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A
AARE
(Accredited Auctioneer, Real Estate)
The professional designation awarded by the National Auctioneers
Association to qualified real estate auctioneers who meet the
educational and experiential requirements of the Association and who
adhere to a strict code of ethics and standards of practice.
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 auction company 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, No Warranties Implied or Expressed.”
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 auction company and the seller which
authorizes the auction company or 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 Marketing Institute
Founded in 1976, this international association awarded the
professional designations CAI, GPPA and AARE to properly qualified
auctioneers through education, experience, and adherence to a strict
code of ethics and standards of practice. Now managed by the
National Auctioneers Association.
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
(See "Reserve Auction.")
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.
Auction Without Reserve
See Absolute Auction.
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.
Ballroom Auction
An auction of one or more properties conducted in a meeting room
facility.
B
Bank Letter of Credit
A letter from a bank certifying that a named person is worthy of a
given level of credit. Often requested from prospective bidders or
buyers who are not paying with currency at auctions.
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 identity, 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 ring men, bid consultants, bid spotters, or grounds men.
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 Package
The package of information and instructions pertaining to the
property to be sold at an auction event obtained by prospective
bidders at an auction. Sometimes called a bidder packet or due
diligence package.
Bidder's Choice
A method of sale whereby the successful high bidder wins the right
to choose a property or properties from a grouping of similar or
like-kind properties. After the high bidder's selection, the
property is deleted from the group, and the second round of bidding
commences, with the high bidder in round two chooses a property,
which is then deleted from the group and so on, until all properties
are sold.
Bookkeeper or Clerk
The person who is responsible for the accounting and paperwork at an
auction sale.
Broker Participation
An arrangement for third-party brokers to register potential bidders
for properties being sold at auction for a commission paid by the
owner of the property or the auction firm.
Buyer's Broker
A real estate broker who represents the buyer and, as the agent of
the buyer, is normally paid for his/her services by the buyer.
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.
C
CAGA
Certified Appraisers Guild of America
The professional designation awarded to practicing appraisers who
meet and maintain the experiential, educational and ethical
standards set by the Certified Appraisers Guild of America.
CAI Certified Auctioneers Institute
The professional designation awarded to practicing auctioneers who
meet the experiential, educational and ethical standards set by the
National Auctioneers Association.
Caravan Auctions
A series of on site auctions advertised through a common promotional
campaign.
Carrying Charges
The costs involved in holding a property which is intended to
produce income (either by sale or rent) but has not yet done so,
i.e., insurance, taxes, maintenance, management.
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
term/expression
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/company 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/auction company 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.
Cooperating Broker
A real estate broker who registers a prospective buyer with the
auction company/auctioneer, in accordance with the terms and conditions for
that auction. The broker is paid a commission only if his prospect
is the high bidder and successfully closes on the property. Also
known as a participating broker.
Critical Path
Sequence of key tasks to be done by auction contractor or other
designated parties on specified dates, leading to desired goals.
D
Due Diligence
The process of gathering information about the condition and legal
status of assets to be sold.
E
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.
F
G
Graduate,
Personal Property Appraiser (GPPA)
The professional designation awarded by the National Auctioneers
Association to qualified property appraisers who meet the
educational and experiential requirements of the Association and who
adhere to a strict code of ethics and standards of practice.
Groundsman
See Bid Assistants.
H
Hammer
Price
Price established by the last bidder and acknowledged by the
auctioneer before dropping the hammer or gavel.
I
J
K
L
Listing
Agreement
See Auction Listing Agreement.
Listing Broker
A real estate broker who has a listing on a property and cooperates
with the auction company by allowing the auction agreement to
supersede his/her listing agreement.
M
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.
Memorandum
Sometimes also referred to as a "Bidder Acknowledgment,"
or "Broker Acknowledgment," the memorandum is signed by
those parties either on the auction floor or in the contract room.
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-Property Auction
A group of properties offered through a common promotional campaign.
The properties to be auctioned may be owned by one seller or
multiple sellers.
Multi-Seller Auction
Properties owned by many sellers, offered through a common
promotional campaign are auctioned in a single event.
N
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.
National Real Estate Auction Committee
A national committee developed by the NATIONAL ASSOCIATION OF
REALTORS in April, 1990 to provide education to members concerning
real estate auctions, identify issues and monitor, review and
analyze trends affecting the real estate auction industry. It also
is charged with formulating policies for consideration by other
policy-making NAR Committees, its Executive Committee and Board of
Directors.
No-Sale Fee
A charge paid by the owner of property offered at a reserve auction
when the property does not sell.
O
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.
P
Participating
Broker
See Cooperating Broker.
Preview
Specified date and time property is available for prospective buyer
viewing and audits. Also known as Open House or Inspection.
Q
R
Referring
Broker
A real estate broker who does not have a listing on a property, but
refers the auction company to a potential seller for an auction.
Usually earns a flat fee commission for referring product to an
auction company.
Regroup
A process used in real estate auctions where a bidder has the
opportunity to combine several parcels of land previously selected
by other bidders, thereby creating one larger parcel out of several
smaller parcels. This process is often used in conjunction with
bidder's choice.
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.
S
Sale
Manager
The person designated by the auction company who is responsible for
organizing the details of an auction. Also known as project manager.
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.
Subject to Confirmation
See Reserve Auction.
T
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.
Transaction
Broker/Agent
When a real estate licensee operating as a transaction broker
discloses to buyers and sellers their role in providing a limited
form of representation. Limited representation means that a buyer or
seller is not responsible for the acts of the licensee.
Additionally, parties are giving up their rights to the undivided
loyalty of the licensee. This aspect of limited representation
allows a licensee to facilitate a real estate transaction by
assisting both the buyer and the seller, but a licensee will not
work to represent one party to the detriment of the other party when
acting as a transaction broker to both parties.
Trustee's Sale
A sale at auction by a trustee.
U
Upset
Price
Commonly known as the reserve price.
V
W
Withdrawal
Failure to reach the reserve price or insufficient bidding.
X
Y
Z
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