Agent Auction’s Glossary of Auction Terms
We present below for you a glossary of auction terms that will help you become an auction pro. You can then proudly wear the letters “AP” on your clothing. Folks will thus know you’re an Auction Pro—or that you work for Associated Press. Or your name is Alex Porter. You’ll finally achieve that respect and admiration you’ve been seeking your entire life. Men will admire you. Women will adore you. Even your pets will be more impressed with you. Mind you, we’re not saying that the President will award you a Distinguished Civilian Medal at the White House. Then again, who knows? If we can put a man on the Moon, why couldn’t that happen, too?
The process of submitting a bid for an item when a bidder is unable to participate during the live auction. Agent Auction.com provides an AutoBid feature to bidders to set the high amount they are willing to bid on an item.
An estimate of an item’s worth, usually performed by an expert in that particular field.
Selling an item or property without warranties as to the condition and/or without guarantees of the functionality of the item/property. Buyers are solely responsible for examining and judging the property for their own protection and conduct their due diligence before submitting a bid. This also applies to “As Is,” “Where Is” or “In Its Present Condition.”
A method of selling an item or property in a public forum through open and competitive bidding. The finest endeavor to which man can aspire.
A rhythmic repetition of numbers and “filler words” spoken by an auctioneer in the process of conducting an auction.
An emotional state elicited in the course of one or more auctions that causes a bidder to deviate from an initially chosen bidding strategy.
The company operating the auction (i.e., establishing the date and time of the auction, the auction rules, determining which item(s) are to be included in the auction, registering bidders, taking payments, and delivering the goods to the winning bidders).
Auction Listing Agreement
A contract carried through by the seller and the auctioneer which authorizes the auction company to conduct the auction, sets out the terms of the agreement, and lays out the responsibilities and rights of each party. Also known as a “Listing Agreement.” The oldest listing agreement dates from 750 B.C., but some historians doubt its authenticity since it makes three references to “Kim Kardashian.”
The person conducting the actual auction. They announce the rules of the auction and the item(s) being auctioned, call and acknowledging bids made, and announce the winner. They generally will call the auction using auction chant.
An indication or offer of a price by a potential buyer that he or she agrees to pay to purchase an auction item. Bids are typically in standardized increments determined by the auctioneer. A buyer may not offer himself or herself personally as a bid. That would fall under the jurisdiction of the vice squad.
Bid Acknowledgment a.k.a. Memorandum
A form completed by the high bidder that confirms and acknowledges the bidder’s identity, the bid price, and description of the auction item. The more immature high bidders will occasionally add the phrase, “Ha ha! I won!”
The act of participating in an auction by offering to purchase an item for sale.
The Buyer’s Premium is a fee paid by the winning bidder at auction. The Buyer’s Premium is disclosed prior to an auction and is generally identified as a percentage of high bid price. The High Bid Price + Buyer’s Premium = Total Sale Price.
A price that, if accepted by a bidder, immediately ends the auction and awards the item to him/her (an example is eBay’s BuyItNow feature).
“Caveat Emptor” a.k.a. Bidder Due Diligence
A term meaning that it is the buyer’s purview to do their own research regarding the item or property up for auction, absolving all others involved regarding the quality or condition of the item or property purchase, unless protected by warranty. Impressive in that it only takes two words of Latin to mean “Hey, buddy, don’t blame us that you didn’t do your research!”
Conditions of Sale
The legal terms that flatly state the conduct of an auction, including the acceptable forms of payment, terms of sale, buyer’s premiums, possession, reserves, and any other limiting factors of an auction. This is typically included in published advertising of the auction and/or announced by the auctioneer prior to the start of the auction. One good indication that it’s not a professional auction is if the conditions of sale are written in Pig Latin.
The gathering of information regarding the condition, functionality, and legal status of the assets to be sold. Plus, it sounds way more impressive than “research.”
Price set by the last bidder and acknowledged by the auctioneer before dropping the gavel or hammer. Not to be confused with the “Hammer Time” expression in the 1990 hit song, “U Can’t Touch This,” by rap singer, M.C. Hammer.
A minimum amount by which a new bid must exceed the previous bid. An auctioneer may decrease the increment when it appears that bidding on an item may stop, so as to get a higher hammer price.
The lowest increment that an auctioneer will accept as a bid. These are always stated in the offering brochure, advertisements, and is announced prior to each item’s auction. Placing a bid below the minimum bid is a proven sign of mental instability.
A group of properties or items offered through a common promotional campaign. The items up for auction may be owned by one or multiple sellers. If the property is owned by North Korean Supreme Leader Kim Jong-un, be very careful what you say about it or about him.
Properties or items owned by many sellers auctioned in a single event, typically offered through a common promotional campaign. Feel free to impress people now by informing them that you know exactly what a multi-seller auction is.
(a.k.a. “absolute auction”) – an auction in which there is no minimum acceptable price; so long as the winning bid is at least the minimum bid, the seller must honor the sale.
The first bid placed on a particular lot. The opening bid must be at least the minimum bid, but may be higher (e.g., a bidder may shout out a considerably larger bid than minimum, to discourage other bidders from bidding).
To bid higher than another bidder.
The lowest price that a seller is willing to accept for a property or item to be sold at auction. Why isn’t it called “Lowest Price”? Probably because “Reserve Price” sounds classier. Think “Sanitation Engineer” vs. “Garbage Man.”
Reserve Auction a.k.a. Auction With Reserve
An auction in which the seller reserves the right to accept or decline any and all bids that do not meet the seller’s reserve price. That’s a lot of power for the seller, but we feel our sellers can handle it and won’t go power-mad.
The person or entity that has legal possession (ownership) of any interests, benefits, or rights inherent to the property/item. You might think this is obvious, but we really enjoy any opportunity to use the word “inherent” in a sentence.