Auction Terms 101: A Guide for Our Clients

 New to auctions? Farmer Auctions breaks down the essential terms you need to know, from Buyer's Premium to Multi-Parcel sales.

Understanding the Auction Process

At Farmer Auctions, we believe an informed client is a successful one. Whether you are settling a family estate, liquidating a business, or bidding on a piece of local history, the "auction language" shouldn't be a barrier. Use this guide to navigate our auctions with confidence.

The Fundamentals

As-Is, Where-Is: This is the standard for almost all auctions. It means the property or item is sold in its current state, with all faults and without warranties. We always encourage bidders to take advantage of our preview days to inspect items in person.

Buyer’s Premium: A percentage added to the final "hammer price" of an item. This fee goes toward the administration, marketing, and execution of the auction.

Example: If you win an item for $100 and the buyer’s premium is 15%, your total invoice (before tax) will be $115.

Hammer Price: The winning bid amount announced by the auctioneer (or the final price on the digital clock). This is the "raw" price before the buyer’s premium or sales tax is applied.

Bidding Types & Rules

Absolute Auction: An auction where the property is guaranteed to sell to the highest bidder, regardless of the price. There is no "floor" or minimum. These auctions often generate the most excitement and highest turnout.

Reserve Price: A confidential minimum price a seller is willing to accept. If the bidding does not reach this amount, the seller reserves the right not to sell.

Max Bid (Proxy Bidding): In our online auctions, you can enter the maximum amount you are willing to pay. Our system will automatically bid on your behalf in small increments to keep you in the lead, but it will never exceed your Max Bid.

Soft Close: To prevent "bid sniping" at the last second, our online auctions use a soft close. If a bid is placed in the final minutes, the countdown clock will automatically extend, giving all bidders a fair chance to respond.

Real Estate & Land Terms

Multi-Parcel (Multi-Par) Auction: A dynamic way to sell land. Bidders can bid on individual tracts, combinations of tracts, or the entire property. The system calculates the highest return for the seller while giving buyers the flexibility to buy exactly what they want.

Settlement: The process where the final payments are made, and the ownership of the property or assets is officially transferred to the buyer.

Have more questions?

We are here to help you navigate the process from start to finish. Our team is dedicated to transparency and helping you achieve the best results on the auction block.

Ready to Sell?  From clearing out a home to selling the land it sits on, we make it easy. Schedule a free consultation with the Farmer Auctions team today. Call (540) 384-0100.