Online Auction Terminology Guide

Online auction terminology guide

Online auctions are a fantastic resource for business liquidation. But, if you're new to the online auction world, the language can be confusing. This guide will help you understand some of the most common terms used in online auctions so that you can bid with confidence.

Absentee Bid

A bid submitted by a potential buyer not present at the online auction.

After Sale Offers

Bids placed after the online auction is over for items that did not sell.

Alert

A notification set by the buyer that will automatically bid on an item up to their specified limit if someone outbids them.

Appraisal

An estimate of fair market/insurance value, typically done by a professional appraiser.

As Is

The condition of the item sold without a warranty or guarantee from the seller.

Auction Block

The physical location where an online auction is taking place.

Auction Listing Agreement

The contract between the seller and the online auction company outlines the terms and conditions of the sale.

Auctioneer

The person in charge of running the online auction.

Autobid

A feature that allows the buyer to set a maximum bid and have the system automatically bid on their behalf up to that amount if someone outbids them.

Bank Letter of Credit

A letter from a bank stating that the buyer has the funds available to purchase the item.

Bid

 An offer made by a potential buyer to the seller.

Bid Extension

Also known as a "call for bids," this is when the auctioneer reopens bidding on an item that has had its final bid called.

Bid History

A record of all bids placed on an item.

Bid Increment

The minimum amount by which a bid can increase.

Bid Rigging

A form of fraud in which two or more people agree to refrain from bidding against each other to drive up the price of an item.

Bid Sniping

The practice of waiting until the last few seconds to place a bid to avoid giving other potential buyers a chance to respond.

Bidding Profile

A record of the items a buyer has bid on and their corresponding bids.

Binding

A legally binding contract created by bidding at an online auction.

Block Bidder

Preventing a bidder from bidding in an online auction.

Block Close

An online auction in which items are grouped and closed as a block.

Bought-In

When an auctioneer declares an item "bought in," it means that the item did not reach the reserve price and will not sell.

Buyer's Premium

An additional fee added to the final purchase price of an item, typically a percentage of the last bid.

Buy-In Rate

The percentage of items in an auction that are "bought-in" or do not reach the reserve price.

Buyout Price

The price at which the seller is willing to sell the item outside of the auction.

Buyer Absolute Bid

The highest amount a buyer is willing to pay for an item.

CAI

Certified Auctioneers Institute

Catalog

A list or guide of the items available at an online auction.

Cataloging

The process of describing and photographing items for an auction.

Certificate of Authenticity (COA)

A document that guarantees the legitimacy of an item, typically used for art or collectibles.

Chandelier Bid

A bid placed by the auctioneer to increase an item's price. This bid is legal but generally frowned upon as it can manipulate the auction's outcome.

Chant

The rhythmical speech used by auctioneers to keep the bidding going.

Clerk

The person responsible for recording bids and maintaining order during an auction.

Closing

The final stage of an auction in which the highest bidder is declared the winner.

Commission

The fee charged by the auctioneer for their services.

Concurrent Close

An online auction in which all items close simultaneously.

Condition

The physical or working condition of an item.

Condition Report

A document describing the condition of an item, typically used for high-value or delicate items.

Conditional Sale

An auction in which the sale is contingent on certain conditions being met, such as financing.

Consignee

The person or company who consigns items to sell at auction.

Consignor

The person or company entrusts items to a consignee to sell at auction.

Curator

A professional responsible for the care and management of a collection of items, typically in a museum or gallery.

Current Bid

The highest bid currently on an item.

Day Sale

An auction that takes place over one day.

Deposit

A sum of money paid by the buyer to the auctioneer as a show of good faith before the auction.

Due Diligence

The research done by a buyer in advance of an auction to assess the value and condition of the items offered for sale.

Duration Closure

An auction in which the items close at set times throughout the auction.

Escrow

A third-party service holds funds in escrow until the transaction is complete.

Estate Auction

An auction of items from an estate, typically held after the owner's death.

Estimate

An appraisal or valuation of an item, typically given by a professional.

Expert

A specialized knowledge in a particular area, such as art or antiques.

Extended Time

An auction in which the closing time is extended on an item if someone places a bid within a set period before the scheduled closing time.

Fair Market Value

The price that a willing buyer and seller would agree on for an item.

Fair Warning

An announcement made by the auctioneer that the item is about to be sold.

Grading

The process of assessing the condition and quality of an item.

Guarantee

A promise by the auctioneer that an item will sell for a specific price.

Hammer Price

The price at which an item is sold, announced by the auctioneer dropping their gavel.

Liability

An Auctioneer is liable to a seller for losses related to the auctioneer’s negligence, or to a buyer for fraud and failure to deliver property.

Lien

A claim or legal right to hold a property or possession belonging to someone else until they pay their debt.

Lot

A group of items offered for sale as a single unit.

Lot Number

A number assigned to each lot in an online auction catalog.

Markings

Identification marks on an item, such as a maker's mark or signatures.

Maximum Bid

The highest amount a buyer is willing to pay for an item.

National Auctioneers Association

The professional trade association for auctioneers in the United States.

Next Allowable Bid

The minimum amount required to remain the high bidder.

No Reserve

An auction in which there is no minimum bid or price set for an item.

Online Auction

An auction occurring online, typically through an auction app or website.

Opening/Starting Bid

The first bid made on an item.

Outbid

To be outbid is to have been beaten by another bidder's higher offer.

Paddle

A paddle is a numbered paddle used to signal bids during an auction.

Pass

An announcement made by the auctioneer that an item will not sell.

Payment Arrangements

Requirements related to when a buyer must pay for items won during an auction. Most auction companies require payment after a successful bid.

Pre-Sale Estimate

An estimate of an item's selling price before the online auction.

Preview

A period before an auction during which potential buyers can inspect the items for sale.

Provenance

A history or record of ownership of an item.

Reserve Price

The minimum price for which the seller is willing to sell an item.

Safe Handler

The person who handles the shipping of sold auction items.

Sealed Bid

An auction in which bids are submitted in sealed envelopes and opened after the deadline.

Secondary Market

The market for selling items after they have been initially sold, such as at an auction.

Sell-Through Rate

The percentage of items sold during an auction.

Sequential Close

An auction in which items close one after the other, usually with a set time interval between each closing.

Single Lot Auction

An auction with only one item offered for sale.

Starting Price

The price at which the auction begins.

Terms and Conditions

The rules and guidelines of an online auction.

Tie Bid

Two or more bids occur simultaneously for the same price.

Timed Auction

An auction in which items are offered for sale for a set period, after which the highest bidder wins the item.

Types of Payments Accepted

The auction company may accept cash, credit cards, debit cards, cashier’s checks, or personal checks. 

Under Bidder

The person who makes the second highest bid on an item.

Valuation

A professional appraisal of an item's worth.

White Glove Sale

An auction where every item sells, regardless of the price.

Withdrawal

The removal of an item from an auction before it sells.

Going Once, Twice, and Sold to the Highest Bidder

Auction terminology can be confusing, but with this guide, you should now have a basic understanding of the most important terms. Remember that auction terms may vary depending on where you live, so it is always best to consult an auctioneer or other professional if you have specific questions. Contact Auction Masters today to learn more about common auction terminology.


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