Glossary of Auction Terms

Glossary Of Auction Terms

Absolute No Reserve Auction

An auction where the property is sold to the highest bidder with no limiting conditions or amount. The Seller may not bid on their own property.

“As Is Where Is“

Selling the property without warranties as to the condition or fitness of the property for a particular use.   Buyers are solely responsible for examining and judging the property and are given an opportunity to inspect the property, usually at the open house, and they may have a professional inspection at their own expense prior to bidding.

Auction

A method of selling real estate or personal property in a public forum through open and competitive bidding. 

Auction Marketing

The method of marketing real property utilizing the auction method of sale.

Auction Plan

The plan for pre-auction, auction day and post auction activities.

Auction Price

The price of a property obtained through the auction method of marketing.

Auction Value

The price that a particular property brings in open competitive bidding at public auction.

Auction With A Reserve

Also known as a Reserve Auction. An auction where the Seller and/or their Agents reserve the right to accept or decline any or all bids within a specified time. A minimum acceptable price may or may not be disclosed.

Auction Without A Reserve

See Absolute No Reserve Auction.

Auctioneer Subcontractor

The person who may conduct or call an Out Cry auction for an auction house.

Bid

A prospective Buyer’s indication or offer of a price he or she will pay to purchase property at auction that may include a Sealed Bid. Bids are usually made in standardized increments established by the auction house.

Bidder Package

Also known as the Property Information Packet that is the package of information and instructions pertaining to the property to be sold at auction and given to prospective Auction Bidders.

Broker Participation

An arrangement for third party Brokers to register potential Bidders for properties being sold at auction for a commission paid by the Seller.

Buyer’s Broker

A Real Estate Broker who represents the Buyer and is the Participating Broker as Agent for the Buyer. The auction house contracted by the Seller represents the Seller during the term of the auction contract.

Caveat Emptor

A Latin term meaning “Let the buyer beware,” a legal maxim stating the Buyer takes the risk regarding quality or condition of the property purchased.

Commission

The fee charged to the Seller by the auction house for providing services, usually a percentage of the gross selling price of the property established by the Real Estate Auction Service Agreement.

Conditions of Sale

The legal terms that govern the conduct of an auction, including acceptable methods of payment, terms, Buyer’s premium, reserve price, and any other limiting factors of an auction.

Contract

An Agreement between two or more persons or entities that creates or modifies a legal relationship.

Cooperating Broker

A Real Estate Broker who registers a prospective Buyer with the auction company in accordance with terms and conditions for that auction. The Broker is paid a commission only if their Client is the high Bidder and successfully closes the property. Also known as a Participating Broker.

Critical Path

A sequence of key tasks to be done by the auction house or designated parties on specified dates, leading to a desired goal.

Due Diligence

The responsibility of the Buyer for gathering information about the condition and legal status of the property to be sold.

Estate Sale

 An estate sale or estate auction can involve the sale of personal property and/or real estate.

Hammer Price

The price established by the last Bidder and acknowledged by the Auctioneer Subcontractor before dropping the gavel.

Listing Agreement

The Real Estate Auction Service Agreement.

Market Value

The highest price in terms of money that 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

The lowest bid accepted as the selling price.

On-Site Auction

An auction conducted on the premises of the property being sold.

Pre-Auction Offer

An offer made to purchase the property that is received no later than three days prior to the scheduled auction date and submitted to the Seller for their acceptance or rejection.  Any pre-sale resulting therefrom is treated the same as a Property sold at Auction, thus ending the sale of the property.

Preview

A specified date and time that is available for prospective Buyers to view a property.

Real Estate Auction Service Agreement

A contract executed by the auction company and the Seller that authorizes the auction company to conduct the auction and sets out the terms of the Agreement and the rights and responsibilities of each party.

Referring Broker

A Real Estate Broker who refers a potential Seller for an auction to the auction company and who earns a commission for a successful closing on the property referred.

Reserve Price

The minimum price that a Seller is willing to accept for a property to be sold at auction.  The Seller may accept or decline any and all bids or withdraw the property at any time prior to the announcement of the completion of the sale by the Auctioneer Subcontractor.

Sale Manager

The person designated by the auction company who is responsible for organizing the details of an auction. Also known as an Auction Assistant.

Sealed Bid

A method of sale utilized where confidential bids are submitted to be opened at a predetermined place and time of the auction.

Seller

 The entity that has legal possession and ownership of any interest, benefits or rights inherent to the real or personal property.

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