How an auction sale works

An auction sells an item, called a lot, to the highest bidder. In a live sale, the lot sells when the auctioneer closes the bidding. In a timed online sale, the bidding closes at an end time that the sale's rules set.

The hammer price is not your price

The winning bid is the hammer price. It is not the total on your invoice. Most houses add a buyer's premium, and tax and shipping can come on top. Lesson 2 shows how to add these up.

The conditions of sale are the contract

Each house publishes conditions of sale. When you register to bid, you agree to them. They set the premium, the payment deadline and the collection rules. Read the conditions for the sale you want to bid in, not only the general page.

Four types of auction entity

This directory gives each listing one type:

• Live auction house: a saleroom that sells from the rostrum. Many also take online and absentee bids.
• Online auction platform: the bidding software and marketplace. The platform's terms control the bidding. The seller's terms control the sale.
• Government surplus program: a public body's own sales channel. It sells surplus, seized or confiscated property, usually as-is.
• Auction aggregator: a site that shows the sales of many houses in one place. The selling house's own terms apply to each sale.

Five bidding formats

• Live: you bid in the room.
• Online: you bid through a website or an app.
• Absentee: you leave a maximum bid with the house before the sale. The house bids for you up to that limit.
• Phone: a member of staff calls you during the sale and bids on your instructions.
• Sealed bid: you send one private bid before a deadline. The seller compares the bids after the deadline.

A listing shows only the formats that its source states. An empty field means unknown, not none.

Sources

• AuctionFinder guide: How to choose an auction house or platform
• AuctionFinder guide: How auction buyer's premiums work
• GSA, How to purchase surplus property