See below for a list of commonly used auction terms:
Auction – A method of selling property in a public forum through open and competitive bidding. Also known as “public auction” or “auction sale.”
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.
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.”
Bid – A prospective buyer’s indication or offer of a price they are willing to pay to purchase property at auction. Bids are usually in standardized increments established by the auctioneer.
Bidder Number – The number issued to each person who registers at an auction.
Bidder’s Choice – A method of sale whereby the successful high bidder wins the right to choose an asset or assets from a grouping of similar or like-kind assets. After the high bidder’s selection, the asset is deleted from the group, and the second round of bidding commences, with the high bidder in round two choosing an asset, which is then deleted from the group and so on, until all assets are sold. Also known as “Buyer’s Choice.”
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 – An individual 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 (the listing agreement) 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. Also known as “Terms & Conditions”.
Market Value – The highest price that 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.
Appraisal – The act or process of estimating value.
Auction Price –The price of a property obtained through the auction method of marketing.
Hammer Price – Price established by the highest bidder and acknowledged by the auctioneer before dropping the hammer or gavel.
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.
Opening Bid – The first bid offered by a bidder at an auction.
Preview – Specified date and time property is available for prospective buyer viewing and audits. Also known as “Open House” or “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”.
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.