AUCTION TERMS

The following is a glossary of auction terms developed by the National Auctioneers Association and the Auction Marketing Institute.

• 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 his representative. The particular rules and procedures of absentee bids are unique to each auction company.
• Absentee Bidder
  A person (or entity) who does not attend the sale but submits, in advance, a written or oral bid that is the top price he or she will pay for a given property.
• Appraisal
  The act or process of estimating value.
• Apprentice Auctioneer
  An auctioneer who is in training, operating under the supervision of a licensed or experienced auctioneer.
• Auction
  A method of selling property in a public forum through open and competitive bidding. Also referred to as: public auction, auction sale or 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 that authorizes the auctioneer to conduct the auction and sets out the terms of the agreement and the rights and responsibilities of each party.
• 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.
• 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 he or she will 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 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 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.
• 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.
• 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.
• Clerk
  The person employed by the principal auctioneer or auction firm to record what is sold and to whom and for what price.
• 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.
• 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 PricePrice established by the last bidder and acknowledged by the auctioneer before dropping the hammer or gavel.
• Market Value The highest price in terms of money which 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.
• National Auctioneers AssociationAn association of individual auctioneers united to promote the mutual interests of its members; formulate and maintain ethical standards for the auction profession; promote the enactment of just and reasonable laws, ordinances and regulations affecting auction selling; make the public more aware of the advantages of auction selling; and generally improve the business conditions affecting the auction profession.
• 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.
• PreviewSpecified date and time property is available for prospective buyer viewing and audits. Also known as Open House or Inspection.
• Sale Manager The person designated by the auction company who is responsible for organizing the details of an auction. Also known as project manager.
• Seller Entity that has legal possession, (ownership) of any interests, benefits or rights inherent to the real or personal property.
• Terms and ConditionsThe 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.