Auction - Terminology

Terminology

• Appraisal - An estimate of an item's worth, usually performed by an expert in that particular field
• Auction block
• Bidding
• Buyer's premium - A fee paid by the buyer to the auction house; typically calculated as a percentage of the winning bid and added on to it.
• Buyout price - A price that, if accepted by a bidder, immediately ends the auction and awards the item to him/her.
• Commission - A fee collected by the auction house; typically calculated as a percentage of the winning bid and subtracted from it before the money is released to the seller.
• Consignee
• Consignor
• Dummy bid
• CMD (Caution Money Deposit)
• Dynamic closing
• EMD (Earnest Money Deposit) - A payment that must be made by prospective bidders ahead of time to indicate that they are serious about wanting to buy an item. Most often used when high-value goods such as real estate are up for auction. The winning bidder has his/her earnest money applied toward the final selling price; the non-winners have theirs refunded to them.
• Escrow - An arrangement in which the winning bidder pays the amount of his/her bid to a third party, who in turn releases the funds to the seller under agreed-upon terms.
• Hammer price - Nominal price at which a lot is sold; the buyer is responsible for paying any additional fees and taxes on top of this amount.
• Increment - The minimum amount by which a new bid must exceed the previous one.
• Job lot - A large quantity of identical manufactured goods being sold as a single item.
• Knocked down to
• Lot - A single item or group of items that are bid on as one unit.
• Minimum bid - The smallest opening bid that will be accepted.
• No reserve - An auction in which the seller must honor the winning bid, regardless of its amount.
• Outbid - To bid higher than another person.
• Opening bid - First bid placed on a particular lot.
• Proxy bid (aka absentee bid) - A bid placed by an authorized representative of a bidder who is not physically present at the auction. If the proxy is outbid, he/she may increase the bid in increments up to a pre-arranged maximum.
• Registration deposit
• Relisting
• Reserve price - A minimum acceptable price that is established by the seller prior to the auction; may or may not be disclosed to the bidders. If the winning bid is below the reserve price, the seller has the right to withdraw the lot.
• Sniping - Placing a bid just before the end of a timed auction, thus giving other bidders no time to enter new bids.
• Vendor
• Vendor bid