Auction Terminology: Key Terms Every Bidder & Seller Should Know

Common Auction Terms for Bidders & Sellers

The following is a list of various terminology that is used in the auction process.  Review this to become familiar with the terminology that is used at our auction:

 

“As Is” also known as "as is, where is" and "in its present condition." It further means that there is no warranty as to the condition and merchantability for a particular use, and that the item(s) cannot be returned, i.e., all sales are final;

“Absentee Bid/Proxy Bid” is a bid placed in advance of the auction because the bidder will not be attending the auction.  When the auction starts on that particular lot, the auctioneer will bid on behalf of the Absentee Bidder;

“Absentee Bidder” is a person who does not attend the auction but instead submits, in advance, a written bid that is the maximum price that he/she will pay for a given item(s);

“Additional Buyer's Expenses” are any other costs or expenses due to Rosewood & Teak from the Buyer which are payable in respect of the sale of the items;

“Appraisal” is the act or process of estimating the value of something;

“Auction” is a method of selling real or personal property in a public or private forum to the highest bidder;

“Auction Block” is 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;

“Auctioneer” is the person whom the seller engages to conduct the auction of its items;

“Bank Letter” is a letter from a buyer’s bank certifying that the person mentioned is credit-worthy.  Michael Stephen Auctions may require an unknown person to provide such a letter from his/her bank before being able to place a bid;

“Bid” is the amount that a prospective buyer is willing to pay for a lot during the bidding process.  The bid does not include the buyer’s premium or taxes;

“Bidder” is any person who places a bid in an auction;

“Bid Caller” is the person who actually "calls," "cries" or "auctions" the item(s) at an auction, recognizing bidders and acknowledging the highest bidder, commonly known as the Auctioneer;

“Bid Card/Paddle” is a card/paddle displaying a registered bidder's bid number to be used for bidding in the auction room for a live auction;

“Bidder's Choice” is a method of selling that allows the winning bidder to buy one or several of a group of items. For example, if a dozen ceramic plates were up for sale and the final selling price was $40, the winning bidder would have the choice of buying from one to all twelve plates at $40 each;

“Bid History” is a historical list of all the bids made on a particular lot at an auction;

“Bid Increment” as the price of the item being bid on increases the auctioneer will increase the next allowable bid by either a percentage or a fixed amount;

“Buy-Back or Bid-Back” is when a seller bids on a lot and "buys" it back to protect it against a sacrifice to the highest bidder whose bid is insufficient in the view of the seller. Michael Stephen Auctions does not allow this practice;

“Buyer” is the person who makes the highest bid for a Lot in an auction and that amount is accepted by the auctioneer;

“Buyer’s Expenses” are any costs or expenses due to Michael Stephen Auctions from the Buyer, including any taxes or packing, handling, shipping, and insurance charges payable in respect of the sale of the item;

“Buyer's Premium” is a stated percentage (commission) that is added to the highest bid (hammer price) that is payable by the buyer;

“Buyer’s Shipping Costs” are any packing, handling and transportation costs and charges (including any costs for transit insurance) payable by the Buyer to Michael Stephen Auctions for the delivery of any item(s) purchased by the Buyer;

“Conditions of Sale” are the details that spell out the contractual requirements of the bidding and sale of the items being sold at the auction;

“Catalog or Brochure” is a publication advertising and describing the item(s) available for sale at an auction, often including photographs, descriptions, and the terms and conditions of the sale;

“Catalog Raisonné” a publication that documents and authenticates a complete inventory of an artist’s oeuvre, sometimes specific to a given medium (e.g., paintings).

“Clerk” is the person employed by the auction firm to record what is sold, to whom and for what price;

“Commission” is the fee the auctioneer charges the seller for providing the auction services in order to sell the sellers items at auction. The commission is usually a stated percentage of the hammer price;

“Competing bid” represents alternative bids for an item from various sources including (but not limited to); bids from an in-house audience, telephone bids, absentee bids, and online bids;

“Consignee” is the auctioneer or auction house to whom the item(s) have been entrusted by the seller (consignor) to be sold at auction;

“Consignment Auction” is an auction comprised of items offered for sale by multiple sellers;

“Consignor” is the person or authorized agent or entity that consigns goods to an auctioneer (consignee) for the sale of those items. The consignor is usually the Seller;

“Contract” is an agreement between two or more parties that is enforceable by law;

“Counterfeit” is making or creating an unauthorized imitation of a genuine article with the intention to defraud;

“Escrow” is money held in trust by a third party until the seller(consignor) or seller’s agent makes delivery of merchandise to the buyer;

“Estate Auction” is the sale of property usually upon the death of a person, however, an estate sale can also be by a person who is alive as it represents their considerable property that they have accumulated and wish to sell;

“Fake” is a worthless imitation passed off as genuine and valuable;

“Fraud” is the misrepresentation of a material fact that causes another to rely on the misrepresentation and be damaged. At Michael Stephen Auctions we always advise buyers to preview an item(s) before bidding;

“Gavel” is the hammer used by the auctioneer to indicate that the item has been sold;

“Grading” is the process for determining the physical condition of an item. Different items have different grading systems;

“Hammer Price” is the final selling price of a lot or item to the highest bidder that is accepted by the auctioneer. The hammer price does not include the buyer’s premium or taxes;

“Introducer” at some auctions a member of the auction staff (not the auctioneer) will describe each lot to the audience before it is opened to bidding;

“Jump the Bid” is a bidder strategy to reduce competition by bidding an amount higher than what the auctioneer is requesting;

“Lien” is a claim or charge against an item(s) when that item is being used as collateral for a debt;

“Lot” is an item to be offered for sale at an auction. Each offering by the auctioneer is a lot, lots are normally denoted by a "lot" number;

“Market Value” is a term that refers to the highest price certain property will bring in an open, fair, and competitive selling environment. Markets can be defined as collectors', retail, wholesale, and down to "fire sale." Markets can also vary in size from worldwide, to national, to regional, to statewide, to local;

“Marketing” is the advertising and promotional events in order to help increase awareness and the selling price of an item(s) so as to attract potential buyers to the auction;

“Maximum Bidding (AKA Proxy Bidding)” is your maximum bid;

“Michael Stephen Auctions” means Michael Stephen Auctions, a limited liability company which has its office at 425 South Main Street, Suite 202, Rochester, Michigan 48307;

“Minimum Opening Bid” is when the auctioneer will only accept bids at, or above, the amount of the disclosed, opening bid;

“No-Sale Fee” is a fee that is sometimes assessed to a seller by an auctioneer for offering a lot when the lot does not sell;

“Online Only Auction” is the sale of a Lot which is conducted solely by means of logging into the Michael Stephen Auctions website and is not conducted in front of a traditional live audience;

“Online Sale Information” is the Lot information including, but not limited to, any pre-sale estimates; any information regarding provenance; the online catalog description of the Lot; any condition report provided by Michael Stephen Auctions in relation to the Lot (with any such condition report being deemed to include the online images of the Lot); any other information relating to the Lot;

“On-site Auction” is an auction conducted on the premises of Michael Stephen Auctions;

“On-site Bidder” is a bidder who is physically present at the auction venue;

“Outbid” is to submit a maximum bid that is higher than another buyer's maximum bid;

“Preview” is a designated time period for prospective buyers to view and inspect the auction items;

“Proxy Bidding” is the process of leaving a maximum bid;

“Public Auction” is an auction that is advertised and open to the public to bid on the items offered for sale;

"Purchase Price" is the Hammer Price plus the applicable Buyer's Premium and taxes;

“Reproduction” is a close imitation of an item;

“Reserve or Reserve Price” is the minimum price that a seller is willing to accept for an item to be sold at auction. This amount is confidential and is not openly disclosed to potential buyers;

"Seller" is the person offering a Lot for sale (including their agent (other than Michael Stephen Auctions), executors or personal representatives);

“Soft Close” is what we use for our online timed auctions. This means that if someone places a bid when there is less than 1 minute left before the lot is set to close, the lot will be extended for an additional amount of time.  This occurs every time someone places a bid when there is less than one minute left.  This gives everyone a fair chance just as if it were a live auction.

“Starting Price/Bid” is the price that the auctioneer opens up with for a given lot;

“Times the Money” is a selling method whereby an auctioneer sells multiple items in one lot under the term that the lot's final price will be calculated by multiplying the highest bid by the number of items comprising the lot;

“Two ways” is a selling method auctioneers sometimes use with items that would naturally go together, such as the pieces to a dining room set. The items are exposed to bidding individually, with the highest bid for each piece "held" and the items not sold. Then the items are exposed to bidding in aggregate. Whichever approach yields the highest total price is the way the items will be sold;

“Traditional Auction” is an auction that is conducted in front of a live audience at a physical location where the items for sale are located;

“UCC” is the Uniform Commercial Code.  It is a body of commercial law that applies to auctions and has been largely adopted into law by every state except Louisiana;

“Withdrawal” is when an auctioneer does not sell a lot because it did not reach its reserve price.