Auction Terminology - Alliance Auctioneers

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Auction Terminology

Absentee Bid

A procedure which allows a bidder to participate in the bidding process without being physically present. A bidder submits an offer prior to the auction.

Absolute Auction

The property sells to the highest bidder regardless of price. There is no reserve price. This typically generates a much greater interest among potential buyers resulting in greater attendance at the auction, and a higher final sale price for the item being offered for sale.

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.

Bid Increment

The minimum dollar amount that the current bid increases in price after each new bid.

Buyer’s Premium

An amount (usually a percentage) that is added to the winning bid (hammer price) to determine the contract selling price which the buyer pays for the property being sold. The use of the buyer’s premium is effective because it benefits both the buyers and the sellers. Sellers benefit because it helps to defray many of the rising expenses associated with conducting an auction. The buyer benefits because without the use of this tool, there may not have been an auction for which they could purchase the unique property being offered.

Buyer’s Number

Each prospective bidder will be required to register prior to bidding at the auction. There is no charge to register for our auctions. Our registration staff will issue you a specific number that will represent your account for that auction. The auctioneer will call and item sold and call out your bidder number so our staff will know who to invoice that lot too. When you are satisfied that your purchases are complete you may check out and pay one invoice with all of your days purchases.

Catalog

This is the comprehensive list of all items in an auction. All of our auctions will provide a catalog that will include the lot number and description of each item being offered. Unless otherwise announced, Alliance will follow the auction day catalog in numerical order from start to finish. Our staff estimates the number of catalogs we will need for each auction, arrive early to make certain you receive a catalog for auction day.

Choice

When selling choice, the auctioneer is offering more than one item up for auction at a time. The winning bidder then has the choice to take one item or multiple items. If the bidder wishes to take more than one item, the bid price will be multiplied by the amount of items the bidder chooses.

Extended or Dynamic Bidding (Online Auctions)

Auctions may extend the bidding time on any lot that gets a bid within a certain amount of time of its scheduled closing time. The auction will remain open for those lots until no bids are placed in the allotted amount of time. All lots not receiving a bid in the final minutes will close at the normal time. The auctioneer will determine the number of minutes necessary to activate dynamic bidding ahead of time.

Force Bid/Jump Bid

“Forced Bid/Jump Bid” is a bidding strategy by which a bidder increases the bid by more than the next accepted bid (placing your bid at $150 when the next accepted bid is $125). This practice is used by some bidders to discourage others from bidding in hopes of acquiring an item at a lower price. There are many theories on the effectiveness of this practice and a bidder who wishes to apply it does so at their own discretion. The auctioneer will not lower the price of an item that has been won by a “forced” bid with no other competing bids.

Live Auction

An auction that takes place at a designated place and time, where bidders can browse the auction lots and place their bids in person with an auctioneer calling bids and leading the process.

Lot

A group of items or a single item that are sold together at auction. Lots are determined before the auction and only the auctioneer can divide a lot. Each lot in an auction is numbered.

Maximum Bid

The maximum amount you are willing to pay for a lot. The price will only increase by the minimum increment, but will automatically raise to your maximum bid as others bid up the lot over time.

Online Only Auction

A timed auction where bids can only be placed over the Internet. No live bidding available.

Property Information Package (PIP)

This is the comprehensive information package for property being offered at auction. It will typically include all the due diligence buyers or agents would normally need to gather on their own. A PIP may include surveys, home inspections, comparable sales, a sample purchase contract, water well information, aerial boundary maps, soil maps, topographical maps, disclosures, specific auction information and the terms and conditions of the auction.

Purchase Contract or Earnest Money Contract

This is the legal, binding agreement between the buyer and seller that outlines the agreed terms of the purchase of real estate. This document will be signed by both parties following the auction and receipt of the escrow money. Alliance will always provide a copy of the Purchase Contract weeks in advance for buyers to review prior to the actual auction.

Reserve Price

The lowest price the seller is willing to sell the item. If the reserve price is not met at the auction, the item will not be sold.

Simulcast/Hybrid Auction

Live and online interactive bidding at the same time.

Staggered Closing

Auctions that begin to close and progress at a certain rate of lots instead of at one specific time. For example, an auction will close five lots every five minutes beginning at a certain time. This will be listed in the terms of the auction.

Multi – Parcel bidding system

The Multi-Parcel or “Multi-Par” system is a bidding system that allows selling in a combination format. It allows bidders to bid on individual lots or a combination of lots (usually parcels of land) throughout the auction. This system was developed to consolidate multiple bidding combinations and provide interested buyers the ability to configure their own combinations.