “Auction Without Reserve”.
AGENT:
A person who acts for or in the place of another individual or entity by authority from them.
“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 and real estate in a public forum through open and competitive bidding. Also referred to as “ Public Auction,” Auction Sale” or “Sale”.
AUCTION WITH RESERVE:
Also known as “Reserve Auction” and “Auction Subject to Confirmation”. 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.
AUCTIONEER:
The person whom the Seller engages to direct, conduct, or be responsible for a sale by auction. This person may or may not actually “call” or “cry” the auction.
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 auction.
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 “Ringmen”, “Bid Consultants”, “Bid Spotters”, “Groundsmen”.
BIDDER NUMBER:
The number issued to each person who registered 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/items. After the high Bidder’s selection, the property/item is deleted from the group, and the second round of bidding commences, with the high Bidder in round two selecting a property/item. That property/item is then deleted from the group, and the 3rd round begins, continuing until all properties/items are sold.
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.
CLERK:
The person employed by the Principal Auctioneer or Auction Firm to record what is sold and to whom and for what price.
COMMISSION:
The fee charged to the Seller, Buyer or both by the Auctioneer for providing services, usually a percentage of the gross selling price of the property established by contract 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 which creates or modifies a legal relationship.
DUE DILIGENCE:
The process of gathering information about the condition and legal status of assets to be sold.
ESTATE SALE:
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. NOTE: There sometimes are “LIVING ESTATE AUCTIONS”, where the Seller is alive, but wishes to liquidate personal belongings and has hired the Auctioneer to do so.
RESERVE:
The minimum price that a seller is willing to accept for a property to be sold at auction. Also known as RESERVE PRICE.
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. Also known as AUCTION WITH RESERVE.
TERMS AND CONDITIONS:
The stated 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.
TIMES THE MONEY:
When a set of like kind items are being sold or land being sold by the acre sometimes the Auctioneer will sell the item or tract "Times the money." For instance, if an Auctioneer says "four times the money" on a set of chairs and the winning bid is $20, the Bidder must take all four chairs for $20 each or $80.
