Definitions

Absentee Bid

A procedure which 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 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.

Absolute Auction

An auction where the property is sold to the highest bidder with no limiting conditions nor pre-set purchase amount.

Advertising 

Non-personal, paid communication such as newspaper, radio, direct mail and TV directed toward the general public or, in some cases, specific prospective client groups to provide information about the time, place, contents, and arrangements of an auction.

Agent

A person who acts for or in the place of another individual or entity by authority for them.

Appraisal

The act or process of estimating value.

"As Is"

Selling the property with no warranty as to its condition. Buyers must examine, if they wish, prior to bidding.

Auction

A method of selling real estate in a public forum through open and competitive bidding.  Also referred to as: public auction, auction sale or sale.

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 Marketing

The method of marketing real property utilizing the auction method of sale.

Auction Plan

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

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 in open 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. An auction with no reserve is an absolute auction.

Auction Without Reserve

See "Absolute Auction".

Auctioneer

The person whom the seller engages to direct, conduct, or be responsible for a sale at auction.  This person may or may not actually call or cry the auction.

Ballroom Auction

An auction of one or more properties held in a meeting room facility, rather than at the property.

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 Acknowledgement

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 Caller

The person who actually "calls" the auctioned property, recognizes bidders and acknowledges the highest bidder. May also be called the auctioneer. He may have assistants called 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.

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.  Sometimes called a bidder packet, property information packet, or due diligence packet.

Broker Participation

An arrangement for third-party brokers to register potential bidders for properties being sold at auction for a commission paid by the owner of the property or the auction firm.

Bidder's Choice

The successful high bidder may win the right to choose a property or properties from a group of similar properties, This cycle repeats with high bidders selecting their group until all properties are sold.

Buyer's Broker

A real estate broker who represents the buyer and, as the agent of the buyer, is normally paid for his/her services by the buyer.

Buyer's Premium

An advertised percentage of the highest bids to determine the total purchase prices.

Caravan Auction

A series of on site auctions conducted by a team of professionals and advertised through a common promotional campaign. The auction team may sell the group of properties at one or many property sites, depending on the concentration and distribution of the properties across a geographic area.

Carrying Charges

The costs involved in holding a property which is intended to produce income (either by sale or rent) but has not yet do so, i.e., insurance, taxes, maintenance, management.

Caveat Emptor

A Latin term meaning "let the buyer beware."  A legal maxim stating that the buyer takes a 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.

Clerk

An individual employed by the auction firm to record what is sold, to whom, and at what price.

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. 

Contract

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

Cooperating Broker

A real estate broker who registers a prospective buyer with the auction company, in accordance with the terms and conditions for that auction.  The broker is paid a commission only if his prospect is the high bidder and successfully closes on the property.  Also known as Participating Broker.

Due Diligence

Gathering information about the condition of a property.

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 his/her listing agreement.

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.

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 auction.

Minimum Opening Bid

The lowest acceptable amount at which the bidding must commence.

Multi-Property Auction

A group of properties offered through a common promotional campaign owned by one seller or multiple sellers.

Multi-Seller Auction

Properties offered by many sellers, offered through a single promotional campaign.

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 a property is available for prospective buyers viewing and audits. Also known as "Open House" or "Inspection".

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.

Regroup

A professional in real estate auctions where a bidder has the opportunity to combine several parcels of land previously selected by other bidders, thereby creating one larger parcel out of several smaller parcels. This process is often used in conjunction with bidder's choice.

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 reject any and all bids, or to withdraw the property at anytime prior to the announcement of the completion of sale by the auctioneer.

Sealed Bid

A method of sale utilized where confidential bids are submitted to be opened at a predetermined place and time.  Not a true auction in that it does not allow for reaction from the competitive market place.

Seller

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

Sale Manager

The person designated by the auction company who is responsible for organizing the details of an auction.

Subject to Confirmation

See Reserve Auction.

Tax Sale

Public sale of property at auction by governmental authority, due to nonpayment of property taxes.

Terms

The period of time that an arrangement is in effect.

Terms and Conditions

The printed rules of the auction and certain aspects of the purchase and 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.

Trustee's Sale

A sale at auction by a trustee.

Upset Price

Commonly known as the reserve price.

Withdrawal

Failure to reach the reserve price or insufficient bidding.