Glossary of Terms

The following Glossary presents some of the most common terms used at, and in the discussion of auctions. Becoming familiar with the with the auction process.

Absentee Bid	Allows a person to bid without attending the sale. The person submits, in advance, a written or oral bid that is the top price he or she will pay for a given property. Only the auctioneer knows this amount, and bids on behalf of the absentee bidder until the bidder either takes the item or his highest price is exceeded.
Absolute Auction	An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount (such as reserve bids or sellers confirmation).
Accounting of Sale	A report issued to the seller by the auctioneer detailing the financial aspects of the auction.
Agent	A person who acts for or in the place of another individual or entity by authority from them (e.g., to place bids on behalf of another).
Appraisal	The act or process of estimating value. Some auctioneers and auction houses offer extensive appraisal services even if the client is not intending that the appraised items will be sold at auction.
"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.
Auction	A method of selling in a public forum through open and competitive bidding. Also referred to as a public auction or auction sale.
Auction Block	The podium or 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 between the auctioneer and the seller which authorizes the auctioneer to sell the item(s) and sets out all of the terms & conditions.
Auction Subject to Confirmation	See "Reserve Auction"
Auction With Reserve	An auction in which the seller reserves the right to accept or decline any and all bids. A minimum acceptable price may or may not be disclosed.
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 he or she will pay to purchase an item at auction. Bids are usually in standardized increments established by the auctioneer.
Bid Acknowledgment	A form executed by the high bidder confirming and acknowledging the bidder's identify, the bid price and the description of the property. Also known as Memorandum.
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, or groundsmen.
Bid Rigging	The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value.
Bidder Number	The number issued to each person who registers at an auction.
Buyer's Premium	An advertised percentage of the high bid or a 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(ies) available for sale at public auction, often including photographs, property descriptions, and the terms and conditions of the sale.
Caveat Emptor	A Latin term meaning "let the buyer beware." A legal maxim stating that the buyer takes the risk regarding quality or condition of the property purchased.
Commission	The fee charged to the seller by the auctioneer for providing services, usually a percentage of the gross selling price of the property.
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.
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.
Hammer Price	Price established by the last 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.
Minimum Opening Bid	The lowest acceptable amount at which the bidding must commence.
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 and time property is available for buyer viewing & examination of items to be offered at the auction.
Reserve	The minimum price that a seller is willing to accept for a property to be sold at auction. Also known as the 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. See also Auction With Reserve.
Subject to Confirmation	See "Reserve Auction"
Tax Sale	Public sale of property at auction by governmental authority, due to nonpayment of property taxes.
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.
Upset Price	Commonly known as the reserve price.
Withdrawal	Failure to reach the reserve price or insufficient bidding.