Understanding the Auction Industry: A Comprehensive Glossary

At Blue River Digital, we believe in the power and potential of the auction industry. Over the years, we’ve dedicated ourselves to becoming one of the leaders in auction marketing nationwide, helping auctioneers and businesses connect with buyers in the most effective ways possible. Our deep commitment to the auction industry stems from a recognition of its unique dynamics and the value it brings to buyers and sellers alike.

Why Auctions Matter to Us

The auction industry is more than just a business model; it’s a community, a tradition, and a dynamic marketplace that thrives on transparency, competition, and fairness. Auctions offer a unique platform for buying and selling, characterized by their ability to quickly liquidate assets, create excitement, and reach a broad audience. At Blue River Digital, we see auctions as an opportunity to bring people together, create value, and foster economic activity.

Our journey in the auction marketing space has been driven by a passion for innovation and excellence. We’ve worked with numerous auctioneers across the country, helping them leverage digital marketing strategies to enhance their reach and effectiveness. Our expertise in auction marketing is built on years of experience, a deep understanding of auction dynamics, and a commitment to using the latest technology to deliver results.

Why We Provide Auction Terms

Understanding the language of auctions is crucial for anyone involved in this industry, whether you’re a seasoned auctioneer or a first-time bidder. The terminology used in auctions can be complex and specialized, which is why we’ve compiled a glossary of auction terms on our website. This glossary serves several purposes:

1. Education: By providing clear definitions of common auction terms, we aim to educate our clients and the public about the auction process. This knowledge empowers them to participate more confidently and effectively in auctions.
2. Transparency: Auctions thrive on transparency and trust. By demystifying the language of auctions, we help build trust between buyers, sellers, and auctioneers, ensuring that everyone understands the rules and processes involved.
3. Resource: Our glossary is a valuable resource for anyone interested in auctions. Whether you’re preparing for an auction, learning about the industry, or simply curious, our glossary provides the information you need.
4. Leadership: As leaders in auction marketing, we believe it’s our responsibility to contribute to the industry’s knowledge base. Our glossary reflects our commitment to excellence and our role as thought leaders in the auction community.

Auction Glossary

Here is a comprehensive list of auction definitions to help you navigate the auction process:

1. Absolute Auction: An auction where the property is sold to the highest bidder without any minimum bid or reserve price.
2. Auction: A public sale in which goods or property are sold to the highest bidder.
3. Auction with Reserve: An auction in which the seller reserves the right to accept or decline any bid, usually because a minimum price has been set.
4. Auction without Reserve: Also known as an absolute auction, where there is no minimum bid, and the highest bid wins.
5. Auctioneer: A person engaged in the profession of selling property using an open cry or chant to solicit competitive bidding.
6. Auctioneer Subcontractor: An auctioneer hired by the principal auctioneer.
7. Ballroom Auction: An auction of one or more properties conducted in a meeting room facility.
8. 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.
9. Bid: An offer made by a prospective buyer to purchase an item at auction, usually in standardized increments set by the auctioneer.
10. Bid Acknowledgment: A form confirming the high bidder’s identity, the bid price, and the property description. Also known as a “Memorandum.”
11. Bid Assistants: Individuals who help the auctioneer by spotting bids and assisting prospective bidders. Also known as “ringmen,” “bid spotters,” or “groundsmen.”
12. Bid Caller: The auctioneer who announces the bids and acknowledges the highest bid during the auction.
13. Bidder Number: The number issued to each person who registers at an auction.
14. Bidder Package: A packet of information and instructions for prospective bidders regarding the property to be auctioned. Also known as a “due diligence packet.”
15. Bidder’s Choice: A method where the highest bidder gets the right to choose a property from a group of similar properties. After the selection, the process is repeated until all properties are sold.
16. Bookkeeper or Clerk: The individual responsible for the accounting and paperwork at an auction sale.
17. 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.
18. Buyer’s Broker: A real estate broker who represents the buyer and is usually paid for their services by the buyer.
19. Buyer’s Premium: An additional fee charged to the buyer, typically a percentage of the final bid price.
20. Caravan Auctions: A series of on-site auctions promoted through a common campaign.
21. Carrying Charges: Costs involved in holding a property that is intended to produce income but has not yet done so, such as insurance, taxes, and maintenance.
22. Catalog or Brochure: A publication advertising and describing the properties available for sale at public auction, often including photographs and terms of sale.
23. Caveat Emptor: A Latin term meaning “let the buyer beware,” indicating that the buyer assumes the risk regarding the quality or condition of the property purchased.
24. Certified Auctioneers Institute (CAI): A professional designation for auctioneers who meet specific experiential, educational, and ethical standards set by the NAA Education Institute.
25. Certified Estate Specialist (CES): A designation for auctioneers specializing in estate sales, requiring specific education and continuing education.
26. Clerk: An individual employed by the principal auctioneer or auction firm to record what is sold and to whom and for what price.
27. Collusion: The illegal practice where two or more people agree not to bid against each other to deflate the value, or when the auctioneer accepts a fictitious bid to manipulate the price.
28. Commission: The fee charged by the auctioneer to the seller, typically a percentage of the gross selling price.
29. Conditions of Sale: The legal terms governing the auction, including payment methods, terms, buyer’s premiums, possession, reserves, and other factors.
30. Consignment Auctions: Auctions that include items from multiple sellers, known as consignors.
31. Continuing Education Units (CEUs): A measure used in continuing education programs for professionals to maintain their licenses.
32. Contract: An agreement between two or more entities that creates or modifies a legal relationship.
33. Cooperating Broker: A real estate broker who registers a prospective buyer with the auction company, paid a commission only if their prospect is the high bidder and successfully closes on the property.
34. Critical Path: The sequence of key tasks to be done by the auction contractor or other designated parties on specified dates, leading to desired goals.
35. Dual Agency: The representation of both the buyer and the seller by the same agent in a transaction.
36. Due Diligence: The process of gathering information about the condition and legal status of assets to be sold.
37. Estate Sale: The sale of property left by a person at their death, which can include both personal and real property.
38. Gavel: A small mallet used by an auctioneer (or judge) to signal the start or end of proceedings, including the acceptance of the final bid at an auction. The sound of the gavel signifies the conclusion of bidding and the official sale of the item.
39. Graduate Personal Property Appraiser (GPPA): A professional designation for qualified property appraisers who meet educational and experiential requirements.
40. Hammer Price: The final bid accepted by the auctioneer, indicated by dropping the hammer or gavel.
41. Listing Agreement: The contract between the seller and the auctioneer establishing the terms of the auction, including commission and reserve price.
42. Livestock Marketing Association (LMA): An association committed to supporting and protecting local livestock auctions.
43. Minimum Bid Auction: An auction where bids must start at or above a disclosed minimum price.
44. Minimum Opening Bid: The lowest acceptable amount at which bidding must commence.
45. Multi-Property Auction: A group of properties offered through a common promotional campaign, which can be owned by one or multiple sellers.
46. No-Sale Fee: A fee charged to the seller if the property does not sell at a reserve auction.
47. NAA: The National Auction Association is the world’s largest professional association dedicated to auction professionals, representing thousands of members across the U.S., Canada, and globally. Founded in 1949, its mission is to serve auction entrepreneurs by providing services centered around four key cornerstones: promotions, advocacy, education, and community.
48. Opening Bid: The first bid made at the auction.
49. Preview: A specified date and time when the property is available for prospective buyers to view before the auction.
50. Reserve Price: The minimum price that a seller is willing to accept for a property being sold at auction.
51. Sealed Bid: A bidding method where bids are submitted confidentially and opened simultaneously by the auctioneer.
52. Terms and Conditions: The legal terms that govern the conduct of an auction, often included in advertisements or announced by the auctioneer