What to do at an auction

Many auction attendees find the experience addictive. They report that there’s nothing quite like the thrill of finding something they want and then bidding against others who want the same thing.

But you don’t have to be a seasoned auction attendee to be able to experience the thrill of auctions. Auctioneers across America are glad to welcome new bidders to their auctions. And though almost everyone has heard the old story about the person who attended an auction, scratched his nose and came home with an item he’d not intended to buy, pay no heed to that myth.

"People who have never been to an auction before should certainly give it a try," said John Roebuck, CAI, AARE. "Don’t be intimidated — go and have fun!"

Feel free to just get your feet wet — don’t think you have to go to your first auction ready to bid. Attend an auction or two in your area to get a feel for how they are conducted. Watch and listen, then move on to bidding if that makes you comfortable.

Many auctioneers spend some time addressing commonly asked questions and explaining how the auction is going to work. Some even conduct pre-auction or practice sessions, or brief tutorials, about the auction process. If you’re interested in going to your first auction, check with local auctioneers to see if they offer such a service.

Always remember that at an auction you’re free to ask a question if you don’t understand something. Auctioneers and their staffs want people to continue to come to their auctions, so they’ll do all they can to encourage repeat business! Ask a question of a member of the auctioneer’s team, and they’ll find the answer for you.

When you arrive an auction site, register for a bidder number and read the rules printed on or displayed on posters, brochures or handouts. Again, ask questions if you don’t understand a policy. Inspect the merchandise you’re interested in, as most is auctioned on an "as is, where is" basis. This means it is not guaranteed. When you buy an item, you become responsible for it. And, keep in mind that you’ll pay for the items you purchase before you leave the auction, even if you aren’t taking everything with you that day.

In order to bid at an auction, you need to make contact with the auctioneer or the ringperson. A ringperson is someone who takes bids from the audience and then passes those on to the auctioneer. To bid, hold up your bid card, your hand or shout "yes." The auctioneer or ringperson will make eye contact with you, take your bid and immediately turn and seek another bid. You can remove yourself from the process at any time by shaking your head "no" or saying "no" if the auctioneer or ringperson turns your way. Should an auctioneer or ringperson misinterpret any of your signals, simply report the mistake right away.

 

Glossary of Auction Terms

Absentee Bid
 
A procedure which 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 his representative. The particular rules and procedures of absentee bids are unique to each auction company.
Absentee Bidder
 
A person (or entity) who does not attend the sale but submits, in advance, a written or oral bid that is the top price he or she will pay for a given property.
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.
Accounting
of Sale
 
A report issued to the seller by the auctioneer detailing the financial aspects of the auction.
Agent
 
A person who acts for or in the place of another individual or entity by authority from them.
Appraisal
 
The act or process of estimating value.
Apprentice
Auctioneer
 
An auctioneer who is in training, operating under the supervision of a licensed or experienced auctioneer.
“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 referred to as: public auction, auction sale or 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, he or she may not actually conduct the sale but is directly responsible for all aspects of marketing the property.
Auction
Marketing
 
The method of marketing real property 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 Subject
to Confirmation
 
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.
Auction Value
 
The price which a particular property brings in open 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.
Bid A prospective buyer's indication or offer of a price he or she will 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 identify, the bid price and the description of the property. Also known as Memorandum.
Bid Assistants
 
Individuals who are positioned throughout the attendees at the auction to assist the auctioneer, spot bidders and assist prospective bidders with information to help them in their buying decision. Also known as ringmen, bid consultants, 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.
Bidder Number The number issued to each person who registers at an auction.
Bidder's Choice A method of sale whereby the successful high bidder wins the right to choose an item or items from a grouping of similar or like-kind properties. After the high bidder's selection, the item is deleted from the group, and the second round of bidding commences, with the high bidder in round two choosing an item, which is then deleted from the group and so on, until all items (at the auctioneers discretion are sold.
Bookkeeper
or Cashier
 
The person who is responsible for the accounting and paperwork at an auction sale.
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.
Catalog or
Brochure
 
A publication advertising and describing the property(ies) available for sale at public auction, often including photographs, property descriptions, and the terms and conditions of the 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.
Clerk The person 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.
Contract An agreement between two or more persons or entities which creates or modifies a legal relationship.
Critical Path Sequence of key tasks to be done by auction contractor or other designated parties on specified dates, leading to desired goals.
Due Diligence The process of gathering information about the condition and legal status of assets to be sold.
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.
Hammer Price
 
Price established by the last bidder and acknowledged by the auctioneer before dropping the hammer or gavel.
Market Value The highest price in terms of money which 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.
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.
Minimum
Opening Bid
 
The lowest acceptable amount at which the bidding must commence.
Multi-Seller Auction
 
Properties owned by many sellers, offered through a common promotional campaign are auctioned in a single event.
National
Auctioneers
Association
 
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.
Opening Bid The first bid offered by a bidder at an auction.
On-site Auction An auction conducted on the premises of the property being sold.
Preview
 
Specified date and time property is available for prospective buyer viewing and audits.
Reserve The minimum price that a seller is willing to accept for a property to be sold at auction. Also known as the reserve price.
Reserve Auction
 
An auction in which the seller reserves the right to establish a reserve price, to accept or decline any and all bids or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer. See also Auction With Reserve.
Sealed Bid A method of sale utilized where 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 market place.
Seller Entity that has legal possession, (ownership) of any interests, benefits or rights inherent to the real or personal property.
Tax Sale Public sale of property at auction by governmental authority, due to nonpayment of property taxes.
Terms The period of time that an agreement is in effect.
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 and must be resolved by the auctioneer.
Trustee's Sale A sale at auction by a trustee.
Upset Price Commonly known as the reserve price.
Withdrawal Failure to reach the reserve price or insufficient bidding.