AUCTION: From the Latin auctus, meaning “an increase,” the process of selling goods by offering them to a group of people, who compete for ownership through bidding, the highest bid determining the winner of said goods. Auctions are designed to achieve the highest price possible for goods that are rare and/or highly desired, to set the fair market value on abundant goods, or to establish a value for goods that have an undetermined or variable price.
Absentee (Proxy) Bid: Just as you don’t have to be in town to vote, you don’t have to be at the auction to bid. Absentee bids are left with the auction company when you can’t attend the sale. Different galleries employ different policies governing their implementation, but usually your absentee bid would reflect the maximum amount you are willing to pay for the items you list on the form. The auction company then bids for you against any attending bidders.
Absolute Auction: This is an auction sale at which all items offered must be sold to the highest bidder, so long as said items receive at least one bid. There can be no reserves at an absolute auction. An auction is only absolute if it is advertised or announced as such. If an auction is not specified as being absolute, then it is automatically an auction with reserve.
Auctioneer: Much like a Master of Ceremonies, an auctioneer regulates the progression of an auction by introducing each item in turn, by calling for and accepting bids, and by announcing the final price of each item and to whom it was sold.
Auction Gallery/House: The permanent base of operations for an auction company at which regular auctions are conducted.
Bid: A monetary amount offered by those who desire to own the items in an auction. The increment of advancement for bidding is set and called by the auctioneer.
Bidding Card (Paddle): A card or paddle with a number on it that corresponds to the name of its user. Cards and paddles are used to keep track of who buys what at an auction.
Block: When something is offered for bidding, it is said to be placed upon the auction block. This has evolved into a figurative term. “On the block” has come to mean an item that is “up for bid now.”
Boxlot: Simply put, a boxlot is a bunch of stuff thrown into a box and sold all together as one lot. It can even be a box filled with other boxes that contain other boxes which hold even smaller boxes… etc.
Buy-Back: In Pennsylvania, this is a totally illegal practice in which a consignor bids on his own items in order to drive up the price and he ends up retaining ownership because he’s a greedy dumb-ass. In this instance, the auctioneer is also a moron for allowing it to happen.
Buyers’ Premium: A fee added to the final price of an item sold at auction that is paid by the buyer of that item. Buyers’ Premiums can range from as little as 10% to as much as 25%.
Chant: The fast-paced, sing-song calling of numbers and bid advances used by an auctioneer.
Choice: The situation in which more than one item is offered for bidding, but the final price realized is per item and not for the group. The high bidder has his choice of which item he can pick from the group. Should he pick more than one item from the group, the final price the bidder pays is equal to the high bid times the number of items he takes.
Catalog: A listing and description of items in an auction and the order in which they will be offered.
Clerk: At an auction, the person who keeps track of the buyer and final price of each item offered.
Commission: The fee charged and/or percentage of the final selling prices taken by an auction company as payment for selling said items.
Consignment: This is an item or items taken under contract by an auction company. The auction company represents the owner of said items and acts as the selling agent. Details such as commission and/or reserves are points listed in the contract between the auction company and the consignor.
Escrow Account: An escrow account is required for the sole purpose of depositing and holding monies belonging to consignors. It is unlawful for an auctioneer to commingle money belonging to others with his own personal or company funds.
Gavel: The mighty hammer of an auctioneer, which is struck to announce the sale of an item after all bids have been taken and no further advances in price have been offered. Once the gavel is struck, a legal agreement exists between the high bidder and the auctioneer, in which the auctioneer is obligated to sell the item and the high bidder is obligated to pay for the item.
Knock-down: The moment at which an item is declared sold by the auctioneer and no further bids can be taken.
Lot: Anything that is offered for bidding. A lot can be one item or many. A lot can be a vase or a dining room suite. It can be a large group of stuff or even an empty tract of land.
Opening (Starting) Bid: The amount at which the bidding for an item must begin before any advance in price can be recognized.
On Site/On Location: An auction at which the items being offered are not removed to an auction gallery, but are sold at their original location.
Preview/Inspection: The specified date and time property is available for prospective buyers’ viewing and inspection before an auction.
Reserve: The amount an item must achieve through bidding before it can be sold.
Any auction not advertised as absolute is automatically an auction with reserve, in which the auctioneer has the right to accept or reject any or all bids on any item, even when that item does not have a specific dollar amount for a reserve. Therefore, the concept of reserve can be broken down into two categories: specific reserve and theoretical reserve.
When an item has a specific reserve, it has a certain dollar amount which must be achieved before the auctioneer can sell it. For example, a dining room with a specific reserve of $2,000 would not be sold until the bidding reached or exceeded that figure. It is at the discretion of the auction company whether or not to reveal any reserves before an item is offered.
An item that has a theoretical reserve does not have a specific dollar amount at which it can be sold, but instead has a certain price range in which the auctioneer feels it should fall. For example: A Lionel O27 engine is offered at auction with no specific reserve. However, the same engine in the same condition offered during recent auctions has repeatedly brought a high bid between $250 and $300. For whatever reason, the day that this particular engine is offered, the bidding stops at $100. It has fallen way short of its normal selling price, so the auctioneer decides not to sell it. Not only does he have a legal right to pull the item off the block, but he also has a responsibility to the seller to do so.
Ring: The area within an auction gallery in which an auction is being conducted. Several auctions may occur simultaneously at several different rings within the same gallery. This usually happens when there is a large amount of merchandise that can be categorized and separated to suit the different buying niches of the bidders.
Ringman: A person who works the floor within a ring. A ringman has several duties:
- To help display and make clear to the bidders the merchandise being offered.
- To aid the bidders in relaying their advances to the auctioneer.
- To aid the auctioneer in taking bids that may be out of the auctioneer’s line of sight.
- To ease, in general, communication between the bidders and the auctioneer.
Shill: Another illegal practice in which a person is placed into the crowd by the auction company to artificially inflate and advance bidding.
Times the Money: A situation in which a lot has multiple items and the bidders offer a price per item. The final bid is multiplied by the number of items in the lot. For example, a lot that contains six mahogany chairs can be sold “so much a piece, times six.” Should the bidding close at $50 a piece, the final selling price for the set of chairs would be $300.
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