Real Estate Auction: Terms to Know

OreillyTeam-CircleMasterFile-Jan15This glossary of common terms used in the auction industry will help prepare you for your first real estate auction experience. Many people believe the misconception that an auction is a secretive or confusing event. In reality, a property auction is very organized and easy to follow. Understanding some of the most commonly used terms related to the property auction process is a great first step.

As Is – If a property is for sale “as is,” it means that you are purchasing the home or property exactly as it is. The current condition of the home—and its contents—is the condition in which you will buy it. You could also think of “as is” as “in present condition.”

Bid – The bid is the offer of a price that a person is willing to pay to purchase the property. The bids at an auction are usually predetermined in increments established by the auctioneer.

Bidder – The bidder is someone who has registered to bid and plans to bid on the property at auction. If you register for an auction, you will be considered a bidder.

Bid Price – The bid price is the current high bid at an auction, or the bid that will become the sale price of the home.

Client – This is the person or entity that the auctioneer has contracted with to sell the property that is up for auction. Other terms used for the client is the consignor or seller.

Conditions Of Sale – All of the legal terms and conditions regarding the auction are referred to as the conditions of sale. These can include accepted payment methods, terms of possession, and other factors. In most cases, the conditions of sale for a property to be sold at auction will be announced prior to the start of the auction and sometimes will appear in published advertisements promoting the auction.

Lot – The item being sold at auction is referred to as the auction lot.

Market Value – This is the highest price that a property can bring in a competitive open real estate market.

ReserveThe minimum price that a seller is willing to accept for the property is known as the reserve, or upset, price. If an auction is listed as being with reserve, it means the seller has the right to accept or decline any or all of the bids. The reserve price may or may not be disclosed. An auction with reserve, also known as an absolute auction, means the property will be sold to the highest bidder regardless of the bid—there is no reserve price or other limitations on the bids.

 

If you have more questions about the auction process, give O’Reilly Auctions a call today. We would love to discuss your interest in buying or selling your home at auction.