We recently wrote about auction “jargon” and how to make people more familiar with all of it. Here’s that recent article: https://mikebrandlyauctioneer.wordpress.com/2018/05/11/the-public-and-auction-jargon/ Today, we explore some of the most common auction jargon.
As someone who as sat in courthouses, reviewed depositions and assisted various attorneys all over the United States with auction-related litigation (and conducted auctions in 18 states from California to Maine,) I can tell you that there are substantial misunderstandings about certain auction jargon — words.
Courtesy of the National Auctioneers Association, here’s a subset list (with a few edits) of the what I perceive are the most “not understood” and/or misunderstood words in the auction industry; further, here’s a link to the complete list: http://www.auctioneers.org/consumers/auction-glossary
- Absentee Bid
A procedure that 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 auction company. The particular rules and procedures of absentee bids are unique to each auction company.
- 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.”
- 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 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.
- Bidder’s Choice
A method of sale whereby the successful high bidder wins the right to choose an asset or assets from a grouping of similar or like-kind assets. After the high bidder’s selection, the asset is deleted from the group, and the second round of bidding commences, with the high bidder in round two choosing an asset, which is then deleted from the group and so on, until all assets are sold. Also known as “Buyer’s Choice.”
- 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.
- Hammer Price
Price established by the highest bidder and acknowledged by the auctioneer before dropping the hammer or gavel.
- Multiple Parcel Auction
A method of sale allowing bidders to bid on individual (typically real property) tracts, combinations of tracts or the entire property in an unrestricted process that promotes greater competition for each tract, leading to higher prices.
- No-Sale Fee
A charge paid by the owner of property offered at a reserve auction when the property does not sell.
- Online-only Auction
An auction where bids must be placed via the Internet and no live auction is being conducted.
- Sealed Bid
A method of sale where by confidential bids are submitted to be opened at a predetermined place and time. Not a true auction in that it does not allow for reaction from the competitive marketplace.
- Simulcast Auction
An auction where bids may be placed online as well as at a live auction event.
- Soft Close
An online auction where the auction end time is extended after each bid to allow for further bidding; akin to any live auction where the auctioneer keeps taking bids until no bid is offered within a reasonable time.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.