Glossary

  • 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.

  • Accounting of Sale

    A report issued to the seller by the auctioneer or auction company detailing the financial aspects of the auction.

  • Agent

    A person who acts on behalf of another individual or entity.

  • Appraisal

    The act or process of estimating value.

  • 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 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 Marketer

    An individual who contracts with sellers for the auction method of marketing property. In the case of real property, the individual may not actually conduct the sale but is directly responsible for all aspects of marketing the property.

  • Auction Marketing

    The method of marketing assets utilizing the auction method of sale.

  • Auction Plan

    The plan for pre-auction, auction-day and post-auction activities.

  • Auction Price

    The price of a property obtained through the auction method of marketing

  • Auction Subject to Confirmation

    (See “Reserve Auction”)

  • Auction Value

    The price that a particular property brings via competitive bidding at public auction.

  • 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.

  • Auction Without Reserve

    (See “Absolute Auction”)

  • 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 facility.

  • 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 buyers who are not paying with currency at auctions.

  • 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.

  • Bid Acknowledgment

    A form executed by the high bidder confirming and acknowledging the bidder’s identity, the bid price and the description of the property. Also known as “Memorandum.”

  • Bid Assistants

    Individuals of a live auction team whose primary responsibility is to accurately interpret and effectively communicate buyer participation to their auctioneer. They should also be qualified to assist prospective bidders with the necessary information to make a better informed buying decision. Also known as “ringmen”, “bid spotters” or “groundsmen.”

  • 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.

  • Bid Rigging

    The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value. See “Collusion”.

  • Bidder Number

    The number issued to each person who registers 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. Also referred to as “bidder packet” or “due diligence packet.”

  • Buyer’s Broker

    A real estate broker who represents the buyer and, as the agent of the buyer.

  • 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.

  • Caravan Auctions

    A series of on-site auctions advertised through a common promotional campaign.

  • Carrying Charges

    The costs involved in holding a property that is intended to produce income (either by sale or rent) but has not yet done so, i.e., insurance, taxes, maintenance, management. Also known as “holding costs”.

  • 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, unless protected by warranty.

  • Collusion

    The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value or when the auctioneer accepts a fictitious bid on behalf of the seller so as to manipulate or inflate the price of the property.

  • 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”.

  • Contract

    An agreement between two or more persons or entities which creates or modifies a legal relationship.

    Sequence of key tasks to be done by auction contractor or other designated parties on specified dates, leading to desired goals.

  • Dual Agency

    The representation of opposing principals (buyers and seller) at the same time.

  • Due Diligence

    The process of gathering information about the condition and legal status of assets to be sold.

  • Hammer Price

    Price established by the highest bidder and acknowledged by the auctioneer before dropping the hammer or gavel.

  • Listing Agreement

    See “Auction Listing Agreement”.

  • Listing Broker

    A real estate broker who has a listing on a property and cooperates with the auction company by allowing the auction agreement to supersede their listing agreement.

  • 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.

  • Memorandum

    Also referred to as a “Bidder Acknowledgment,” or “Broker Acknowledgment,” the memorandum is signed by those parties either on the auction floor or in the contract room.

  • 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.

  • 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.

  • Multiple Listing Services (MLS)

    The MLS is a suite of services that enables brokers to establish contractual offers of compensation (among brokers); facilitates cooperation with other broker participants; accumulates and disseminates information to enable appraisals; and is a facility for the orderly correlation and dissemination of property listing information to better serve broker’s clients, customers and the public.

  • 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.

  • Participating Broker

    See “Cooperating Broker”.

  • Preview

    Specified date and time property is available for prospective buyer viewing and audits. Also known as “Open House” or “Inspection”.

  • Real Estate (RE)

    Real estate, also known as real property, is a legal term that encompasses land along with improvements to the land, such as buildings, fences, wells and other site improvements that are fixed in location — immovable.

  • Referring Broker

    A real estate broker who does not have a listing on a property but refers the auction company to a potential seller for an auction. Usually earns a flat fee commission for referring product to an auction company.

  • 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.

  • 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. This must be resolved by the auctioneer.

  • Uniform Commercial Code (UCC)

    The UCC, first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all U.S. states.

  • Withdrawal

    Failure to reach the reserve price or insufficient bidding