Auction Terminology

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 attends an auction and bids fro someone else who is actually the purchaser.

APPRAISAL. An estimate, for a fee, of what real or personal property might bring if sold at auction or, if used for insurance purposes, what it would cost to replace. Can either be a verbal opinion or a written document, although only the latter is valid for legal purposes such as probate.

“AS IS”. The “Caveat emptor” (let the buyer beware) phrase of the auction business. Most items sold at auction are sold “as is” in that the buyer is responsible for examining and judging the property for his/her own protection and the auctioneer does not offer warranties.

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 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.

AUCTIONEER. 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.

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.

BIDDING LIMIT. The top price the bidder sets in his/her own mind that he/she will be willing to pay for a given property.

BIDDER NUMBER. The number issued to each person who registers at an auction.

BIDDING PADDLE. A paddle-shaped device with a number printed on it that is the same number assigned to the potential bidder when he/she registered for the auction. The participant bids by raising his/her paddle.

BUYER’S PREMIUM (OR FEE). An advertised percentage (usually 10%, but varies) added to the purchase price (“hammer price”). Paid by the buyer for services of the auctioneer, previews and inspection.

CASHIER. The employee of the principle auctioneer or auction firm who, working from the auction clerk’s records, collects all the proceeds from an auction, disperses the receipts, and submits a complete report of the auction to the seller.

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.

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

CHOICE. The privilege extended the successful bidder to select, for the price he/she bid, one or more of the identical or similar items from the group of such items that has been presented at auction.

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 the sale, including acceptable methods of payment, terms, buyer’s premiums, delivery, storage, reserves, etc. Usually included in published advertisements or announced by the auctioneer prior to the start of the auction.

CONSIGNMENTS. Property turned over to an auctioneer by its owner to be sold on a commission basis and usually under specific conditions.

ESTATE SALE. The sale of property left by a person at his or her death. May be sold “on-site,” at an auction house/gallery, or at a location that allows proper display and bidder crowds.

GALLERY (“Auction Arena” or “Auction Center”). The permanent place of business where the agent, or auctioneer, displays and sells property that is usually on consignment. Although previously used only to describe display areas for works of art, now often used interchangeably with “auction house.”

HAMMER PRICE. The price established by the last bidder and acknowledged by the auctioneer before dropping the hammer or gavel.

LAYOUT. The sequence in which property will be sold at auction, allowing for logical groupings of similar items and stimulation of bidder interest.

LOT. A property or group of properties that may be assigned a single number in a catalog and offered at one time at the sale.

PROFESSIONAL RINGMASTERS. Employees of the auctioneer who are usually positioned through the crowd of bidders on the “auction floor” to help the auctioneer spot bidders and to help control and influence the crowd. Ringmen often wear special attire (caps, vests, etc.) so they can be identified easily.

RUNNERS. An auction company employee who delivers lots (purchased merchandise) to successful bidders, runs errands and relay bids to the auctioneer.

SPOTTERS. Auction company employees or volunteers who assist the auctioneer by observing bids and relaying them to him/her.

TIE BIDS. When two or more bidders bid exactly the same amount at the same time and must be resolved by the auctioneer who may try to get one bidder to move higher or re-auction the property.

WITHDRAWAL. The removal of lots from an auction due to damage, specifications from the seller, failure to reach the reserve price, or insufficient bidding.