Auction Types
Types of Auctions
Absolute Auction
An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. The seller may not bid personally or through an agent. Also known as an auction without reserve. This type of auction means the property will be sold to the highest bidder regardless of price.
Auction With Reserve
An auction in which the seller or his agent reserves the right to accept or decline any and all bids. A minimum acceptable price may or may not be disclosed and the seller reserves the right to accept or decline any bid within a specified time. PAX AUCTIONS discourages sales with a high reserve price and asks sellers to disclose any minimum or reserve price prior to a sale.
In the case of bankruptcy and certain court ordered auctions, many properties are sold subject to a reserve price or final ratification by the Court before the sale can be completed.
Auction Without Reserve
See Absolute Auction.
Ballroom Auction
An auction of one or more properties conducted in a meeting room facility, hotel convention facility or other indoor location. At this type of auction it is assumed that the bidders have inspected the property and are usually shown pictures and other descriptions of each property as it is offered for sale. The ballroom auction format allows for progressive auctioneers to utilize Internet bidding.
Bidder's Choice
A method of sale whereby the successful high bidder wins the right to choose a property or properties from a grouping of similar or like-kind properties. After the high bidder's selection, the property is deleted from the group, and the second round of bidding commences, with the high bidder in round two choosing a property, which is then deleted from the group and so on, until all properties are sold. This type of bidding is very popular when selling building lots, timeshares and condominiums.
Caravan Auctions
A series of on site auctions advertised through a common promotional campaign that is located very close together. The bidders and auctioneer will actually travel from location-to-location and call each auction while all of the participants are at each property.
Estate Sale
The sale of property left by a person at his or her death. An estate auction can involve the sale of personal and/or real property.
Foreclosure Sale
The foreclosure sale is when a lender cannot collect on a mortgage or a loan and has petitioned the court to allow or order the sale. This type of sale is an excellent manner for investors to secure property as the sellers main interest is to recover as much of amount of the loan as possible. This type of sale is sometime subject to ratification by the court to be completed. As a side note professional auctioneers are "locked out" of the foreclosure auction process and these are managed by lawyers, bankers & deputy sheriff's.
Internet Auction
An Internet auction is where the property is offered on the Internet only and there is no live auctioneer or live bidders. This typical sale is conducted with computers and a variety of formats depending upon the venue selected by the seller. The auction has a specific open and close date and time, with fixed bid increments. A bidder will enter their bid against other Internet bidders or they may enter a "proxy bid" that will bid up to their predetermined high bid amount.
Live Internet Auction
A live Internet auction is where the online (Internet) bidders are competing with the bidders who are physically present at the auction site. This method has proven to be excellent for both buyers and sellers due to having a professional auctioneer facilitate the sale. Live Internet auctions allow the same types of features as an Internet only auction such as proxy bidding; the main benefit is they allow for a qualified bidder who has already researched the property to participate in the live event, no matter where they are located.
Minimum Bid Auction
An auction in which the auctioneer will accept bids at or above a disclosed price. The minimum price is always stated in the brochure and advertisements and is announced at the auctions.
Multi-Par Auction
A Multi-Par auction is where bidders may bid on a single property sold either as an entire parcel or in multiple parcels. A good example is when a tract of land such as a farm or timberland that would traditionally be sold to a large company due to the size and price but would make excellent home sites, ranches or other uses in smaller parcels. The property would be parceled or grouped prior to being offered for sale and advertised as such. The property is then simultaneously offered as whole and partial parcels to bidders. If a 1,000 acre parcel was divided into 50 lots of 20 acres each and offered for sale to individuals, the bidders on the smaller parcels are exercising a form of group buying power in that for every $1,000.00 bid increment, it will create a $50,000.00 bid increment for the parties bidding on the entire parcel. The Multi-Par auction is based upon deriving the maximum price for the seller, no matter which group of bidders wins.
Multi-Property Auction
A group of properties offered through a common promotional campaign. The properties to be auctioned may be owned by one seller or multiple sellers. A Multi-Property auction may use any of the types of auctions described here. This type of auction offers both buyers and sellers many advantages, the seller a shared advertising and promotional campaign, the buyers a wider variety of property at a single sale.
Multi-Seller Auction
Properties owned by many sellers, offered through a common promotional campaign are auctioned in a single event. A Multi-Seller auction may use any of the types of auctions described here. This type of auction offers both buyers and sellers many advantages, the seller a shared advertising and promotional campaign, the buyers a wider variety of property at a single sale.
On-line Auction
On-site Auction
An auction conducted on the premises of the property being sold.
Reserve Auction
An auction in which the seller reserves the right to establish a reserve price, to accept or decline any and all bids or to withdraw the property at any time prior to the announcement of the completion of the sale by the auctioneer. The Auctionarium discourages sales with a high reserve price and charges a "reserve price service fee" to sellers who refuse the present cash market value for their property.
Sealed Bid
A method of sale utilized where confidential bids are submitted to be opened at a predetermined place and time. Not a true auction in that it does not allow for reaction from the competitive market place. In some cases this type of auction will work to the benefit of the seller as it forces a bidder to place their best and final offer.
Subject to Confirmation
See Reserve Auction. Auctions are subject to confirmation for a variety of reasons, the most common be judicial or confirmation by the Court in a bankruptcy, collection or foreclosure sale.
Tax Sale
Public sale of property at auction by governmental authority, due to nonpayment of taxes. There are many types of tax sales, from an IRS sale, to a local government enforcing the sale for collection of property taxes.
Trustee's Sale
See Foreclosure and bankruptcy auctions. A sale at auction by a trustee to enforce the terms and conditions of a mortgage and/or a deed of trust. A sale at auction overseen by a bankruptcy trustee to satisfy creditors of a bankrupt party.
Webcast Auction
See Live Internet Auction. An auction that is conducted with live bidders and an auctioneer that is broadcast on the Internet via the World Wide Web to accept Internet bids from a global audience. Bidders must be registered and meet the same deposit and other financial qualifications as live bidders. The bidding is conducted in real time and creates a higher level of excitement for everyone involved.
