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Glossary of Auction Terms




A

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.

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.”

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

Appraisal: The act or process of estimating value.

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.

As Is: Also known as "as is, where is" and "in its present condition." Typically, this is a sign that no return privileges will be granted.

Auction Marketing: The method of marketing assets utilizing the auction method of sale.

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.

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.

Auto Progressive Bidding: This feature of our Smart Auctions technology allows a bidder to submit their highest possible bid for a listing in an auction, prior to the start of the auction. Then, once the auction begins, if any competitive bids are submitted against the bidder’s lowest bid, the SmartAuctions technology will incrementally increase the bid so that the bidder remains the highest bidder. If another customer submits a bid higher than that the first bidder’s established maximum bid, the first bidder will lose the listing. The major benefit to auto progressive bidding is that, at the end of an auction, the highest bid, even if it is not the bidder’s maximum bid, will purchase the listed equipment, allowing the bidder to purchase the item as the lowest possible price the seller is willing to accept. For more information, please click here.



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 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 Assistant: 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 History: A historical list of all the bids made on a particular auction during or after the auction.

Bid Increment: The standardized amount an item increases in price after each new bid. The auction service sets the increment, which rises according to the present high bid value of an item.

Bid Retraction: A bidder’s legitimate cancellation of a bid on an item during an online auction.

Bid Rigging: Fraudulent bidding by an associate of the seller in order to inflate the price of an item. Also known as shilling and collusion.

Bid Shielding: Posting extremely high bids to protect the lower bid of an earlier bidder, usually in cahoots with the bidder who placed the shielding bid.

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.”

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

Buyer’s Premium: An additional service charge, for which the buyer is responsible, may be added to the price of assets. If so, this will be indicated in the Notice to Purchasers, auction description, asset detail page, or other clearly- marked area.

Bid Cancellation: The cancellation of a bid by a seller. During online auctions, sellers can cancel a bid if they feel uncomfortable about completing a transaction with a particular bidder.

Brochure: A publication advertising and describing the property available for sale at public auction, often including photographs, property descriptions, and the terms and conditions of the sale. A brochure is used as a marketing piece to garner attention for the auction.



C

Catalog: The list of items up for sale at an auction event sorted by lot or listing number, complete with detailed property descriptions, important information for each item, and photographs.

Clerk: The person employed by the principal auctioneer or auction firm to record what is sold and to whom and for what price.

Caveat Emptor: The Latin phrase meaning "let the buyer beware."

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.

Consignee: The auctioneer or auction house operator to whom goods are entrusted by another (consignor) for sale at auction.

Consigno: The person or authorized agent or entity that consigns goods to an auctioneer. The consignor is usually the seller.

Contract: An agreement between two or more persons or entities which create or modify a legal relationship.

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



D

Deadbeats: High bidders who fail to pay for the item they won.

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

Dutch Auction: This is an auction in which the seller lists multiple quantities of an identical item. With multiple items up for sale, multiple bidders can win. Also, one bidder can try to buy more than one quantity. All winning bidders pay only the lowest successful winning bid amount.



E

Escrow: Money held in trust by a third party until the seller makes delivery of merchandise to the buyer.


H

Hammer Price: Price established by the last bidder and acknowledged by the auctioneer before dropping the hammer or gavel.


L

Lien: An adverse claim or charge against an item when that item is being used as collateral for a debt.

Listing: An item that will be up for sale in an auction. A listing usually has an associated listing number that aids in identifying the property before, during, and after the auction.

Lot: For online (non-auctioneer) auctions, it is best described as a single asset or a group of assets sold as a single unit for one price. For webcast auctions conducted by an auctioneer, a lot can be described as above OR as one price, with a minimum purchase quantity. Listen to the auctioneer's instructions to be sure.



M

Market Value: The highest price a property will bring on the open market.

Maximum Bid: The highest price a buyer will pay for an item, submitted in confidence to an online auction service's automated bidding system to facilitate proxy bidding.

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 Opening Bid: The mandatory starting bid for a given auction, set by the seller at the time of listing.

Multi-Seller Auction: Properties owned by multiple sellers, offered through a common promotional campaign and auctioned in a single event.



N

NR: Short for "no reserve." This notation is included in the item description line to indicate that the auction has no reserve price specified.


O

Onsite Auction: An auction conducted on the premises of the property being sold.

Opening Bid: The seller's opening bid, which sets the opening price.

Outbid: To submit a maximum bid that is higher than another buyer's maximum bid.



P

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

Proxy Bid: A method of bidding in which the computer automatically places bids for you at the lowest increment up to a maximum bid you have set.



R

Registered User: A person who has registered as a member of an online auction service. All online auction services require registration prior to buying and selling.

Relisting: The relisting of an item by a seller after it has not received any bids or met its reserve price.

Reserve Auction: This is an auction in which the item for sale has a reserve price. The reserve price is the lowest price at which a seller is willing to sell an item. Although the reserve price is not listed per se (the auction posting will be marked as "reserve met"), it can be extrapolated when a bidder bids at or above the reserve price. The high bid will automatically be elevated to the reserve price, providing the current high bidder with what the seller would agree to sell at.

Reserve Price: The minimum price a seller will accept for an item to be sold at auction. This amount is never formally disclosed.



S

S&H Charges: Shipping and handling charges.

Sealed Bid: A method of sale whereby 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 marketplace.

Secondary Market: The buyer market for secondhand goods. Online auctions serve the secondary market.

Shilling: Fraudulent bidding by the seller (using an alternate registration) or an associate of the seller in order to inflate the price of an item. Also known as bid rigging and collusion.

Sniping: Outbidding other buyers in the closing minutes or seconds of an auction.

Starting Price: The mandatory starting bid for a given auction set by the seller at the time of listing.

SmartAuctions™: (Matt to write a new definition for this term)

Straight Auction: Also referred to as an absolute auction, this is an auction in which there is only one item up for sale, and there is no reserve price. The seller sets the opening bid and must respect the final price at the end of the auction.



T

Terms of Service (TOS): A legally binding agreement that outlines an auction site's operating policies. All registered users must agree to a site's terms before using the service

Tie Bids: When two or more bidders bid exactly the same amount at the same time. This must be resolved by the auctioneer.

Total Bid: The total amount of a bid placed including buyer's premium.



Y

Yankee auction: Each winning bidder pays his or her exact high bid.





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