Auctions 101: Terminology

• Absentee Bid - A procedure that 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. Absentee bids are usually handled under an established set of guidelines by the auctioneer or auction company. The particular rules and procedures of absentee bids are unique to each auction company.

• Absentee Bidder - A person (or entity) that is not present at the auction but submits, in advance, a written or oral bid that is the top price they will pay for a given asset.

• Auction- A method of selling property in a public forum through open and competitive bidding. Also known as “public auction” or “auction 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 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.

• 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.

• 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.

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.

• 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.

• No-Sale Fee - A charge paid by the owner of property offered at a reserve auction when the property does not sell.

• On-Site Auction - An auction conducted on the premises of the property being sold.

• Opening Bid - The first bid offered by a bidder at an auction.

• Reserve - The minimum price that a seller is willing to accept for a property to be sold at auction. Also known as “reserve price”.

• Seller - Entity that has legal possession (ownership) of any interests, benefits or rights inherent to the real or personal property.

• 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. This must be resolved by the auctioneer.