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Terminology for Auctions and Bank Auctions

May 10 2024
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  • Auction: Public sale where items are sold to the highest bidder.
  • Auctioneer: The official who conducts the auction.
  • Bidding: The process of offering a price for an item.
  • Gavel: The small hammer used by the auctioneer to signal the end of bidding.
  • Lot: An individual item or group of items offered for sale.
  • Reserve Price: The minimum price the seller is willing to accept for an item (may be confidential).
  • Buyer's Premium: An additional fee charged to the winning bidder on top of the winning bid price.
  • Seller's Premium: A fee paid by the seller to the auction house for conducting the auction.
  • Hammer Price: The final winning bid price for an item.
  • Knock Down: The point at which the auctioneer awards the item to the highest bidder.
  • Soft Close: An extended bidding period triggered by a late bid, allowing others to respond.
  • Absolute Auction: An auction where all items will be sold regardless of the final bid price (no reserve).
  • Proxy Bidding: Placing a maximum bid beforehand, and the system automatically bids on your behalf.
  • Auto-Bidding: Similar to proxy bidding, but automatically increases bids by a set increment until reaching your maximum.
  • Condition Report: A document describing the condition of an item before it's auctioned.
  • Bill of Sale: A legal document transferring ownership of an item from seller to buyer.

E-Auction Terminology (Specific to Online Platforms):

  • E-Auction Platform: Website or app facilitating online auctions.
  • Good Faith Deposit: A deposit demonstrating a serious bid (may differ from EMD).
  • Minimum Bid Increment: The smallest amount a bid can be increased by.
  • Maximum Bid Increment: The largest amount a bid can be increased by (often used with proxy bidding).
  • Buy Now Option: Allows immediate purchase of an item for a set price (may exist alongside bidding).
  • Feedback Score: Seller or buyer reputation indicator on some platforms.
  • In-Person vs. Online Auction: Choosing between attending a physical auction or bidding online.
  • Inspection Window: Opportunity to physically examine an auction item before bidding (may not apply to all items).

Bank Auction Terminology:

  • Foreclosure Auction: Sale of a property due to the owner's default on a mortgage.
  • Non-Performing Asset (NPA): A loan or property the bank repossesses due to non-payment.
  • Earnest Money Deposit (EMD): A deposit demonstrating a serious bid on a bank auction property.
  • Upset Price: The minimum acceptable bid amount set by the bank for a property.
  • Market Value (FMV): Estimated market price of the property based on comparable sales.
  • Fair Market Value (FMV): Another term for Market Value, emphasizing unbiased pricing.
  • Redemption Right: Borrower's limited window to reclaim the property after the bank auction sale.
  • Eviction Process: Legally removing previous occupants after a successful bid on a property.
  • Title Deed: Legal document proving ownership of a property.
  • Encumbrance: A legal claim or lien on a property that restricts ownership rights.
  • Clear Title: A property free of any legal claims or encumbrances.
  • Joint Tenancy: Ownership structure where two or more people own a property with equal rights.
  • Tenancy in Common: Ownership structure where two or more people own a property with individual shares.
  • Valuation Report: Professional assessment of the property's value commissioned by the bank.
  • ALJ Foreclosure: Alternative dispute resolution process for foreclosures outside of court.
  • REO (Real Estate Owned): Properties repossessed by the bank after foreclosure.
  • Cash Only Sale: Financing not accepted in a bank auction, requiring full payment upfront.
  • Tax Liens: Government claims on the property for unpaid taxes.
  • Assignment of Deed: Transferring ownership rights without going through a traditional closing process.

Additional Considerations:

  • Legal & Regulatory: Know Your Rights (KYC), Anti-Money Laundering (AML), Dispute Resolution
  • Shill Bidding: Fake bids used to inflate prices.
  • Lis Pendens: Public notice of a pending lawsuit affecting the property.
  • Squatter's Rights: Unlawful occupation of a property.
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