Auction Terminology

ABSENTEE BID (AKA PROXY BID)
An absentee bid is sometimes called a proxy bid. It is a convenient option for someone who is not available to bid in person or online on auction day. Proxy bidding also makes it easier for you to bid on items when you cannot make it to the auction. When you place a proxy bid, the auctioneer will bid on your behalf, up to and including the amount you specify as if you were present at the auction. You can place a proxy bid by emailing, faxing, or by directly handing the absentee bid form to our personnel at the auction site.
ABSENTEE BIDDER
A person (or entity) who does not attend the sale but submits, in advance, a written or oral bid that is executed on his behalf by the auction company.
ABSOLUTE AUCTION
The term absolute auction means that the property will be offered for sale at auction without reserve and will be sold to the highest bidder regardless of price.
AGENT
A person who acts for or in the place of another individual or entity by authority from them.
AGREEMENT OF SALE
The legal contract between the buyer and seller of a real estate property including the sale price, settlement date, and all terms and conditions of the sale.
AS IS
The property sold at auction is normally in as-is condition meaning it is sold without any warranty as to the condition and/or the fitness for a particular use. Buyers are solely responsible for determining the condition of the property being offered for sale and, therefore, should take advantage of the inspection period.
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.
BALLROOM AUCTION
An auction conducted in a room in which the bidders are seated and the property offered for sale is displayed on projection screens.
BID
An offer of a price that a bidder is willing to pay for property at auction. Bids are usually in standardized increments established by the auctioneer.
BID ASSISTANTS
Employees of the auction company who assist the auctioneer in recognizing bids from prospective buyers. They also provide information to prospective bidders to assist them in their buying decision. They are also known as ringmen or bid spotters.
BIDDER’S KIT
A bidder’s kit is the package of information and instructions pertaining to the real estate property being offered for sale at auction.
BIDDER NUMBER
The number issued to each person who registers at an auction.
BIDDER’S CHOICE (BUYER’S CHOICE)
A method of sale whereby the successful high bidder wins the right to choose a lot or lots from a grouping of similar or like-kind items. After the high bidder’s selection, the lot is deleted from the group, and the second round of bidding commences, with the high bidder in round two choosing a lot, which is then deleted from the group and so on, until all lots are sold.
BID INCREMENT
The dollar amount by which the current bid is advanced.
BROKER
A real estate professional who represents the buyer in a real estate transaction.
BROKER PARTICIPATION
An arrangement in which a real estate professional representing a potential bidder in a real estate transaction is able to earn a share of the auction company’s commission.
BUYER’S PREMIUM
An additional fee paid by the buyer, normally a percentage added onto the final bid price.
CATALOG
A numerical listing of items available for sale at auction, often including detailed descriptions, quantity, unit, and the terms and conditions of the auction.
CURRENT BID
The present high bid. To become the current high bidder, you must advance the bidding by the next acceptable bid increment.
FINDER'S FEE
A fee paid to an individual or entity for bringing a business deal to the auction company. The finder will often serve as an intermediary until the deal is consummated. The fee is usually based on a percentage of the profit created by the deal.
INSPECTION
A period of time prior to the auction when prospective bidders may inspect the condition of the items available for sale.
LOT
A single asset or a group of assets. Lots are sold as a single unit for one price or as the quantity in each lot multiplied by the price.
MARKET VALUE
The highest price in terms of money that a buyer is willing, but is not under any duty, to pay for a particular property to an owner who is willing, but not obligated, to sell.
MAXIMIUM BID
The maximum bid is the most an absentee bidder is willing to bid on an item. The auction company will bid on behalf of the absentee bidder. The auction company will raise the existing bid by the proper increment and continue that process until the bidding stops or the maximum bid is reached. The auction company will not exceed the maximum bid and will try to buy the item as cheaply as possible below that maximum bid.
MINIMUM BID
The minimum bid is a price established by the seller below which the asset may not be sold.
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 auctioned in a single event.
NEXT ALLOWABLE BID
The next allowable bid is the current bid plus the bid increment.
ONLINE AUCTION
An online auction is a timed auction in which all of the bidding takes place over the internet. There is no onsite bidding during an online auction. Prospective purchasers can bid from anywhere they have internet access. Online auctions run for a designated period of time during which bidders from multiple locations can bid competitively on any lot in the sale.
OPENING BID
The price at which the auction of an item begins. Also called starting bid.
REGISTRATION
Registration takes place prior to the auction. Pertinent information is required from the prospective purchaser before receiving a bidder’s number. All participants are required to have a bidder’s number, which will be valid for that auction sale only.
RESERVE PRICE
The price at which the seller is obligated to sell the property. Reserve prices are set by the seller, are optional, and act to protect the seller’s financial interest in an asset. Minimum selling prices may or may not be published or announced. If the highest bid is below the reserve price, the seller may, at his discretion, sell the property at that price, but is not obligated to do so.
SEALED BID SALE
A sealed bid sale is one in which each bidder submits a single, irrevocable bid in a sealed envelope without knowledge of the other bids. When the bidding period is closed, the bids are opened, at which time the highest bid will be identified.
SETTLEMENT
The day in which the ownership of the property is transferred to the buyer. A deed or title from the seller is delivered to the buyer and the balance of the purchase price is paid by the buyer to the seller. Settlement usually takes place within 60 to 90 days from the date of the auction sale.
SUBJECT TO CONFIRMATION
The seller has the right to accept or reject any and all bids.
TERMS & CONDITIONS
The terms and conditions that govern the conduct of an auction including, but not limited to, buyer’s premium, time and manner of payment, inspection and removal dates. The terms and conditions are normally found in the catalog and are announced by the auctioneer prior to the start of the auction.
TITLE
A legal document provided by a qualified source showing legal ownership of property.
UNIT
An individual item being auctioned.
WEBCAST AUCTION
Webcast auctions are live auctions in which prospective purchasers may bid onsite at the location where the assets are located or they may bid over the internet at the same time the assets are being offered for sale onsite.