Auction Terminology Glossary
Absentee Bid - 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. The bidder indicates which items the bidder wants to bid on and the highest amount, or cut-off, that the bidder is willing to go. An auction staff member will bid for that item on behalf of the bidder up to the cut-off amount.
Absentee Bidder - A person (or entity) who does not attend the sale but submits, in advance, a written or oral bid that is the top price he/she will pay for a given property.
Absolute Auction (Auction Without Reserve) – An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. An absolute auction is established by the auctioneer at the time the bidding is opened.
Agent – A person who acts for or in the place of another individual or entity by authority from them.
Appraisal – The act or process of estimating value.
Artist Resale Right – The right says that any art sold that belongs to a living artist or an artist who died within 70 years of the date that their work is sold is entitled to royalties. The law applies to members of the European Union.
As Is – Refers to a work that’s being offered for sale as it exists in its present condition.
Auction – A method of selling property in a public forum through open and competitive bidding. Some people refer to auctions as sales, while others call it a public auction or auction sale.
Auction Block – The raised platform or podium where the auctioneer stands when conducting an auction.
Auction With Reserve (Auction Subject to Confirmation) – An auction in which the seller reserves the right to establish a reserve price, to accept or decline any and all bids, or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer
Auctioneer – A trained professional who presides over the auction, initiating the sale of a lot by describing the item and starting the bidding. Auctioneers also place bids on behalf of absentee bidders and finally determine when the highest bid has been made.
Bid – The signal to the auctioneer by a prospective buyer, indicating the specific amount he is willing to pay for the lot if he wins the bidding. Most bids are legally binding and require pre-registration.
Bid History – Bids are kept on a list, which is created during and kept long after the bid is over.
Bid Increment – The amount by which the auctioneer increases the bidding. In general, the auctioneer will request bids of about 10% higher than the previous bid. The figure is generally rounded up or down at the auctioneer's discretion.
Bid Rigging – The unlawful practice whereby two or more people agree not to bid against one another so as to deflate value.
Block Bidder – Preventing a specific bidder from participating in single or future auctions, often by the seller’s request.
Bought-In (Unsold) – If there are no bids on a lot, or if bidding does not reach the reserve price, the lot is left unsold and remains the property of the owner.
Buyer’s Premium – The percentage above the hammer price paid by the buyer to the auction house that is part of the total purchase price.
CAI (Certified Auctioneers Institute) – The professional designation awarded by the National Auctioneers Association (NAA) to practicing auctioneers who meet the experiential, educational and ethical standards set by the NAA Education Institute.
Cataloging – Compiling all the valuable information about a lot or particular item. This information could contain the name of the artist or the maker of the item that is being auctioned off.
Catalogue – Printed publication in which are described, estimated, numbered in the order of sale, and sometimes reproduced, the furniture and objects constituting the auction.
Caveat Emptor – A Latin term meaning "Let The Buyer Beware!" A legal maxim stating that the buyer takes the risk regarding the quality or condition of the property purchased.
Chandelier Bid – A fake bid logged by an auctioneer as a way of encouraging unenthused bidders. This practice, also known as a “Rafter Bid,” is not illegal, but it is generally frowned upon in the industry.
Chant – A quick-cadence combination of numbers, words and sounds that keeps an auction clipping along. It is one of the most identifiable features of auctions and auctioneers.
Clerk – The person hired to keep official notes on what was sold during the auction and how much.
Commission – The amount you pay the auctioneer for selling the property. This is typically calculated as a percentage of the selling price.
Competing Bids – Before and during a sale, an auction house accepts competing bids for a lot from absentee bidders, phone bidders, online and in room bidders if all of these bidding methods are available.
Consignee – Another word for the auction house or auctioneer. This is the entity that is going to be selling the property of the consignor.
Consignor – The owner who is transferring property to an auction house to act as agent on his or her behalf for sale.
Curator – A person who takes on the responsibility of selecting and often interpreting works of art.
Current Bid – The present high bid. To become the current high bidder, you must advance the bidding by the next Bid Increment. Current Bid + Bid Increment = Next Allowable Bid.
Deposit – The amount of money required by the high bidder prior to or at the auction to show good faith in completing the purchase.
Designation – Proof that the person had completed additional specialized training from an accredited source such as the National Association of Realtors and the National Auctioneers Association.
Due Diligence – Gathering information about the condition and legal status of property to be sold.
Dynamic Close – A process that extends bidding on an asset for a fixed time, five minutes for example, if a bid is received in the final minutes of an auction. The auction continues until there are no bids for the fixed amount of time.
Estate Sale – The sale of property that has been left by an individual after his death. An estate auction can involve the sale of personal and/or real property.
Estimate – Each lot is given a low and high estimate, representing the opinion of experts about the range in which the lot might sell at auction. Estimates are based on the examination of an item and recent auction records of comparable pieces and are important guides for prospective buyers.
Exhibition History – A listing of museum or gallery exhibitions in which a given lot has appeared.
Fair Market Value – The price based on an appraiser’s opinion about what an object might sell for if offered by a willing seller to a willing buyer. Since the auction process is open to all bidders, a sale at auction is considered to be a measure of Fair Market Value.
Fair Warning – A warning sometimes given by the auctioneer that the hammer is about to come down on a lot. If there are no bids forthcoming, the auctioneer’s hammer falls and the sale is complete for that lot.
Gavel – Another name for the auctioneer’s hammer, which is used to close bidding.
Grading – The process examiners undertake in order to figure out the condition of a particular item. Details are written down, which helps describe the item to bidders. Different items have different grading systems.
Guarantee – Refers to cases in which an auction house has guaranteed to pay a specific amount to a consignor for a lot, regardless of the outcome at auction. The guarantee may be provided by the auction house, by a third party or jointly by the auction and a third party. You can identify whether a lot is guaranteed by a specific symbol, usually marked next to the estimates in the cataloguing. Third parties providing all or part of a guarantee benefit financially if a guaranteed lot is sold successfully and may incur a loss if the sale is not successful.
Hammer Price – The winning bid for a lot at auction. It reflects the highest amount acknowledged by the auctioneer before his hammer comes down. It does not include the buyer's premium. No bids can be accepted after the hammer has fallen, and the highest bidder is legally obliged to sign the contract or pay a penalty.
Increment – A minimum amount by which a new bid must exceed the previous bid. The auctioneer may decrease the increment when it appears that the bidding may stop so as to get a higher hammer price.
Intellectual Property – A number of distinct types of legal monopolies over creations of the mind, both artistic and commercial.
Internet Bid – When bidders may participate the auction via their computers.
Jump the Bid – A strategy by which a bidder increases the bid by more than the next accepted bid. This practice is used by some bidders to discourage others from bidding in hopes of acquiring an item at a lower price.
Knocked Down – A term for the hammer coming down and bringing an end to the bidding. It tells everyone they only have a few seconds to decide to bid or let the hammer come down, since most people are usually done bidding.
Lien – An adverse claim or charge against an item when that item is being used as collateral for a debt.
Live Internet Auctions – Computer technology that allows acceptance of bids on internet from all over the world.
Lot – The object or group of objects offered for sale at auction as a single unit.
Lot Number – The specific number assigned to a lot in an auction. Auctions typically proceed in numerical sequence by lot number.
Maximum Bid – The highest bid that can be made during an auction.
Minimum Opening Bid – The lowest staring price that will be accepted by the auctioneer.
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.
National Auctioneers Association – A U.S. association of individual auctioneers united to maintain ethical standards for the auction profession.
New Money – A new bidder joins the bidding after others have stopped bidding against each other.
No Reserve Auction – The seller has not established a minimum bid requirement or “reserve” on the auction.
No-Sale Fee – A charge paid by the owner of property offered at a reserve auction when the property does not sell.
On-site Auction – Conducted on the premises of the property being sold.
Online Bidder – A prospective buyer who is participating in the auction through an online bidding platform.
Open House – A designated time period a property is available for pre-auction viewing and inspection.
Opening Bid – The first bid placed by a registered bidder at an auction.
Outbid – To offer a higher price for the property.
Paddle – An object displaying the number assigned to a bidder when he registers at the auction.
Pass – A term used by the auctioneer to close the sale of an item and indicate that a lot has failed to reach its reserve price.
Personal Property – Any property that is not real estate, including items such as artwork, automobiles, furniture, musical instruments ect.
Preview (Open House) – Gives buyers a chance to see the item or lot before the auction date.
Price Fixing – When two or more auction houses conspire to eliminate competition by setting rates. It is a violation of the federal antitrust law.
Protecting a Market – When a dealer places a bid on a lot, which is by an artist that he represents or that he has financial interest in order to keep the bidding above a certain price.
Provenance – An important part of the authentication process. It establishes the chain of ownership back to the date an item was created. Provenance can significantly impact the value of an object.
Public Auction – Open to the public to bid on the property offered for sale.
Reserve Auction – An auction in which the seller reserves the right to establish a reserve price, to accept or decline any and all bids or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer.
Reserve Price (Reserve) – The confidential minimum price agreed upon between the consignor and the auction house. Reserves must be set at or below the low estimate, and if bidding ends before the reserve is reached, the property will not be sold. The reserve price can be amended at any time, but it needs to be in writing.
Ringman – An auction assistant that watches the crowd, encourages the bidding, creates excitement and conveys bids to the auctioneer or brings a bidder to the auctioneers attention.
Rostrum – Where the Auctioneer stands during the auction.
Runner – An assistant that gathers the items being offered and brings them to the podium.
Sealed Bid (Yankee Auction) – In a sealed bid auction, all bids are submitted to the auctioneer in writing to be opened at a predetermined deadline. Not a true auction in that it does not allow for reaction from the competitive market place.
Sequential Close – The bidding on lots closes sequentially beginning with Lot 1 with each subsequent lot closing at the time interval stated in the auction details page.
Single Lot Auction – Takes place when the seller wishes to sell one unit/lot for one price/bidder. The lot can include multiple assets sold as a single unit or one item.
Sniping – Placing a bid just before the end of a timed auction, thus giving other bidders no time to enter new bids.
Starting price – The lowest possible bid the first bidder must place.
Telephone Bidding – Sometimes offered in a live auction whereby a bidder may pre-register and bid via a telephone connection with the auctioneer.
Three D’s (Death, Divorce, Debt) – The main reasons for property to be sold at auction.
Tie Bid – When two or more bidders bid exactly the same amount at the same time and must be resolved by the auctioneer.
Timed Auction – The auctioneer sets the time the lots end and the increments' size. The person who bids highest wins the item.
Traditional Auction – Is conducted in front of a live audience at a physical location where the items for sale are located.
Underbidder – The bidder that has made the second-highest bid in an auction.
Valuation – A description detailing the current value of an item. Valuations differ from auction estimates and are used for many purposes, such as collateral loans, estate taxes, planning and insurance.
Voetstoots – Selling without any warranties as to the condition for a particular use. Buyers are solely responsible for examining and judging the property for their own protection.
Webcast Auctions – Using this service, bidders all over the world can bid on the assets for sale at the same time as those in the auction room (bidding requires an account).
White Glove Sale – An auction where 100% of the lots are sold.
Withdrawn Lot – A lot that has been removed from a sale prior to an auction. The auctioneer will announce withdrawn lots before the sale begins.
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