The following is a partial glossary of real estate auction terms developed by NAR's Real Estate Auction Committee, the National Auctioneers
Association, and the Auction Marketing Institute. While it is a real estate glossary, most of the terms apply to all types of auctions.
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.
Absentee Bidder
A
person (or entity) who does not attend the sale but submits, in advance, a written or oral bid that is the top price he or she will
pay for a given property.
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.
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 acts
for or in the place of another individual or entity by authority from them.
Appraisal
The act or process of estimating value.
"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 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.
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
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.
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 auction. Bids are usually in standardized increments established by
the auctioneer.
Bid Acknowledgment
A form executed by the high bidder confirming and acknowledging the bidder's identify, the
bid price and the description of the property. Also known as Memorandum.
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 known as ringmen, bid consultants, bid spotters, or groundsmen.
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 Rigging
The unlawful practice whereby two or more people agree not to bid against one another so as to deflate
value.
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.
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
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.
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.
Caveat Emptor
A Latin term meaning "let the buyer beware." A legal maxim stating that the buyer
takes the risk regarding quality or condition of the property purchased, unless protected by warranty.
Clerk
The person employed
by the principal auctioneer or auction firm to record what is sold and to whom and for what price.
Collusion
The unlawful practice
whereby two or more people agree not to bid against one another so as to deflate value or when the auctioneer accepts a fictitious
bid on behalf of the seller so as to manipulate or inflate the price of the property.
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.
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