Glossary of Terms

A

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 of absentee bids are unique to each auction company.

Absolute Auction – An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. The seller may not bid personally or through an agent. Also known as an auction without reserve.

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

AIC – Auctioneer In Charge. The person designated by the auction company who is responsible for organizing the details of an auction.

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.

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 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 with Reserve – An auction in which the seller or his/her 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. Also known as auction subject to confirmation and reserve 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.

B

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 he or she will pay to purchase property at an auction. Bids are usually in standardized increments established by the auctioneer.

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 referred to as ground men.

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 Number – The number issued to each person who registers at an auction.

Bidder’s Choice – A method of sale whereby the successful high bidder wins the right to choose a property or properties from a grouping of similar or like-kind properties. After the high bidder’s selection, the property is deleted from the group, and the second round of bidding commences, with the high bidder in round two choosing a property, which is then deleted from the group and so on, until all properties are sold.

Bookkeeper or Clerk – The person who is responsible for the accounting and paperwork at an auction sale.

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.

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.

C

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

Closing – Time and place for the exchange of money for ownership. Generally handled by a title company or an attorney.

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.

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

E

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.

L

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.

M

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.

N

National Auctioneers Association – An 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.

O

On-Site Auction – An auction conducted on the premises of the property being sold. The majority of properties are sold on site.

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

On-Line Auction – An auction in which participants bid on property via the internet

P

Preview – Specified date and time property is available for prospective buyer viewing and audits. Also known as open house or inspection.

R

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 property to an auction company.

Regroup – A process used 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.

S

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

T

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

Terms – The legal terms that govern the conduct of an auction, including acceptable methods of payment, terms, buyer’s premiums, possession, reserve and any other limiting factors of an auction.

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 an auction by a trustee.