How to use this glossary
Auction contracts and marketing pieces use precise language. These definitions cover the terms you will run into on nearly every Pasker property. Use the alphabetical list below as a working reference. If a specific clause in an auction's terms and conditions is unclear, call us. We would rather explain it now than untangle a misunderstanding at closing.
The glossary
- Absolute Auction
A sale format with no reserve and no minimum bid. The property sells to the highest bidder regardless of the final price.
Absolute auctions typically attract the largest buyer pool because the sale is guaranteed.
- Appraisal
A licensed appraiser's opinion of a property's market value, ordered by a lender to support financing.
Financed auction buyers should be ready to order the appraisal the day the contract is signed.
- As-Is
The property is sold in its current condition. The seller makes no repairs and offers no post-sale concessions.
Every serious buyer completes inspections during the preview period, not after winning.
- Auction Agreement
The contract between the seller and the auction firm that authorizes the sale, sets the fee, and defines the format.
- Bidder Registration
The process buyers complete before they can bid. Typically includes identification, proof of funds or pre-approval, earnest money authorization, and acceptance of the terms.
- Buyer's Premium
A percentage or flat fee added to the winning bid and paid by the buyer. Funds the marketing and transaction management costs of the auction.
See our full article on what a buyer's premium is.
- Clear to Close
A lender's final approval that the loan can close. All conditions have been met, the appraisal is in, and title is clear.
- Closing Date
The date title transfers from seller to buyer and funds are disbursed. Set in the auction terms; commonly 30 to 60 days after auction.
- Contingency
A condition in a real estate contract that lets a party back out (e.g., financing, inspection, appraisal).
Auction purchase agreements are typically non-contingent. Do your diligence before you bid.
- Due Diligence
The buyer's investigation of the property before bidding: title work, inspections, disclosure review, and lender coordination.
- Earnest Money Deposit (EMD)
Funds the winning bidder deposits shortly after auction to demonstrate commitment. Typically applied to the purchase price at closing.
- Fiduciary
A person or entity with a legal duty to act in another party's best interest, such as an executor administering an estate.
Auction is a common choice for fiduciary sales because it is transparent and market-tested.
- Foreclosure
A legal process by which a lender takes possession of a property after a borrower defaults on the mortgage.
- Gavel Price
The final bid at which the auctioneer declares the property sold. Also called the hammer price.
- Hammer Price
Same as gavel price. The winning bid before the buyer's premium is added.
- HOA (Homeowners Association)
An organization within a residential community that enforces rules and collects dues to maintain shared property.
Review HOA documents, dues, and any assessments during due diligence.
- Inspection
A licensed professional's evaluation of a property's condition, systems, and structure.
Inspections happen during the auction preview period, not after winning.
- Liquidation
The process of converting assets to cash, often on a defined timeline (estates, receiverships, corporate exits).
- Mechanic's Lien
A claim against a property by a contractor, subcontractor, or supplier who was not paid for work performed.
Common issue on estate properties. Surface it during title review.
- Minimum Bid
A publicly disclosed floor price. Bidding opens at or above the minimum and the property sells to the highest bidder above it.
- Non-Contingent
A purchase agreement with no contingencies. The buyer cannot back out for financing, inspection, or appraisal without losing earnest money.
- Opening Bid
The first accepted bid at an auction. May be at any value the auctioneer accepts, subject to the terms.
- Preliminary Title Commitment
A title company's initial report on the property's title status: ownership, liens, easements, and requirements to insure.
- Probate
The legal process of administering a decedent's estate: validating the will, paying debts, and distributing assets.
- Purchase Agreement
The signed contract between buyer and seller. At auction, the winning bidder signs the purchase agreement immediately after the sale.
- Reserve
A confidential minimum sale price agreed between the seller and auction firm. If bidding does not meet the reserve, the seller is not obligated to sell.
- Sealed-Bid
An auction format in which each bidder submits a single confidential bid by a deadline. The highest sealed bid typically wins.
- Title Commitment
A title company's binding commitment to issue a title insurance policy on a property once specified requirements are met.
- Underwriting
A lender's evaluation of a borrower and property to decide whether to issue a loan. For investors, also refers to evaluating a deal's numbers.
- Upset Bid
In some jurisdictions, a bid submitted after an auction closes that exceeds the winning bid by a required percentage, reopening the sale.
Common in certain probate and court-confirmed sales. Confirm procedure with the estate's attorney.
Still unclear on a term?
Call us. Every auction has its own document set, and the specific wording in a given contract sometimes needs a plain-English translation. That is what we are here for.