Auction Terminology Glossary

Absentee Bid

An auction bid placed by someone who is unable to attend or does not wish to attend an auction. A person may place an absentee bid by submitting a form in person or online, which usually allows an auction staff member or the auctioneer to bid on their behalf, not exceeding the highest amount of the absentee bid. Alternatively, they are called “commission,” “order,” “written,” or “proxy” bids.

After-Sale Offers

Bids placed after an auction has ended on items that did not sell.

Appraisal

An appraisal is a formal evaluation of an item’s fair market value or insurance value, typically completed by an appraiser. An appraisal is performed primarily by comparing the item with recent sale prices for similar objects and analyzing its condition. An appraisal represents the appraiser’s best judgment, but it is not fixed.

“As-Is”

The term “as-is” refers to an item that is being sold in its current condition. In this case, the buyer is purchasing the product as-is, and returns are typically not permitted.

Auctioneer

The auctioneer oversees and runs an auction. An auctioneer should be licensed, and the most recommended ones have received accreditation and hold membership in the National Auctioneers Association.

Auction Marketing

The process of announcing upcoming auctions to potential bidders is known as auction marketing. Marketing an auction is critical to its success, since auctions thrive on competitive bidding. To attract bidders, your marketing campaign will need to be both compelling and distributed properly, so you can attract potential buyers. Success and failure in this area can have a lot to do with the auction’s outcome.

Auction Status

The auction status contains information about the current progress of the item being auctioned. Usually, this includes up-to-date bidding information. Status can also indicate whether an auction is still ongoing or has ended.

Asset Location

The asset location indicates where an item up for auction is currently located. This will typically be an indication of where the buyer will pick up the item or where it’s shipped from. The location of an asset is often taken into account when determining the amount someone is willing to bid.

Bid

At an auction, a bid is essentially what a prospective buyer offers as a price they are willing to pay for the item. In most cases, bids will be raised in standard increments until a winning price is determined.

Bid History

The bid history provides information on all the bids placed during or at the close of the auction. Bid history can be helpful when estimating the price of similar items in future auctions.

Bid Extension

Certain items may attract more interest than others. An auctioneer may choose to allow a bid extension in this situation, which means they can allow the bidding to continue in 5-minute increments after the original scheduled end time. This starts when a new bid is placed within the last 5 minutes of the original time and extended for 5 minutes each time a new bid is offered.

Bid Increments

A product’s price will continue to rise until prospective buyers stop bidding. The amount by which the auctioneer will increase the bids is called a “bid increment.” Most auctioneers use increments of 10 percent of the last price rounded up, though they can choose any increment they like. In the case of a live auction, the new bid price will be announced. If the auction is online, then it will appear in a prompt on the webpage. It is important to note that bid increments can also happen mid-auction based on the bidding levels and number of bids.

Bid Sniping

The term “bid sniping” is used in online auction platforms that are timed. It involves placing a bid that most likely will surpass the current bid, but just moments before the auction ends. The practice is used to prevent the current bidder from raising the price by placing another bid.

BIN (Buy It Now Pricing)

In a BIN listing, the seller specifies a price so that the item can be purchased immediately. If no one chooses to “Buy it Now,” the auction will continue. The BIN is typically set at the seller’s desired sale price. Buyers can also choose this option during the auction, at which point the bidding will stop and the purchase is complete.

Buyer’s Premium

A buyer’s premium is an additional amount added to the final bid in order to determine the final purchase price of the item. A percentage represents a buyer’s premium. There can be variations in the percentage, but it will always be announced at the beginning.

Cataloging

Cataloging involves grouping items into lots or groups. Once sorted, the item will need to have a description and photographs. The end piece is a comprehensive catalog of what will be up for auction, which the bidders can look at prior to the auction commencing. This will give buyers the opportunity to decide what to bid on, so the more detailed the cataloging, the better.

Escrow

Upon completion of an auction, the buyer will not pay the seller directly. The money for the bid, along with the buyer’s premium, is instead held in escrow. Escrow is money that is held until a transfer is completed. An escrow company holds the funds in the case of an auction until the buyer receives the item and approves it.

Event Category

The event category is part of the listing process. When listing an auction, you will need to choose from one of the available event categories, for example, “online auction” or “live auction.”

Fair Market Value

A fair market value is the value that appraisers assign to something when determining its value. Simply put, it means that the price an item is sold for should be close to what a buyer is willing to pay for it. Since auctions use a bidding process to determine how much buyers are willing to pay, the sale price of an item at an auction could be considered fair market value.

Hammer Price

Hammer price refers to the last bid placed immediately before the auctioneer’s hammer fell, closing the bidding. Combined with the buyer’s premium, it is considered the winning bid.

Invoice

Upon winning a bid, you receive an invoice for the item you won, which contains the winning bid price along with any fees.

Inspection

Prospective buyers can inspect the property before the auction in some auctions. Typically, inspectable property is available one hour before the auction will begin or by appointment with the auctioneer in the days leading up to the auction date.

Live Auction

Live auctions are held in a salesroom or auction house in real time. The bidders are a live audience, though oftentimes, remote bidders are allowed to participate by phone.

Lot

A lot is an item or group of items up for bid. View our lots here. 

Lot Description

A detailed description of the lot will be included in the catalog, and it will include information on each item within the lot.

Lot Title

Lot titles will appear above lot descriptions in catalogs and on auction pages; they contain a summary of the item or group of items for sale. This will be how the item is referred to during the auction process.

Minimum Bid

Sellers may list their items with a minimum bid attached to them. This will be the lowest offer the seller will accept. This amount is often not disclosed, and while bidding will start below it and a seller can accept a bid below it, they also have the right to pull the item if it does not meet the minimum.

No Reserve Auction

A “no reserve” auction means there is no minimum bid requirement for the items offered during the auction.

Online Auction

In the virtual marketplace, online auctions are sales sites that allow bidding, where buyers and sellers exchange goods. Due to their amount of traffic and wide range of items for sale, they are often a popular choice for selling and buying.

Opening Bid

The opening bid is the amount at which the auctioneer will start the bidding. In most cases, the opening bid for an item will be determined by the value of the item as well as the potential interest in the item. In many cases, the value is what the opening bid will be.

Outbid

A person who is outbid means that another party has placed a higher offer than theirs.

Product Categories

Product categories are groups of like items that will be auctioned off together. When setting up an online auction, you will need to determine which product category you would like your item listed under.

Proxy Bid

Using a proxy bid, you can place bids in the lowest possible increments up to your desired maximum price without needing to place every bid individually. You will need to determine and enter the highest price that you are willing to pay, and the proxy bidding will allow you to keep bidding against new bids up to the point that your maximum is met.

Removal

In auctions, the term “removal” can have two meanings. It can refer to a listing being removed from the auction before the auction begins. It can also mean the terms for the removal of the item by the winning bidder.

Reserve

The terms “reserve” and “minimum bid” are interchangeable. The reserve price is the lowest price the seller will accept for the item. The auctioneer may declare the property sold once the bid price surpasses the reserve price, although many auctions are started below the reserve price. If the highest bid is less than the reserve, it will be up to the seller whether they wish to accept or reject the bid.

Sealed Bid

It is possible to hold a sealed bid auction, which involves the submission of bids to the auctioneer. Everything submitted will be opened at a preset date. The sealed bid can be used as the actual bids or can be used to qualify bidders to participate in a live auction.

Tender

“Tenders” are another type of auction, which are essentially silent auctions. Potential buyers will be required to submit sealed bids by a specific date. The offers are sealed, and the seller will not be able to accept them until the agreed-upon deadline.

Terms & Conditions

The terms and conditions are the rules that govern the auction, including how the bids will be handled and how the final purchase will be handled. To participate in the auction, potential bidders must agree to the terms and conditions when registering. View our terms and conditions here. 

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