Auction Terminology
Without-Reserve Sale (ABSOLUTE): The seller agrees to sell the property to the highest bidder, regardless of price.
Published Reserve Sale (MINIMUM BID): The property will be sold at any price equal to or greater than the published reserve.
With-Reserve, No Stated Price: The seller can accept or reject the highest bid either at the auction or within a specified number of days after the auction.
Sealed-Bid: A type of auction process in which all bidders simultaneously submit sealed bids to the auctioneer, so that no bidder knows how much the other auction participants have bid. The highest bidder is usually, but not always, declared the winner of the bidding process. In a sealed-bid auction, bidders can only submit one bid and therefore cannot adjust their bids based on competing bids. This sets it apart from the more common auction, also known as the open ascending price auction, where participants can make multiple bids and bid against each other. A sealed-bid auction process may also not be as transparent as an open outcry auction.
Live Auction (Webcast): Allows bidders who attend the live auction onsite – at a predetermined location where the auctioneer will conduct the sale – to participate with bidders across the state and country. Participants must preregister, comply with the predetermined terms of sale, deposit their earnest money and provide the auctioneer with the ability to execute the purchase agreement in the event they are the successful bidder.
Buyer’s Premium: An additional service charge, for which the buyer is responsible, that 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 another clearly marked area.
Terms and Conditions of Sale: The legal terms set forth for an auction which includes condition of property to be sold, acceptable payment terms, buyer’s premiums, possession of property, absolute, published reserve or reserve auction and any other terms of the sale.
Bid Increments: Conduct of the auction and increments of bidding are at the direction and discretion of the auctioneer. Seller and Auctioneer reserve the right to deny any person the ability to bid and/or access to the online bidding platform for any reason.
Bidder Package: The package of information, due diligence, terms, and instructions obtained by prospective bidders for a given property auction.
Preview: Specified date and time when a property is available for prospective buyer viewing and inspection.
Collusion: The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value or when a fictitious buyer (a.k.a. shills, puffers, by-bidders) bids on behalf of the seller so as to manipulate or inflate the price of the property.
National Auctioneers Association: An association of individual auctioneers committed to professionalism in the auction profession. The NAA maintains a code of ethics for member auctioneers, and promotes the enactment of just and reasonable laws, ordinances, and regulations governing auctions. The NAA also conducts educational seminars and promotes the auction method of marketing in both the private sector and among government agencies.
Tie Bids: When more than one bidder bids the same amount at the same time. Tie bids must be resolved by the auctioneer. However, this is generally not an issue as the auctioneer scans the crowd during the bidding and acknowledges the first bidder seen.
Bidder’s Choice/Grouping: 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. The high bidder in round two chooses a property, which is then deleted from the group and so on, until all properties are sold.
Proxy Bid/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/her representative. The particular rules and procedures of absentee bids are unique to each auction company. To keep the proxy bid process a safe place for buyers, live auctioneers masks the absentee bid amount. Other bidders cannot view your absentee bids in the “Other Bids” section. All bids are kept confidential from the auction house and other bidders.