| AARE (Accredited
Auctioneer, Real Estate) |
The professional designation awarded to qualified real
estate auctioneers who meet the educational and
experiential requirements of the Institute and who adhere
to a strict code of ethics and standards of practice. |
Absentee
Bid
|
A procedure which 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 his representative. The particular rules and
procedures of absentee bids are unique to each auction
company. |
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 or she will pay for a given
property. |
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. |
Accounting
of Sale
|
A report issued to the seller by the
auctioneer detailing the financial aspects of the auction. |
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. |
Apprentice
Auctioneer
|
An auctioneer who is in training, operating
under the supervision of a licensed or experienced
auctioneer. |
“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
|
A method of selling property in a public
forum through open and competitive bidding. Also referred
to as: public auction, auction sale or sale. |
Auction
Block
|
The podium or raised platform where the
auctioneer stands while conducting the auction.
"Placing (an item) on the auction block" means
to sell something at auction. |
Auction
Listing
Agreement
|
A contract executed by the auctioneer and
the seller which authorizes the auctioneer to conduct the
auction and sets out the terms of the agreement and the
rights and responsibilities of each party. |
Auction
Marketer
|
An individual who contracts with sellers
for the auction method of marketing property. In the case
of real property, he or she may not actually conduct the
sale but is directly responsible for all aspects of
marketing the property. |
Auction
Marketing
|
The method of marketing real property
utilizing the auction method of sale. |
| Auction
Marketing Institute |
Founded in 1976, this international
association awards the professional designations CAI, GPPA
and AARE to properly qualified auctioneers through
education, experience, and adherence to a strict code of
ethics and standards of practice. Formerly known as the
Certified Auctioneers Education Institute Inc. |
Auction
Plan
|
The plan for pre-auction, auction day and
post auction activities. |
Auction
Price
|
The price of a property obtained through
the auction method of marketing. |
Auction
Subject to Confirmation
|
See Reserve Auction |
Auction
Value
|
The price which a particular property
brings in open competitive bidding at public auction. |
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. |
Auction
Without Reserve
|
See Absolute Auction |
| Auctioneer |
The person whom the seller engages to
direct, conduct, or be responsible for a sale by auction.
This person may or may not actually call or cry the
auction. |
Auctioneer
Subcontractor
|
An auctioneer hired by the principal
auctioneer. |
| Ballroom
Auction |
An auction of one or more properties
conducted in a meeting room facility. |
Bank
Letter of Credit
|
A letter from a bank certifying that a
named person is worthy of a given level of credit. Often
requested from prospective bidders or buyers who are not
paying with currency at auctions. |
| Bid |
A prospective buyer's indication or offer
of a price he or she will pay to purchase property at
auction. Bids are usually in standardized increments
established by the auctioneer. |
Bid
Acknowledgment
|
A form executed by the high bidder
confirming and acknowledging the bidder's identify, the
bid price and the description of the property. Also known
as Memorandum. |
Bid
Assistants
|
Individuals who are positioned throughout
the attendees at the auction to assist the auctioneer,
spot bidders and assist prospective bidders with
information to help them in their buying decision. Also
known as ringmen, bid consultants, bid spotters, or
groundsmen. |
| Bid
Caller |
The person who actually "calls,"
"cries or "auctions" the property at an
auction, recognizing bidders and acknowledging the highest
bidder. Commonly known as the auctioneer. |
| Bid
Rigging |
The unlawful practice whereby two or more
people agree not to bid against one another so as to
deflate value. |
| Bidder
Number |
The number issued to each person who
registers at an auction. |
| Bidder
Package |
The package of information and instructions
pertaining to the property to be sold at an auction event
obtained by prospective bidders at an auction. Sometimes
called a bidder packet or due diligence package. |
| Bidder's
Choice |
A method of sale whereby the successful
high bidder wins the right to choose a property or
properties from a grouping of similar or like-kind
properties. After the high bidder's selection, the
property is deleted from the group, and the second round
of bidding commences, with the high bidder in round two
choosing a property, which is then deleted from the group
and so on, until all properties are sold. |
Bookkeeper
or Clerk
|
The person who is responsible for the
accounting and paperwork at an auction sale. |
Broker
Participation
|
An arrangement for third-party brokers to
register potential bidders for properties being sold at
auction for a commission paid by the owner of the property
or the auction firm. |
| Buyer's
Broker |
A real estate broker who represents the
buyer and, as the agent of the buyer, is normally paid for
his/her services by the buyer. |
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. |
| CAI |
Certified Auctioneers Institute. The
professional designation awarded to practicing auctioneers
who meet the experiential, educational and ethical
standards set by the Auction Marketing Institute, Inc. |
Caravan
Auctions
|
A series of on site auctions advertised
through a common promotional campaign. |
Carrying
Charges
|
The costs involved in holding a property
which is intended to produce income (either by sale or
rent) but has not yet done so, i.e., insurance, taxes,
maintenance, management. |
Catalog
or Brochure
|
A publication advertising and describing
the property(ies) available for sale at public auction,
often including photographs, property descriptions, and
the terms and conditions of the sale. |
| Caveat
Emptor |
A Latin term meaning "let the buyer
beware." A legal maxim stating that the buyer takes
the risk regarding quality or condition of the property
purchased, unless protected by warranty. |
| Clerk |
The person employed by the principal
auctioneer or auction firm to record what is sold and to
whom and for what price. |
| Collusion |
The unlawful practice whereby two or more
people agree not to bid against one another so as to
deflate value or when the auctioneer accepts a fictitious
bid on behalf of the seller so as to manipulate or inflate
the price of the property. |
| Commission |
The fee charged to the seller by the
auctioneer for providing services, usually a percentage of
the gross selling price of the property established by
contract (the listing agreement) prior to the auction. |
Conditions
of Sale
|
The legal terms that govern the conduct of
an auction, including acceptable methods of payment,
terms, buyer's premiums, possession, reserves and any
other limiting factors of an auction. Usually included in
published advertisements or announced by the auctioneer
prior to the start of the auction. |
| Contract |
An agreement between two or more persons or
entities which creates or modifies a legal relationship. |
Cooperating
Broker
|
A real estate broker who registers a
prospective buyer with the auction company, in accordance
with the terms and conditions for that auction. The broker
is paid a commission only if his prospect is the high
bidder and successfully closes on the property. Also known
as a participating broker. |
| Critical
Path |
Sequence of key tasks to be done by auction
contractor or other designated parties on specified dates,
leading to desired goals. |
| Dual
Agency |
The representation of opposing principals
(buyers and seller) at the same time. |
| Due
Diligence |
The process of gathering information about
the condition and legal status of assets to be sold. |
| Estate
Sale |
The sale of property left by a person at
his or her death. An estate auction can involve the sale
of personal and/or real property. |
| Graduate,
Personal Property Appraiser (GPPA) |
The professional designation awarded to
qualified property appraisers who meet the educational and
experiential requirements of the Institute and who adhere
to a strict code of ethics and standards of practice. |
Groundsman
|
See Bid Assistants |
Hammer
Price
|
Price established by the last bidder and
acknowledged by the auctioneer before dropping the hammer
or gavel. |
Listing
Agreement
|
See Auction Listing
Agreement |
| Listing
Broker |
A real estate broker who has a listing on a
property and cooperates with the auction company by
allowing the auction agreement to supersede his/her
listing agreement. |
| Market
Value |
The highest price in terms of money which a
property will bring in a competitive and open market under
all conditions requisite to a fair sale, the buyer and
seller, each acting prudently, knowledgeably and assuming
the price is not affected by undue stimulus. |
| Memorandum |
Sometimes also referred to as a
"Bidder Acknowledgment," or "Broker
Acknowledgment," the memorandum is signed by those
parties either on the auction floor or in the contract
room. |
Minimum
Bid Auction
|
An auction in which the auctioneer will
accept bids at or above a disclosed price. The minimum
price is always stated in the brochure and advertisements
and is announced at the auctions. |
Minimum
Opening Bid
|
The lowest acceptable amount at which the
bidding must commence. |
Multi-Property
Auction
|
A group of properties offered through a
common promotional campaign. The properties to be
auctioned may be owned by one seller or multiple sellers. |
Multi-Seller
Auction
|
Properties owned by many sellers, offered
through a common promotional campaign are auctioned in a
single event. |
National
Auctioneers Association
|
An association of individual auctioneers
united to promote the mutual interests of its members;
formulate and maintain ethical standards for the auction
profession; promote the enactment of just and reasonable
laws, ordinances and regulations affecting auction
selling; make the public more aware of the advantages of
auction selling; and generally improve the business
conditions affecting the auction profession. |
National
Real Estate Auction Committee
|
A national committee developed by the
NATIONAL ASSOCIATION OF REALTORS in April, 1990 to provide
education to members concerning real estate auctions,
identify issues and monitor, review and analyze trends
affecting the real estate auction industry. It also is
charged with formulating policies for consideration by
other policy-making NAR Committees, its Executive
Committee and Board of Directors. |
| No-Sale
Fee |
A charge paid by the owner of property
offered at a reserve auction when the property does not
sell. |
| Opening
Bid |
The first bid offered by a bidder at an
auction. |
| On-site
Auction |
An auction conducted on the premises of the
property being sold. |
Participating
Broker
|
See Cooperating Broker |
Preview
|
Specified date and time property is
available for prospective buyer viewing and audits. Also
known as Open House or Inspection. |
Referring
Broker
|
A real estate broker who does not have a
listing on a property, but refers the auction company to a
potential seller for an auction. Usually earns a flat fee
commission for referring product to an auction company. |
| Regroup |
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
bidder's choice. |
| Reserve |
The minimum price that a seller is willing
to accept for a property to be sold at auction. Also known
as the reserve price. |
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. See also Auction With Reserve. |
| Sale
Manager |
The person designated by the auction
company who is responsible for organizing the details of
an auction. Also known as project manager. |
| Sealed
Bid |
A method of sale utilized where
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 market
place. |
| Seller |
Entity that has legal possession,
(ownership) of any interests, benefits or rights inherent
to the real or personal property. |
Subject
to Confirmation
|
See Reserve Auction |
| Tax
Sale |
Public sale of property at auction by
governmental authority, due to nonpayment of property
taxes. |
| Terms |
The period of time that an agreement is in
effect. |
Terms
and Conditions
|
The printed rules of the auction and
certain aspects of the Purchase & Sale Agreement that
are read and/or distributed to potential bidders prior to
an auction sale. |
| Tie
Bids |
When two or more bidders bid exactly the
same amount at the same time and must be resolved by the
auctioneer. |
| Trustee's
Sale |
A sale at auction by a trustee. |
| Upset
Price |
Commonly known as the reserve price. |
| Withdrawal |
Failure to reach the reserve price or
insufficient bidding. |
|
Courtesy of the National Auctioneers Association
|
