Auction, private treaty… This terminology can be confusing ! Because auctions involve highly-regulated transactions, it is important to have a specific vocabulary. Let’s look at some terms that you may encounter in the auction industry, to help you become more efficient and familiar with them.
Auctions: What do you need to know?
Auctions can also be initiated by the seller, which means they may be voluntary. An auctioneer is hired by the owner to help him recover liquid assets. Auctioneers are familiar with the facts Art market For example, the price charged and what it is. These people are the best at assisting and guiding sellers on how to get the items they want. An auctioneer can be contacted in person at an auction (many rooms are easily accessible on the internet). This is also known as a voluntary sale company. An auction may be considered judicial. The seller must force the sale. An auction will be conducted by a judge to determine if a company is in liquidation, or whether a person in bankruptcy. To pay his creditors, a person who is unable to repay his debts will have his goods sold.
For real estate transactions where mortgages were the preferred guarantees or for sales of equipment, this is common. Sellers will retain any surplus. A lawyer must assist, you as a buyer in real estate transactions. Auctions can sell any good: stamps, artwork, plumbing, furniture and real estate. You can sell almost anything. There are no restrictions on security or animal protection, such as ivory, endangered species and ethics, but there is some prohibition about mommified human remains or Nazi objects. These rules, however, are country-specific and may vary from one nation to the next.
What vocabulary do you need to be familiar with?
- The successful bidder is: a person or company that wins an auction and whose sale price was the highest.
- Auction sale: This is how an item can be put up for auction. This is also known as “sale at auction”.
- Auctionned off: this is the magic phrase! This word is very significant and means the auction will be won by the highest bidder. It acts as an adjudication word and can also be used to transfer ownership. The sale is stopped by a single blow.
- The sale catalog is the listing of all goods being offered. This is usually published to promote prestigious art sales.
- Bail: when you place your first bid, this authorization will be required to withdraw money.
- Candle auction: the bidding system that stops after the candle is out. This is a smaller flame than a larger candle.
- Consignment: For real estate sales, the bidder must submit a consignment check to the notary responsible for the sale. The amount will be determined by the notary. It is impossible to get a loan from a bank to purchase a property that has been auctioned. You must make payment in cash.
- Overbid is when you offer a better deal than the buyer.
- Bidder: you must be at least 18 years old, financially stable and not banned from bidding on an auction. Only a lawyer may bid for his client in a real-estate auction. You cannot also bid on your property.
- Crazy bidding is when a property is sold during a previous sale and then the buyer withdraws (he/she faces financial penalties such as the difference in the sale price or the cost of the auction …).). Re-bidding is the opposite.
- Fees : you will also have to pay additional fees to get the hammer price. These fees are publically announced and can vary between 15-25%.
- Outbid: the reserve price is the lowest price at which an auctioneer promises to not sell the property. This price is often kept secret. It is not possible to overbid after a sale of real estate. A buyer may still offer a price at least 10% above the winner’s bid for a period of 10 days.
- Private sales: If a property is not bought (meaning there are no bidders or a reserve price reached), the auctioneer can now offer a private sale outside of the auction system. These are sometimes called “aftersales”.
It is possible to get great deals through auctions. To be successful in auctions it’s important to know the basics of what you will be attending so that you don’t become in default. Also, be aware of any additional fees.