Quick answer: This glossary defines the auction terms sellers and bidders run into most, in plain English. The one people search for first is the buyer's premium — an extra percentage the winning bidder pays on top of the hammer price. Win a lot at $1,000 with a 10% premium and you actually owe $1,100.
Auctions have their own vocabulary, and a lot of it is spoken fast from behind a podium. Whether you're consigning your first estate, chasing a lot online, or clerking your first sale, knowing the words removes most of the anxiety. Definitions below are answer-first: read the bold sentence, then keep reading if you want the nuance.
Pricing & Fees
Buyer's premium
A percentage the winning bidder pays on top of the hammer price. If you win at $500 with a 15% premium, your total is $575. It funds the auction house and is always disclosed before the sale, so check the terms.
Seller's commission
The percentage the auctioneer keeps from what your item sells for. Consign a tractor that hammers at $10,000 with a 10% commission and you net $9,000 before other fees. Commission and buyer's premium are separate charges paid by different people.
Hammer price
The final bid amount when the auctioneer says "sold," before any premium or fees. A lot that hammers at $200 is a $200 hammer price; the buyer's out-the-door total will be higher once the premium is added.
Hammer price vs. total
The hammer price is the winning bid; the total is what the buyer actually pays after buyer's premium, tax, and any card or processing fees. Always look past the hammer to the total before you bid your ceiling.
Reserve price
A confidential minimum the seller will accept; if bidding doesn't reach it, the item doesn't sell. A painting with a $5,000 reserve that tops out at $4,200 gets "passed." Bidders don't see the reserve number, only whether it's been met.
No-reserve / absolute auction
The item sells to the highest bidder no matter how low the price — there is no minimum. Absolute auctions draw crowds because buyers know something will actually change hands, but the seller carries the risk of a soft day.
Minimum bid
The lowest bid the auctioneer will accept to open a lot. Unlike a reserve, it's public: a minimum bid of $50 means nothing under $50 is entertained, while a reserve can sit quietly above it.
Opening bid
The first bid the auctioneer asks for or accepts on a lot; it sets the floor and the pace. Auctioneers often open high to anchor value, then come down if the room is quiet.
Bid increment
The set amount by which each new bid must exceed the last. If the increment is $25, the next bid after $200 is $225. Increments usually grow as the price climbs.
Estimate
The auctioneer's predicted price range for a lot, shown as a low and high figure. An estimate of $800–$1,200 is a guide, not a promise, and it often hints at where the reserve sits.
Appraisal
A formal, documented opinion of an item's value, usually for insurance, tax, or estate purposes. Unlike an estimate, it's a standalone valuation that may carry a fee, and it doesn't guarantee what the item fetches at auction.
Chargeback
When a buyer disputes a completed payment with their card issuer and the funds are pulled back. It's a headache for auctioneers because the item may already be gone; clear terms and verified bidders reduce them.
Bidding
Absentee bid
A bid left in advance by someone who can't attend, naming the most they'll pay. Staff or the platform execute it up to that ceiling — essentially "bid for me, but not a penny over $300."
Proxy / max bid
An online system that bids automatically on your behalf, raising only as needed up to your secret maximum. Set a $300 max and you pay just one increment above the runner-up, not your full ceiling.
Absentee vs. proxy difference
Both cap your spending, but an absentee bid is typically executed by a person in a live sale, while a proxy bid is automated by software in an online sale. The practical result is similar: you name a ceiling and something bids up to it for you.
Paddle
The numbered card a registered bidder raises to signal a bid in a live room. Your paddle number ties every bid back to your account for settlement — lose it and the clerk can't credit your wins.
Watchlist
A personal list of lots you're tracking in an online sale, so you get reminders before they close. Watching isn't bidding — it just keeps the lot on your radar, though sellers can often see how many watchers a lot has.
Sniping
Placing a bid in the final seconds to win before anyone can respond. It's common on hard-close auctions and is exactly why platforms use a soft close to neutralize it.
Retracted bid
A bid that's withdrawn, usually because of an obvious error like a typo'd amount. Retractions are limited and logged; you can't retract simply because you changed your mind after leading.
Tie bid
When two bids come in at the same amount, most often two proxy bids at an identical max. The earlier-submitted bid typically wins — the main reason to set your max a dollar or two off round numbers.
Auction Formats
Live auction
A real-time sale with an auctioneer calling bids, whether in a room, online, or both. Lots sell one after another at speed, and the energy of a live crowd is a big part of why things sometimes sell over estimate.
Timed online auction
An online-only sale where each lot has a set closing time and no live auctioneer. Bidders place bids anytime during the window, so it runs more like a scheduled sale than a live event.
Simulcast / hybrid
A live auction broadcast online so remote bidders compete in real time against the room, with the auctioneer seeing online bids alongside floor bids. It widens the buyer pool without ending the live format.
Soft close / dynamic close
A rule that extends a lot's closing time whenever a bid lands in the final moments. Bid in the last 30 seconds and the clock resets to give others a fair chance — the standard defense against sniping.
Staggered close
Closing lots one at a time on a rolling schedule rather than all at once — lot 1 at 6:00, lot 2 at 6:01, and so on. It lets bidders follow multiple lots without missing everything in a single rush.
Extended bidding
The extra time added to a lot under a soft-close rule. If two bidders keep trading blows in the final seconds, extended bidding can stretch a "6:00 close" well past schedule — the lot ends only when the bidding truly stops.
Roles & Operations
Ringman
A staffer working the crowd at a live sale, spotting bids and relaying them to the auctioneer with a shout or gesture. Ringmen keep energy up and make sure a raised hand in the back row isn't missed — good ones are worth real money to a sale.
Block clerk
The person recording each sale as it happens — lot, buyer number, and price — right at the auctioneer's block. In online and hybrid sales, software often plays this role, and accuracy here is what makes settlement clean.
Clerk
The record-keeper who logs winning bids and buyer numbers throughout the sale. The clerk's sheet becomes the settlement record — one missed line and a buyer walks out unbilled or double-billed.
Runner
The person who moves sold items from the block to buyers or the pickup area during a live sale, keeping the floor clear so the next lot can come up. In equipment or estate sales they're the muscle that keeps things moving.
Catalog
The full list of lots in a sale, with descriptions, photos, and lot numbers, whether a printed booklet or an online listing. It's the bidder's map of what's coming and in what order.
Preview / inspection
The window before a sale when buyers can examine lots in person — your chance to open drawers, start engines, and check condition before you bid. Skip it and you're bidding on faith.
Selling & Settlement
Lot
A single item or grouped set of items sold as one unit under one number. A "box lot" might be a crate of tools sold together. Every bid, every record, and every payment is organized by lot.
Consignment
Handing your items to an auctioneer to sell on your behalf, with the proceeds split by an agreed commission. You keep ownership until the item sells, and most auction inventory arrives this way rather than being owned outright by the house.
As-is / where-is
You buy the item in its current condition, at its current location, with no warranties. If the mower doesn't start, that's your problem once the hammer falls — the default for most auction lots, which is why preview matters.
Condition report
A written summary of a lot's flaws and wear, provided on request or in the listing. A report noting "hairline crack to rim, no chips" tells you what photos might hide. It doesn't replace inspection but it narrows surprises.
Provenance
The documented ownership history of an item, especially for art, antiques, and collectibles. Strong provenance — receipts, exhibition records, a known collection — can lift value and confidence significantly.
Shill bidding
Fake bids placed by or for the seller to inflate the price. It's fraud, illegal in most places, and it destroys trust when discovered, which is why legitimate platforms build controls to detect and block it.
Settlement
The wrap-up process where wins are totaled, payments collected, and sellers paid. For a buyer it's the invoice; for a seller it's the accounting. Clean clerking makes it fast instead of a Monday-morning argument.
Payout
The money a seller receives after the sale, equal to hammer totals minus commission and agreed fees. If your lots hammered at $8,000 with 10% commission, your payout is $7,200 before extras. Timing varies by house, so ask up front.
Hammer down
The moment the auctioneer signals a lot is sold, traditionally with a strike of the gavel. Once the hammer is down, the sale is binding. "Hammer down at $450" means the deal is done.
Knocked down
Another way of saying a lot was sold to the final bidder. "The desk was knocked down to paddle 112" simply means paddle 112 won it. Same event, older phrasing.
"A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools." — Douglas Adams. Auction terms exist precisely because clear rules, plainly stated, keep a fast-moving sale honest for everyone.
Fee terms at a glance
The figures below are illustrative to show the shape of each fee — actual rates vary by auctioneer and sale. Always read the specific terms before you bid or consign.
| TermWho paysTypical basis | ||
| Buyer's premium | Winning bidder | % added on top of hammer price |
| Seller's commission | Consignor / seller | % deducted from hammer price |
| Hammer price | — | The winning bid itself, before fees |
| Processing / card fee | Buyer (often) | % or flat fee on payment |
| Reserve (unmet) | Nobody — lot passes | Sale doesn't complete |
How the three bid types compare
| Bid typePlaced whenExecuted byBest for | |||
| Live bid | During the sale, in real time | You, in the moment | Reading the room and reacting |
| Absentee bid | Before the sale | Staff, up to your ceiling | Can't attend a live event |
| Proxy / max bid | Before or during (online) | Software, automatically | Timed online sales |
A quick way to keep your fees straight before you raise a paddle:
- Bidders add the buyer's premium (and any tax or card fee) to the hammer price to find their real total.
- Sellers subtract commission and agreed fees from the hammer price to find their payout.
- Everyone should read the terms of sale — premium rate, close type, and pickup rules live there.
If you run sales yourself, the operational side — clerking, settlement, proxy bidding — is where clarity pays off most. Flat-fee platforms like Selling Lane handle the block-clerk math and soft-close timing automatically, so these terms stay simple facts rather than checkout disputes.
Frequently Asked Questions
What is a buyer's premium and why do I pay it?
A buyer's premium is a percentage added to your winning hammer price. Win a lot at $1,000 with a 12% premium and you owe $1,120. It helps the auction house cover operating costs and is always disclosed in the terms before the sale.
What does a reserve price mean?
A reserve is a confidential minimum the seller will accept. If bidding doesn't reach it, the item doesn't sell and is "passed." Bidders can't see the reserve figure — only whether it has been met.
What is an absolute auction?
An absolute, or no-reserve, auction sells every lot to the highest bidder regardless of price — there is no minimum. It attracts strong crowds because buyers know items will actually sell, though the seller takes on more risk.
What is a soft close?
A soft close extends a lot's ending time whenever a bid arrives in the final seconds, resetting the clock so others can respond. It's the standard defense against last-second sniping in timed online auctions.
What's the difference between hammer price and total?
The hammer price is the winning bid. The total is what you actually pay after the buyer's premium, tax, and any processing fees are added. Always budget to the total, not the hammer.
What is the difference between an absentee bid and a proxy bid?
Both let you set a ceiling. An absentee bid is usually executed by staff in a live sale, while a proxy bid is placed automatically by software in an online sale, raising only as needed up to your maximum.
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