Mar 1, 20206 min read

Auction 101 – Auction Terminology & Lingo

Updated: Aug 6, 2020

Hello and welcome to another edition of my “Josh Levine Speaks Blog.” I got a great one for you, if you are in to, or want to get in to, the World of Auctions. I call it Auction 101 – Auction Terminology & Lingo. If your new to my blog & YouTube Channel, Josh Levine Speaks, you will find I tend to focus on The Auction World and its subculture. Really, everything about The World of Downsizing & Liquidation, Estate Sales, Yard Sales and How to Make Money in the Niches and Genres you may not know about. Let’s just say, the Secondary Market. So... If this sounds good to you, before you leave, Subscribe to my blog and or YouTube Channel. I gotcha covered if you are a reader or watcher. I love feedback so make sure to share, leave comments or contact me direct. All my social media and direct contacts are here. That way I know what you like and want more of. It’s you that give me show topics and amazing ideas. So, thank you, and I hope you enjoy…

Let’s get started….

Auction 101 – Auction Terminology & Lingo

Absentee Bid: A procedure that 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 auction company. The particular rules and procedures of absentee bids are unique to each auction company.

Appraisal: A formal evaluation of the fair market and/or insurance value of a given property. Fair market value represents what the appraiser believes an item would bring at auction. Insurance value reflects what we believe it would cost to replace an item.

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 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.

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.

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 History: A historical list of all the bids made on a particular auction during or after the auction.

Bid Increment: The amount by which the auctioneer increases the bidding. This may be a standardized amount an item increases in price after each new bid. In an online only, the auction company generally sets the increment, which rises according to the present high bid value of an item. In a live sale, the figure is generally rounded up or down at the auctioneer's discretion.

Bidder (Paddle) Number: The number issued to each person who registers at an auction.

Buyers 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 winning bidder / buyer.

Catalog: A listing of known factual information about a lot offered for sale, such as the name of the artist or maker, a detailed description of the object, the year of its creation, its provenance. (i.e. history of its ownership)

This may be in both actual print and or online formats.

Choice: A term alerting bidders to the fact your highest and best bid, should you be the winner will grant you “choice” of a variety of single lots and groupings predetermined by the auctioneer. You may take 1 or more, or all…at your bid “times the money.”

Clerk: An individual employed by the principal auctioneer or auction firm to record what is sold and to whom and for what price. I call them the “court stenographer” of the auction.

(Great rule here….never talk to the clerk at an auction.)

Condition Report: A written description of the condition of a work. These days, generally an email from an expert at the auction house or firm.

(Again, when requesting one, remember, they can be subjective….your idea of “good condition” may not be mine.)

Conditions of Sale or Terms and Conditions: 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.

Auction Estimate: Some companies use them, some do not. It’s a process, were each lot is given a low to high estimate, representing the opinion of experts about the range in which the lot might sell at auction. Estimates are based on the examination of an item and recent auction records of comparable pieces. Generally Published online and/or in a printed catalog, an estimate provides prospective buyers with an important preliminary guide to value and is generally the basis for establishing some sort of reserve price, should there be a reserve.

(Remember, this is not an appraisal.)

Fair Market Value: A term frequently used by appraisers referring to their judgment and opinion about an object’s likely sale price if offered by a willing seller to a willing buyer. Since the auction process is open to all bidders, a sale at auction is considered by most to be a good measure of The Fair Market Value.

Fair Warning: A warning sometimes given by the auctioneer that the hammer is about to come down on a lot. The fair warning offers one last chance to increase the bidding. If there are no subsequent bids, the auctioneer’s hammer falls, and the sale is completed.

Hammer Price: Price established by the highest bidder and acknowledged by the auctioneer before dropping the hammer or gavel.

Opening Bid: Is the increment that the bid is opened up at by the Auctioneer. Many auction companies will start the bidding increment with the current online pre-bid, should that exist. If there are no left bids on an item, the Auctioneer may open the bidding at 25% of the low estimate or what he or she feels necessary to get the bidding started.

Preview or Presale Exhibition: An auction may place lots from its upcoming sale on public display in the days or weeks before an auction. Generally, these exhibitions are free and open to the public and you are highly encouraged to attend to garner your own opinion.

Provenance: An important part of the authentication process, provenance establishes the chain of ownership back (if possible) to the date an item was created. Provenance can significantly impact the value of an object.

Runners & Spotters: Auction staff dedicated to being on point for the auctioneer. To spot bids, assist bidders in clarification of where the bid is at and get the attention of the auctioneer for them. Last minute previewing and presentation of the item up for bid and perhaps the soon to be, on the block.

Times the Money: A term alerting bidders to the fact their winning bid will be times the number of units available. There may or may not be a minimum quantity, so pay attention to this term closely. If you hear “you must take 5” or “take them all” you could be in quite a pickle. Just ask for clarification.

Traditional Auction: An auction that is conducted in front of a live audience at a physical location where the items for sale are located.

Well that’s a lot to digest and I should have a quiz attached. So, go back….cut and paste, make yourself flash cards, and or watch the video….It’s free. And while you are here, have a look around…I hope you see some other cool, perhaps educational and hopefully entertaining stuff.

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Until next time, my friends!

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Auction 101 – Auction Terminology & Lingo

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