Absentee Bid
A procedure that 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 auction company. The particular rules and procedures of absentee bids are unique to each auction company.
Absentee Bidder
A person (or entity) that is not present at the auction but submits, in advance, a written or oral bid that is the top price they will pay for a given asset.
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.”
Accredited Auctioneer Real Estate (AARE)
The professional designation awarded by the NAA Education Institute 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. In order to be designated with the AARE, auctioneer-scholars are required to complete 42 classroom hours, a detailed written auction summary report, proof of at least 10 real estate auctions, and 24 hours of continuing education every three years.
Advertising
Non-personal, paid communication such as a newspaper, radio, direct mail and TV directed toward the general public or, in some cases, specific prospective client groups to provide information about the time, place, contents, and arrangements of an auction.
Agent
A person who acts on behalf of another individual or entity.
Appraisal
The act or process of estimating value.
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 known as “public auction” or “auction 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, the individual may not actually conduct the sale but is directly responsible for all aspects of marketing the property.
Auction Marketing
The method of marketing assets utilizing the auction method of sale.
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 Technology Specialist (ATS)
A professional designation awarded by the NAA Education Institute to help professional auctioneers understand today's technology and how to use it to improve their business. ATS auctioneers gain experience in conducting live and online static auctions. In order to be designated with the ATS, auctioneer-scholars are required to complete 21 classroom hours, proof of at least three online auctions and 24 hours of continuing education every three years.
Auction Value
The price that a particular property brings via 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.
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. Also known as a “Contract 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 they are willing to 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 identity, the bid price and the description of the property. Also known as "Memorandum."
Bid Assistants
Individuals of a live auction team whose primary responsibility is to accurately interpret and effectively communicate buyer participation to their auctioneer. They should also be qualified to assist prospective bidders with the necessary information to make a better informed buying decision. Also known as “ringmen”, “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. See “Collusion”.
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. Also referred to as “bidder packet” or “due diligence packet.”
Bidder's Choice
A method of sale whereby the successful high bidder wins the right to choose an asset or assets from a grouping of similar or like-kind assets. After the high bidder's selection, the asset is deleted from the group, and the second round of bidding commences, with the high bidder in round two choosing an asset, which is then deleted from the group and so on, until all assets are sold. Also known as “Buyer’s Choice.”
Bookkeeper or Clerk
The individual 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.
Caravan Auctions
A series of on-site auctions advertised through a common promotional campaign.
Carrying Charges
The costs involved in holding a property that is intended to produce income (either by sale or rent) but has not yet done so, i.e., insurance, taxes, maintenance, management. Also known as “holding costs”.
Catalog or Brochure
A publication advertising and describing the property available for sale at public auction, often including photographs, descriptions, and the terms and conditions of 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.
Certified Auctioneers Institute (CAI)
The professional designation awarded to practicing auctioneers who meet the experiential, educational and ethical standards set by the NAA Education Institute. In order to be granted the CAI designation, auctioneer scholars must have been practicing full-time auctioneers for at least two year (prior to attending the institute), attend all three years of CAI with more than 120 classroom hours, complete all special projects and complete 24 hours of continuing education every three years.
Clerk
An individual 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. Also known as “Terms & Conditions”.
Conference and Show (C&S)
Annual conference and exposition of the National Auctioneers Association. Also known as “International Auctioneers Conference & Show”.
Continuing Education Units (CE's or CEU)
A measure used in continuing education programs, particularly those required in a licensed profession in order for the professional to maintain the license.
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.
Education Institute (EI)
NAA members are selected by the NAA Board of Directors to be Trustees of the Education Institute and carry out the association’s mission of continuing education to NAA members.
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.
Federal Deposit Insurance Corporation (FDIC)
The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system by insuring deposits, examining and supervising financial institutions for safety and soundness and consumer protection, and managing receiverships.
Federal Home Loan Banks (FHLB)
The FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the U.S. and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world.
Federal Housing Administration (FHA)
The FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the U.S. and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world.
Hammer Price
Price established by the highest bidder and acknowledged by the auctioneer before dropping the hammer or gavel.
Inspection
Specified date, time and place property is available for prospective buyer viewing and evaluation. Also known as a PREVIEW.
Intellectual Property (IP)
IP is a term referring to a number of distinct types of legal monopolies over creations of the mind, both artistic and commercial, and the corresponding fields of law. Under IP law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; words, phrases, symbols and designs.
International Auctioneer Champion (IAC)
Annual contest hosted by the National Auctioneers Association at its Conference & Show for bid-calling auctioneers. Each year, one female and one male auctioneer is declared the winner of the IAC.
International Society of Appraisers (ISA)
The ISA is a not-for-profit, member-driven association formed to support ISA member needs and serve the public by producing highly qualified and ethical appraisers who are recognized authorities in professional personal property appraising.
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 their listing agreement.
Livestock Marketing Association (LMA)
The LMA is an association committed to the support and protection of the local livestock auction markets and the livestock marketing industry.
Live On-Site Auctions
Auctions that are conducted on a scheduled premise and in person. Often the most common type of Auction.
Live Online Auctions
Auctions that are conducted on a scheduled premise that can be viewed and bid on online with your computer.
Lot
The general name or calling of an auction item to be bid on. Lot numbers are commonly used instead of the specific name of the item.
Market Value
The highest price that 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.
Max Bid
A Maximum Bid is the highest amount that a bidder is willing to pay on a particular item. The Maximum Bid must be greater than the bid increment the auction company has set. Winning a bid while using a maximum bid option can also be less than what was originally entered.
Memorandum
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.
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 multiple sellers, offered through a common promotional campaign and auctioned in a single event.
Multiple Listing Services (MLS)
The MLS is a suite of services that enables brokers to establish contractual offers of compensation (among brokers); facilitates cooperation with other broker participants; accumulates and disseminates information to enable appraisals; and is a facility for the orderly correlation and dissemination of property listing information to better serve broker's clients, customers and the public.
National Association of Realtors (NAR)
The core purpose of the NAR is to help its members become more profitable and successful.
National Auctioneers Association (NAA)
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.
No-Sale Fee
A charge paid by the owner of property offered at a reserve auction when the property does not sell.
On-Site Auction
An auction conducted on the premises of the property being sold.
Online Only Auctions
Online Only Auctions that are conducted on our website that are timed. They can be as short as a few hours to 7-10 days.
Opening Bid
The first bid offered by a bidder at an auction.
Other Real Estate Owned (OREO)
Real property owned by a banking institution that is not directly related to its business. In balance sheet terms, OREO assets are considered non-earning assets for purposes of regulatory accounting. OREO is most frequently a result of foreclosure on real property as a result of default by the borrower who used the property as collateral for the loan. Most items in this category are available for sale.
Preview
Specified date and time property is available for prospective buyer viewing and audits. Also known as “Open House” or “Inspection”.
Real Estate (RE)
Real estate, also known as real property, is a legal term that encompasses land along with improvements to the land, such as buildings, fences, wells and other site improvements that are fixed in location -- immovable.
Real Estate Owned (REO)
REO is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. A bank will typically set the opening bid at a foreclosure auction for at least the outstanding loan amount. If there are no bidders that are interested, then the bank will legally repossess the property. As soon as the bank repossesses the property, it is listed on their books as REO and is categorized as an asset (non-performing).
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 “reserve price”.
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 where by 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 marketplace.
Seller
Entity that has legal possession (ownership) of any interests, benefits or rights inherent to the real or personal property.
Streamlined Sales Tax Certificate of Exemption
Tax Sale
Public sale of property at auction by governmental authority due to nonpayment of property taxes.
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. This must be resolved by the auctioneer.
Timed Online Auctions
Online Auction where items are auctioned over a certain time period, usually 7-10 days.
Trustee's Sale
A sale at auction by a trustee.
Uniform Commercial Code (UCC)
The UCC, first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all U.S. states.
US Bureau of Alcohol, Tobacco, and Firearms (ATF)
A unique law enforcement agency of the U.S. Department of Justice that protects our communities from violent criminals, criminal organizations, the illegal use and trafficking of firearms, the illegal use and storage of explosives, acts of arson and bombings, acts of terrorism, and the illegal diversion of alcohol and tobacco products.
Watch List
A list of items that can be chosen from Online Auctions.
Webcast Auctions
Online Auctions that allow the bidder access to live video and audio feed via computer. Some Webcast Auctions are with audio only.
Withdrawal
Failure to reach the reserve price or insufficient bidding.
