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Auction Glossary

The A-Z of terms or words you might come across in the Auction Process

  • Absentee Bid: A procedure, which allows a bidder to participate in the bidding process without being physically present. Generally, a bidder submits an offer on an item prior to the auction. The auctioneer or his representative usually handles absentee bids under an established set of guidelines. The particular rules and procedures of absentee bids are unique to each auction company.
  • 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.
  • 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.
  • 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 the judging the property for their own protection. Otherwise know 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 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 Listing Agreement: A contract executed by the auctioneer and the seller which authorises the auctioneer to conduct the auction and sets out the terms of the agreement and the rights and responsibilities of each party.
  • 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.
  • 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 standardised 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, recognising 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.
  • Bidder Package: The package of information and instructions pertaining to the property to be sold at an auction event obtained by prospective bidders at an auction. Sometimes called a bidder packet or due diligence package.
  • Bidders 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 link-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.
  • Catalogue 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.
  • Category Listing: A list of auctions by specific category.
  • Caveat Emptor: A Latin term meaning “let the buyer beware.” A legal maxim stating that the buyer takes the risk regarding quality or condition of the property purchased, unless protected by warranty.
  • Commission: The fee charged to the seller by the agent 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 payments, terms, buyers premiums, possession, reserves and any other limiting factors of an auction. Usually included in published advertisements 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.
  • Due Diligence: The process of gathering information about the condition and legal status of assets to be sold.
  • Escrow: A situation in which the buyer places money in a third party escrow account until both buyer and seller agree to release the funds. Usually used for higher priced items.
  • 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 estate.
  • Feedback: Positive or negative comments left by both buyer and seller for each other. Usually available to other auction users, feedback helps establish the reputation of the buyer or seller.
  • 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 auctioneer in consultation with the seller and is also known as minimum bid.
  • Listing Agreement: A contract between the seller and the real estate office allowing an item to be listed.
  • Listing Consultant: A real estate consultant who has a listing on a property and cooperates with the auction company by allowing the auction to supersede his/her listing agreement.
  • Live Auction: This is an auction that takes place in “Real Time” including online.
  • Market Value: The market value the public determines by the act of purchase.
  • Maximum Bid: The upper bid limit set by the buyer when using proxy or “automatic” bidding.
  • Minimum Bid: the smallest amount that can be bid by a buyer.
  • Multi-Property Auction: A group of properties offered through a common promotional campaign. The properties to be auctioned may be owned by one seller or multiple sellers.
  • Multi-Seller Auction: Properties owned by many sellers, offered through a common promotional campaign are auctioned in a single event.
  • On-site Auction: An auction conducted on the premises of the property being sold.
  • Opening Bid: The first bid offered by a bidder of an auction.
  • Preview: Specified date and time property if 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.
  • Auction Sales Manager: The person who is responsible for organising the details of an auction.
  • Seller: Entity that has legal possession, (ownership) of any interests, benefits or rights to the real or personal property.
  • Sniping: A bidder that places their bid in the last minutes or seconds on an auction.
  • Terms: The period of time that an agreement is in effect.
  • Terms and Conditions: The printed rules of the auction and certain aspects of the Purchase and Sale Agreement that are read and/or distributed to potential bidders prior to an auction sale.
  • Threshold: The highest price you are willing to pay for an item.
  • Tie Bids: When two or more bidders bid exactly the same amount at the same time and must be resolved by the auctioneer.
  • TOS: Terms of Service.
  • Trustee’s Sale: A sale at auction by a trustee.