The following is a glossary of the most commonly used real estate auction terms. It was taken from a list of terms developed by the National Association of Realtors Real Estate Auction Committee, the National Auctioneers Association, and the Auction Marketing Institute.
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 another individual or entity by authority from them.
"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 real estate in a public forum through open and competitive bidding. Also referred to as: public auction, auction sale or sale.
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 which 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. 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.
AUCTION WITHOUT RESERVE
See Absolute Auction
AUCTIONEER
The person who actually "calls," "cries†or "auctions" the property at an auction, recognizing bidders and acknowledging the highest bidder.
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 CONFIRMATION
A form executed by the high bidder confirming and acknowledging the bidder's identity, the bid price and the description of the property.
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 or due diligence package.
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. Also referred to as Broker Cooperation.
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 high bid or flat fee added to the high bid to determine the total contract price to be paid by the buyer.
CARAVAN AUCTIONS
A series of on site auctions advertised through a common promotional campaign.
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, management.
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.
CERTIFIED AUCTIONEERS EDUCATION INSTITUTE, INC.
Now known as the Auction Marketing Institute, Inc. See Auction Marketing Institute, Inc.
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. Also referred to as Terms and Conditions.
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 a participating broker.
DUE DILIGENCE
The process of gathering information about the condition and legal status of assets to be sold.
FLOORMEN
Professional auctioneers who are positioned throughout the auction floor to assist the auctioneer, bid spotters and assist prospective bidders with information to help them in their buying decision.
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 auctions.
MINIMUM OPENING BID
The lowest acceptable amount at which the bidding must commence.
OPENING BID
The first bid offered by a bidder at an auction. Also referred to as Starting Bid.
PREVIEW
Specified date and time property is available for prospective buyer viewing and audits. Also known as Open House or Inspection.
PURCHASE CONTRACT
An purchase and sale agreement between buyer and seller executed at the conclusion of the auction
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 decline any and all bids or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer. See also Auction With Reserve.
SALE MANAGER
The person designated by the auction company who is responsible for organizing the details of an auction. Also known as project manager.
SEALED BID
A method of sale utilized where confidential bids are submitted to be opened at a predetermined place and time.
SELLER
Entity that has legal possession, (ownership) of any interests, benefits or rights inherent to the real or personal property.
TAX SALE
Public sale of property at auction by governmental authority, due to nonpayment of property taxes.
TERMS AND CONDITIONS
The 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.
TRUSTEE'S SALE
A sale at auction by a trustee.
WITHDRAWAL
Failure to reach the reserve price or insufficient bidding. Also referred to as Close the Bidding.
