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.
- As is As is means a lot is sold in the condition it is in at the time of sale, with all faults and without any warranty from the auction house or consignor, so the bidder accepts responsibility for inspecting it before bidding.
- 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.
- Condition report A condition report is the auction house's written description of a lot's physical state, including damage, restoration, wear and completeness, provided so that bidders who cannot examine the lot in person can bid with confidence.
- Consignor A consignor is the owner of property who hands it to an auction house to sell on their behalf, keeping ownership until the lot sells and receiving the hammer price less the agreed commission and fees.
- Estimate An estimate is the auction house's published guide to the price range a lot is expected to sell for, given as a low and high figure, excluding buyer's premium, and set before the sale by a specialist.
- 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.
- Lot A lot is a single item or group of items offered for sale as one unit at auction, identified by a lot number and sold under one hammer price.
- Paddle number A paddle number is the number assigned to a registered bidder for a sale, shown on a numbered paddle in the room or attached to their online account, so that the clerk can record every bid and the winning buyer against a number rather than a name.
- Phone bid A phone bid is a bid placed in a live auction by a bidder on the telephone with a member of the auction house staff, who relays the bidding in the room and places bids on the bidder's instruction in real time.
- Provenance Provenance is the documented history of a lot's ownership from its origin to the present, used to establish authenticity, legal title and, often, a premium in the price.
- 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.
- Sell-through rate The sell-through rate is the percentage of lots in an auction that sold, measured by number of lots and separately by value against the low estimate, and is the first figure used to judge how well a sale and its estimates and reserves were set.
- 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.
- Underbidder The underbidder is the bidder who placed the highest bid below the winning bid on a lot, and who is therefore the first person to offer the lot to if the sale falls through and the best prospect for similar lots in future sales.
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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