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
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
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: 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
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
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
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
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
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
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.