Auction Terminology

Like any field auctions have their own terms, many that apply to both online and in-person auctions. If you’re going to take part as either a bidder or a seller, it definitely helps to speak the language. A guide to the terminology will guide you on your way.

Main Types Of Auction

Absolute Auction

The seller sells to the highest bidder, regardless of price.

Dutch Auction

When several copies of the same item are up for auction individually, each going to the highest bidder for it. However, traditionally in a Dutch auction the auctioneer starts with a high price that’s lowered until someone is willing to bid.

English Auction/Straight Auction

The familiar, standard type of auction. A starting price is set, and the bids increase until only one bidder remains, who is then the winner.

Private Auction

A standard auction, except the identities of the bidders is kept secret.

Reserve Auction

An auction where the seller sets a “reserve” price on the item. If the bidding doesn’t go that high the seller is under no obligation to sell the item, although he can sell to the highest bidder at his discretion.

Sealed Bid Auction

The bidders all submit their bids for an item at the same time, each one sealed in an envelope. The winner has the highest bid when the envelopes are opened.

Silent Auction

Like an English auction, but the bids are submitted on pieces of paper, silently (as you’d expect).

Auction Terms

Absentee Bid

A bid left with the auctioneer by a bidder who cannot attend the auction.

Appraisal

The estimate of value of an item.

As Is

The item is sold as seen, with no guarantee as to condition or whether it works.

Auctioneer

The person conducting the auction.

Bank Letter of Credit

A letter from a bank or financial institution stating that the person named has credit up to the amount stated.

Bidder Card or Paddle

Used at some auctions. When a buyer registers, he is given a numbered card or paddle, and raises this to bid. The number identifies him.

Catalogue

A publication put out before major auctions with pictures of descriptions of the items for salep.

Caveat Emptor

From the Latin, literally meaning “let the buyer beware.” In practice, the same as “as is.” If you buy and it doesn’t work (unless it was said to be working), then tough luck.

Commission

The fee paid by the seller to the auction house for selling the item.

Conditions of Sale

All the conditions that apply to an auction, from commissions to payment.

Escrow

Money held in a trust account by a third party until the item is delivered and deemed to be satisfactory, after which it’s released to the seller.

Lot

Each item(s) up for auction.

Jump Bid

Increasing the bidding by a large amount.

Knocked Down To

Sold to.

No Reserve

An item sold at auction without a reserve price.

Outbid

To bid higher than the previous person.

Provenance

The proof of authenticity of an item as well as its history of ownership.

Proxy Bid

A bidder uses a third party, either another bidder or an employee of the auction house, to place bids for him during the auction.

Starting Price or Opening Bid

The opening bid necessary for the auction.