GLOSSARY OF 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. 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.

ADVERTISING: Non-personal, paid communication such as a newspaper, radio, direct mail and TV directed toward the general public or, in some cases, specific prospective client groups to provide information about the time, place, contents, and arrangements of an 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.

APPRENTICE AUCTIONEER: An auctioneer who is in training, operating under the supervision of a licensed or experienced auctioneer.

"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 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 authorizes the auctioneer to conduct the auction and sets out the terms of the agreement and the rights and responsibilities of each party.

AUCTION PRICE: The price of property obtained through the auction.

AUCTION VALUE: The price which a particular property/item brings in open competitive bidding at public auction.

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.

BALLROOM AUCTION: An auction of one or more properties conducted in a meeting room facility.

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 buyer who are not paying with currency at auction.

BID: A prospective buyer's indication or offer of a price he/she will pay to purchase property at auction. Bids are usually in standardized increments established by the Auctioneer.

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", "Goundsmen".

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.

BIDDER NUMBER: The number issued to each person to registered at an auction.

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 or prior to the auction. sometimes called a "Bidder Packet" or "Due Diligence Package".

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.

BOOKKEEPER or CLERK: The person(s) who are responsible for the accounting and paperwork at an auction sale.

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 available for sale at public auction, often including photographs, descriptions, and the terms and conditions of sale.

CAVEAT EMPTOR: A Latin term meaning "Let The Buyer Beware!" A legal maxim stating that the buyer takes the risk regarding the quality or condition of the property purchased. Sometimes the property may be protected by warranty, but this is a rare occasion.

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 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.

GROUNDSMEN: See Bid Assistants.

HAMMER PRICE: Price established by the last bidder and acknowledged by the Auctioneer before dropping the hammer or gavel.

INSPECTION: Specified date, time and place property is available for prospective buyer viewing and evaluation. Also known as a PREVIEW.

MARKET VALUE: The highest price in terms of money which a property will bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.

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.

MINIMUM OPENING BID: The lowest acceptable amount at which the bidding must commence.

MULTI-PROPERTY AUCTION: Refers to Real Estate Auctions. A group of properties offered through a common promotional campaigns. The properties to be auctioned may be owned by one seller or multiple sellers.

NO-SALE FEE: A charge paid by the owner of property offered at a reserve auction when the property does not sell.

OPENING BID: The first bid offered by a bidder at an auction.

ON-SITE AUCTION: An auction conducted on the premises of the property being sold.

PREVIEW: Specified date, time and place property is available for prospective buyer viewing and evaluation. Also known as an INSPECTION.

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.

SEALED BID: A method of sale utilized where confidential bids are submitted to be opened at a predetermined place, date, and time. Many government auctions occur in this manner, as they accept bids from around the country (and probably the world!).

SELLER: Entity that has legal possession and ownership of any interests, benefits or right inherent to the real or personal property.

SUBJECT TO CONFIRMATION: See RESERVE 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.