If you are new to machinery auctions, some of the terminology used can seem unfamiliar at first. We have put together this guide to explain common auction terms in clear, straightforward language to help both buyers and sellers understand the process, and buy or sell with confidence.
Auction
An auction is a method of selling items where buyers place competing bids, with the item selling to the highest bidder. These can be held in different formats such as in-person live bidding, live stream online bidding, and timed online (with a specified ending time).
Lot
A lot is an item offered for sale in an auction which is assigned its own unique lot number.
Lot Number
A lot number is the reference number allocated to each item in the auction catalogue. Buyers use this number to identify and bid on specific items.
Catalogue
The catalogue contains details of the lots such as descriptions, photographs, and videos, and is usually updated regularly leading up to the auction.
Guide Price / Estimate
An estimate or guide price indicates the expected selling range of a lot, however, they are provided very much as a guide only and are not a guarantee of the final selling price.
Reserve
A reserve price is the minimum amount a seller is willing to accept for a lot. However, sometimes when the reserve is not met, the Auctioneer will sell the lot ‘subject’ and ring the vendor to ask if they want to accept the bid.
Subject bid
A subject bid is where a lot hasn’t quite met reserve but is sold to the highest bidder, subject to vendors approval. The Auctioneer will ring the vendor and ask if they want to accept the bid and then let the highest bidder know the outcome.
No Reserve
If an item has no reserve, it will sell to the highest bidder regardless of price.
Hammer Price
The hammer price is the final bid accepted when the auction closes and the item is sold. This figure does not include buyers fees/commission, or VAT.
Buyers Premium / Commission
The buyers premium is an additional fee paid by the buyer on top of the hammer price. This is usually calculated as a percentage of the final bid and is clearly stated in the auction terms.
Clearance Rate
The clearance rate refers to the percentage of lots sold during an auction. A high clearance rate indicates strong demand and successful sales.
Vendor
The vendor is the person or company selling an item in the auction.
Buyer
The buyer is the individual or business placing bids and purchasing items at the auction.
Viewing Days
Viewing days are scheduled times when buyers can inspect items in person before bidding. This allows buyers to assess condition and suitability prior to purchase and is usually recommended.
Sold As Seen
Items sold at auction are typically sold as seen, ‘buyer beware’. This means buyers are responsible for inspecting items and satisfying themselves as to the condition before bidding.
Unsold Lot
If an item does not reach its reserve price or receive any bids, it may be classed as an unsold lot. These items can often be re-entered into a future auction.
Need More Help?
Understanding auction terminology can make the buying and selling process much smoother. If you have any questions about how auctions work or would like guidance on entering equipment or bidding online, our team are always happy to help.
For further advice, valuations, or auction information, please get in touch with our office on 01226 247591 or explore the other guides available on our website at www.wattsauctions.co.uk
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01226 247591