A to Z AUCTION TERMINOLOGY
The auction world is a dynamic environment where a wide array of items are sold in a public forum. It can even seem like a mysterious culture especially for newcomers who want to participate in selling and/or buying. Without knowing some of the auction vernacular, it can be a challenge to understand a sale. But have no fear - below is a glossary of frequently used auction terms that can be referred to by novices and veterans of the auction business alike.
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 a lot prior to the opening of the auction. The bidding system will attempt to execute absentee bids at the lowest increment possible. Absentee bids are usually handled under established guidelines set by the auction house.
Absentee Bidder: An individual who may not be present during the auction but submits the highest amount that he/she will pay for a given lot in advance of the sale going live.
Accounting of Sale: A summary issued to the consignor by the auction house which reports the financial aspects of their consignment's auction results.
Agent: An individual who acts on behalf of a client or entity.
Appraisal: A formal opinion of value impartially prepared by a qualified appraiser and prepared in accordance professional standards. The opinion is rendered after taking into consideration several factors including but not limited to type of value or cost required, object identification, and analysis of relevant market information. Learn more about Appraisals here.
As Is: The property is sold with all existing faults and imperfections. Potential buyers are encouraged to either inspect in person or request a condition report before the sale.
Auction: A method of selling property in a public forum through open and competitive bidding.
Auctioneer: A trained professional who presides over the auction, initiating the sale of a lot by describing the item and starting the bidding. Once the first bid is made, others may offer higher bids. Bidders may be present in the saleroom, on the phone, or online. Auctioneers also place bids on behalf of absentee bidders and determine when the highest bid has been made. If a work sells, the auctioneer announces, “sold.” If the item does not meet its reserve or there are no bidders, the auctioneer signifies this with a “pass.”
Auction Block: The podium or raised platform where the auctioneer stands while conducting the auction.
Bid: A prospective buyer's indication or offer of a price they are willing to pay for a lot at auction. Bids are usually in standardized increments established by the auctioneer.
Bidder Number: The number assigned to each person registering to participate in an auction sale.
Bid Increment: The standardized amount an item increases in price after each new bid. The auction house sets the increment, which rises according to the present bid value of an item.
Bought-In: If there are no bids on a lot or if bidding does not reach the reserve price, the lot is “bought in,” meaning it is left unsold and remains the property of the owner
Buyer's Premium: A percentage that is added to the winning bid and constitutes part of the purchase price. For instance, if the buyer's premium is 25% and you bid $100 for an item, then the total before applicable sales tax is $125.
Catalogue: In the context of an auction, the catalogue (or catalog) is the publication of the property available for a particular sale. The catatlogue can be in print and/or online and often includes images, brief written descriptions, and terms of sale.
Clerk: The individual employed by the auction house to record what is sold to whom and for what hammer price.
Commission: The fee charged to the seller by the auctioneer for providing consignment services. Sometimes referred to as a seller's commission, this fee is usually a percentage of the gross hammer price of the property established by contract prior to the auction.
Conditions of Sale: The terms that govern the conduct of an auction, including acceptable methods of payment, terms, buyer's premiums, possession, reserves, etc. Also known as "Terms and Conditions," these terms are usually included in published on an auction house's website, catalogue, and/or announced by the auctioneer prior to beginning the sale.
Condition Report: A written description of the condition of an object or work of art. More detailed condition reports are usually available upon request by potential buyers prior to the auction sale day.
Consignee: The entity (e.g. auction house) to whom goods are entrusted by another (e.g. consignor) for sale.
Consignor: The owner or authorized agent/entity that transfers property to the auctioneer to act as agent on his or her behalf in the sale of the property. A consignor to an auction is sometimes referred to as the "seller."
Estate Auction: The sale of property left by a person at his or her death.
Exhibition History: A listing of museum or gallery exhibitions in which a given lot has appeared. Inclusion in important exhibitions may impact the value of the item.
Fair Market Value: Generally understood to be the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts. Also refered to as FMV, fair market value is not to be determined by a forced sale nor by a sale price of the item in a market other than that in which such an item is most commonly sold to the public taking into consideration the location of the item wherever appropriate. Fair market value includes the buyer’s premium but not sales tax and/or shipping costs. The definition may vary depending on the jurisdiction.
Fair Warning: A warning sometimes given by the auctioneer that the bidding is about to close on a lot. The fair warning offers one a last minute chance to increase the bidding. If there are no subsequent bids, the auctioneer’s hammer falls and the lot sale is completed.
Hammer Price: The selling price established by winning bid for a lot and acknowledged by the auctioneer before dropping the hammer/gavel to indicate a sale is completed. Hammer price does not include the buyer's premium or applicable sales tax.
Increment: The amount by which the auctioneer increases the bidding. Most auction houses have standard increments used and are frequently listed in the catalogues or online; however, an increment may be rounded up or down at the auctioneer's discretion
Lot: An item or group of items offered for sale at auction as a single unit and often assigned by a lot number for easy identification during the auction.
Market Value: The most common price that a property will bring in a competitive and open market under all conditions requisite to a fair sale, with a knowledgeable buyer and seller, and assuming the price is not affected by undue stimulus.
Minimum Opening Bid : The lowest starting predetermined amount that will be accepted by the auctioneer to begin the sale of a lot.
Online Only Auction: An auction that is conducted online only and not in front of a live audience. Interested buyer must typically register before the start of the sale in order to participate in the bidding.
Opening Bid: The first bid offered by a bidder at an auction. An opening bid may or not be the minimum opening bid (see definition above).
Paddle: The traditional name for an implement given to each bidder at the registration desk. The paddle (or card) will contain the number assigned to each bidder for a particular sale. When a buyer wants to place a bid, he/she raises the paddle until the auctioneer acknowledges the gesture. The winning bidder's paddle number is recorded by the auction clerk.
Pass/Bought In/Unsold: These are various terms used by the auctioneer when an item fails to reach its reserve price during an auction.
Preview: Specified date(s) and time(s), that property is available for viewing to prospective buyers in advance of the sale.
Pre-Sale Estimate: An estimated value range that a lot is expected to sell at auction. These estimates are an approximate guide and should not be interpreted as a definite selling price. Estimates are determined by specialists in advance of the auction and are subject to revision prior to the sale. Revisions to the estimates may occur due to condition issues, new research, changes in attribution, etc. The pre-sale estimate provides prospective buyers with a general guide to value and consignors with a basis for setting the reserve. (Note: A pre-sale estimate should not be confused with an appraisal, which is a formal and objective opinion of value, frequently written in a report for insurance, estate and tax purposes.)
Provenance: An item's chain of ownership back (if possible) to the date it created. Provenance has become increasingly important in the auction world and can significantly impact the value of an object. For instance, an interesting or unusual provenance can add to the value of an item, such as when an item was previously owned by someone historically or culturally famous. Proof of provenance is critically important with substantiation needed for any hearsay or family legend.
Proxy Bid : An agreement or directive which allows an authorized individual to submit binding bids on behalf of another.
Reserve: The minimum value agreed upon between the consignor and auction house that property may to be sold. Reserves must be set at or below the low estimate; if bidding ends before the reserve is reached, the property will not be sold. Most auction houses keep reserves confidential. Also, buyers should assume that all lots are sold subject to reserve unless otherwise stated.
Sale Number: A unique number given to each auction to distinguish it from previous and subsequent sales of similar properties. Most auction houses will have their own numbering system for their sales.
Seller’s Commission: A commission paid by the consignor to the auction house, which is deducted from the hammer price and other agreed expenses.
Seller: See definition of consignor.
Specialist: A professional hired by the auction house who is knowledgeable and experienced in a specific field of collecting. Specialists usually work withing a category department and may handle cataloging and/or setting pre-sale estimates.
Telephone Bidding: Buyers who participate in live bidding bid via phone. Usually, an auction representative who is present in the saleroom to relay bids to the auctioneer on the buyer's behalf.
Uniform Standards of Professional Appraisal Practice (USPAP): USPAP is considered the quality control standards in real property, personal property, intangibles and business valuation appraisal analysis and reports in the U.S. and its territories. USPAP was first developed in the 1980s by a joint committee representing the major U.S. and Canadian appraisal organizations. Most qualified appraiser will be current in their USPAP compliance and state accordingly in their final report.
Withdrawn: A lot that has been removed from an auction prior to live bidding.
White Glove Sale: An auction where every single lot sells resulting in a 100% sell-through rate.
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© Courtney Ahlstrom Christy
Ahlstrom Appraisals LLC provides personal property appraisals and art consultations serving Atlanta and the Southeast region.
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