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definition in the Cambridge English Dictionary

todayAugust 19, 2022

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Never formally disclosed, the reserve price is the confidential minimum price agreed upon between the consignor and the auction house. Reserves must be set at or below the low estimate, and if bidding ends before the reserve is reached, the property will not be sold. In rare cases, an auction house will guarantee to pay a consignor for a lot, regardless of whether the bidding at auction reaches the reserve price. The guarantee may be provided by the auction house, by a third party or jointly by the auction and a third party.

If there are no subsequent bids, the auctioneer’s hammer falls and the sale is completed. A formal evaluation of the fair market and/or insurance value of a given property. Fair market value represents what the auction house believes an item would bring at auction. A Valuations department conducts appraisals by comparing a piece with similar, recently sold works, but no appraisal is definitive. You do not need a formal written appraisal in order to obtain a presale auction estimate.

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If the manufacturer also owes a substantial amount of taxes, the government may seize its capital equipment, including buildings, machinery, equipment, vehicles, and tools, and auction it off to other manufacturers. There is an incentive for other manufacturers to buy these capital goods at auction because they are able to pay less for the used equipment than they would if they purchased brand-new equipment. The range of auctions’ contexts is extremely wide and one can buy almost anything, from a house to an endowment policy and everything in between. Some of the recent developments have been the use of the Internet both as a means of disseminating information about various auctions and as a vehicle for hosting auctions themselves. An important part of the authentication process, provenance establishes the chain of ownership back (if possible) to the date an item was created. The amount above the hammer price that is paid as part of the total purchase price.

  • A term frequently used by appraisers referring to their judgment and opinion about an object’s likely sale price if offered by a willing seller to a willing buyer.
  • With the growth of technology in the 1990s, auctioneers started using computers, cell phones, and fax machines to increase the efficiency of their trade.
  • In the UK, this auction practice is illegal.[136] It jeopardizes competition on the auction and can demotivate other bidders from participating.
  • An important part of the authentication process, provenance establishes the chain of ownership back (if possible) to the date an item was created.

Collusion may also occur in the bidding process, which is when a small group of bidders come together and form a pool, and, thus, manipulate the auction result. At the end of the official auction, the pool of bidders may come together for an unofficial auction. While securing a bargain is always a possibility, if there are multiple bidders, it is also possible that the buyer in an auction will actually pay more because of the potential competition of other bidders.

Aside from commodities and real estate, auctions historically served as a means for transferring ownership of slaves. There is evidence of slave auctions in the history of ancient Greece from as far back as the Homeric period. The practice persisted through the Roman Empire and into the early period of Christianity and was revived after the decline of serfdom in the late Middle Ages.

Commodity auctions

In a seller-bid auction of this type, the lowest bidder sells the item at the second-lowest bid. This kind of auction is used in automated contexts such as real-time bidding for online advertising. This is an open descending price auction where the auctioneer starts with a high asking price and lowers the bid until one of the bidders is willing to accept the auctioneer’s price, or when the seller’s reserve price is achieved. Once potential buyers are done viewing all the items and are interested in placing their bids, they must register with the auctioneer.

Idioms, Phrasal Verbs Related to Auction

And there is always the possibility that a buyer can purchase an item at a discount at an auction. Property may become government-owned property through normal purchases or if it is foreclosed on for any reason. Investors interested in land and other assets can attend an auction of government-owned property, which may ultimately be sold at attractive prices. A detailed description and current value of property prepared by the auction house’s staff.

Some sellers offer a “buy it now” feature so you can buy and pay for the item immediately. If an item is an auction, the seller chooses a starting price and interested parties can bid against other buyers. In some countries, such as Australia, auctioning is a common method for the sale of real estate. Auctions were traditionally used as an alternative to the private sale/treaty method to sell property that, due to their unique characteristics, were difficult to determine a price for.

More meanings of auction

Each lot is given a low and high estimate, representing the opinion of experts about the range in which the lot might sell at auction. Estimates are based on the examination of an item and recent auction records of comparable pieces. Published in online and printed catalogues, an estimate provides prospective buyers with an important preliminary guide to value and is generally the basis for establishing the reserve price. In conclusion, auctions play a significant role in the world of finance, providing a dynamic marketplace for buyers and sellers. As with any financial transaction, it’s crucial for both buyers and sellers to weigh the pros and cons of auctions and make informed decisions before participating. Auctions are an important part of selling operations in the agricultural markets of many countries, for they have traditionally provided a rapid and effective means of disposing of goods, especially perishable products.

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Property seized for non-payment of property taxes, or under foreclosure, is sold in this manner. Police auctions are generally held at general auctions, although some forces use online sites including eBay, to dispose of lost and found and seized goods. Debt auctions, in which governments issue and sell debt obligations, https://personal-accounting.org/auction-definition/ such as bonds, to investors. The auction is usually sealed and the uniform price paid by the investors is typically the best non-winning bid. In most cases, investors can also place so-called non-competitive bids, which indicates interest to purchase the debt obligation at the resulting price, whatever it may be.

An object displaying the number assigned to a bidder when he or she registers at the auction. To place a bid, simply raise your paddle until the auctioneer acknowledges you. If you win the auction, your paddle number is recorded alongside your bid.

In many cases the winning bid is placed only seconds before the bidding is closed. At the end of a successful auction, the buyer and seller communicate—usually by e-mail—to arrange for payment and delivery of the goods. Auction, the buying and selling of real and personal property through open public bidding. The traditional auction process involves a succession of increasing bids or offers by potential purchasers until the highest (and final) bid is accepted by the auctioneer (who is usually an agent of the seller).

In contrast, most buyers prefer proprietary sales over an auction because they can usually exercise more control over the purchase price. At silent auctions, items that are for sale are displayed for attendees to place bids on and purchase. There is no auctioneer present at silent auctions; participants place their bids silently and anonymously on a bid sheet using a bidding number. When it is the sale of company assets or an entire company, there are many advantages for the seller because they control the entire auction process. They can create a competitive environment in order to maximize their bargaining power, and, ultimately, achieve a higher price. In a situation wherein a division of a company or the whole company is up for sale, price is not the only consideration.

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