Auction glossary
Auction Terms, Explained for Auction Houses
The words that appear in every condition of sale, consignment agreement and settlement statement, defined the way the trade uses them, with worked examples and a note on how each one behaves in online bidding software. Written for auction house staff and the collectors who bid with them.
- Absentee bid An absentee bid is a bid left with the auction house before the sale, stating the most a bidder will pay for a lot, which the auction house or platform then executes on the bidder's behalf against the competition.
- Bid increment A bid increment is the minimum amount by which a new bid must exceed the current bid, usually set by a table that raises the increment as the price rises.
- Bought in A lot is bought in when bidding fails to reach its reserve price and the auctioneer withdraws it unsold; the lot returns to the consignor rather than selling to the highest bidder.
- Buyer's premium A buyer's premium is a percentage of the hammer price that the auction house adds to the winning bid and charges to the buyer, on top of the price of the lot.
- Hammer price The hammer price is the final bid the auctioneer accepts when a lot is sold, before the buyer's premium, taxes and shipping are added.
- Reserve price A reserve price is the confidential minimum hammer price a consignor has agreed to accept for a lot; if bidding does not reach it, the lot is not sold.
- Soft close A soft close is a timed auction closing rule that extends a lot's end time whenever a bid arrives in the final minutes, so the lot only closes once bidding has stopped.
- Staggered closing Staggered closing is a timed auction rule under which lots close one after another at a set interval, such as one lot per minute, rather than all at the same moment.
Where these terms show up in the platform
Reserves, estimates and bid increment tables sit on the lot record in Circuit's timed auction software, which runs staggered closing and automatic bid extensions. Absentee and phone bids are executed from the clerk console in the live auction software. Hammer prices flow into invoices with the buyer's premium applied, and into consignor statements with commission deducted. For the format decision behind many of these terms, read timed vs. live auctions.
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