AUCTION TERMINOLOGY

Absolute Auction

An auction without a reserve. An auction in which property is sold to the highest bidder regardless of price.

Absentee Bid

A procedure that allows a bidder to participate in the bidding process without being physically present. A bidder who cannot attend submits an offer prior to the auction. All arrangements for payment have been made in advance.

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".

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.

Bidders Choice

A method of sale whereby the successful high bidder wins the right to choose an item or items from a grouping of similar items. The winning bidder then has the choice to take one item or as many as were offered in that round. After the high bidder's selection, the item is deleted from the group, and the second round of bidding commences, and so on until all items are sold.

Buyer's Premium

A percentage is added to your bid amount. In Real Estate it is an amount added to the high bid to determine the total contract price to be paid by the buyer. The use of the buyer's premium benefits both buyers and sellers. Sellers benefit because it helps to defray many of the expenses associated with conducting an auction. The buyer benefits because without the use of this tool, there may not have been an auction. The competitive bidding process might not exist if the buyer's premium were not used to offset some of the expenses. Check the terms and conditions of the auction to determine if there is a buyer’s premium.

Due Diligence

The process of gathering information about the condition and legal status of the property to be sold.

Multi-Parcel Auction

A process used in real estate auctions where a bidder has the opportunity to combine several parcels of land previously selected by other bidders, thereby creating one larger parcel out of several smaller parcels. This process is often used in conjunction with the bidder's choice.

Preview

Also called Open House. Pre-determined times are made available for you to inspect the property offered for sale. You will want to evaluate the overall condition of the property and determine if there are any defects. While these may be acceptable to you, they may affect the amount you want to bid, so look before you bid.

Property Information Package

A package of information and instructions provided by the auction company pertaining to the property to be sold such as a contract, legal description, survey, terms, and disclosure statements.

Registration

The process you must complete in order to be a qualified bidder. For an on-site auction, first, ask to register and obtain a bid card. You will be asked to show proper identification to register. You may be required to verify that you have certified funds or cash in your possession. You must register at each auction event. This is essential before bidding. For an online auction, go to the online website of the action and click on the register button. Follow the prompts.

Terms and Conditions

The legal terms and rules for a specific auction. Each auction’s terms and conditions may vary and the bidder must understand them before participating in an auction. They include the method of payment, buyer’s premiums, possession, reserves, and other limiting factors. Usually included in published advertisements or announced by the auctioneer prior to the start of the auction.