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AUCTION RESOURCE GUIDE AUCTION RESOURCE GUIDE

• AUCTION WITH RESERVE: Also known as Sometimes the property may be protected by
“Reserve Auction” and “Auction Subject to warranty, but this is a rare occasion.
Confirmation”. An auction in which the seller • cleRk: The person employed by the principal
reserves the right to establish a reserve price, auctioneer or auction firm to record what is
to accept or decline any and all bids, or to sold and to whom and for what price.
withdraw the property at any time prior to the • commission: The fee charged to the seller by
announcement of the completion of the sale the auctioneer for providing services, usually
by the Auctioneer. a percentage of the gross selling price of the
• AUCTIONEER or Bid calleR: The person property established by contract prior to the
whom the seller engages to direct, conduct, auction.
or be responsible for a sale by auction. This • condiTions of sale: The legal terms that
person may or may not actually “call” or “cry” govern the conduct of an auction, including ac-
the auction. ceptable methods of payment, terms, buyer’s
• Bank leTTeR of cRediT: A letter from a bank premiums, possession, reserves and any other
certifying that a named person is worthy of limiting factors of an auction. Usually included
a given level of credit. Often requested from in published advertisements or announced by
prospective bidders or buyer who are not pay- the auctioneer prior to the start of the auction.
ing with currency at auction. • conTRacT: An agreement between two or
• Bid: A prospective buyer’s indication or offer more persons or entities which creates or
of a price he/she will pay to purchase property modifies a legal relationship.
at auction. Bids are usually in standardized • CONSIGNEE: The auctioneer or auction house
increments established by the Auctioneer. operator to whom goods are entrusted by
• BIDDER NUMBER: The number issued to each another (consignor) for sale at auction.
person to registered at an auction. • CONSIGNOR: The person or authorized agent
• BiddeR’s choice: A method of sale whereby or entity that consigns goods to an auctioneer.
the successful high bidder wins the right to The consignor is usually the seller.
choose a property or properties from a group- • escRoW: Money held in trust by a third party
ing of similar or like-kind properties/items. until the seller makes delivery of merchandise
After the high bidder’s selection, the property/ to the buyer.
item is deleted from the group, and the second • DUE DILIGENCE: The process of gathering in-
round of bidding commences, with the high formation about the condition and legal status
bidder in round two selecting a property/item. of assets to be sold.
That property/item is then deleted from the • esTaTe sale: The sale of property left by a
group, and the 3rd round begins, continuing person at his or her death. An estate auction
until all properties/items are sold. can involve the sale of personal and/or real
• BUYER’S PREMIUM: An advertised percentage property. NOTE: There sometimes are “LIVING
of the high bid or flat fee added to the high ESTATE AUCTIONS”, where the seller is alive,
bid to determine the total contract price to be but wishes to liquidate personal belongings
paid by the buyer. and has hired the Auctioneer to do so.
• CATALOG or BROCHURE: A publication adver- • inspecTion: Specified date, time and place
tising and describing the property available for property is available for prospective buyer
sale at publicauction, often including photo- viewing and evaluation. Also known as a PRE-
graphs, descriptions, & the terms &conditions VIEW.
of sale. • loT: An item or set of items for sale in an
• caVeaT empToR: A Latin term meaning “Let auction, lots are normally denoted by a “lot”
The Buyer Beware!” A legal maxim stating that number.
the buyer takes the risk regarding the qual-
ity or condition of the property purchased.

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