Auction Practices and Procedures: Methods, Terms, and the Fall of the Hammer
An auction is a sale by competitive bidding, and procedure determines when a contract exists. Master the vocabulary: absolute versus reserve; ascending (English) bidding; descending (Dutch); sealed bid; absentee, telephone, and maximum/proxy bids; buyer's premium; reserve price; and the fall of the hammer as acceptance.
Absolute means no reserve and no seller bidding: once advertised as absolute, the property cannot be withdrawn or bid back (the auctioneer may still refuse a bid believed collusive or from a bidder lacking capacity to contract). In a reserve sale the seller may withdraw at any time before the auctioneer announces completion of the sale. Recurring traps: assuming absolute is the default (it is not); assuming the auctioneer may freely reopen bidding (discretion exists only while bidding is open or on a timely dispute, and reopening should be announced); and treating announced podium terms as inferior to printed handouts, when announced terms generally control.
Sale-day sequence: bidder registration and numbers, announcement of all terms including premium and payment method, call for opening bids, stated increments, the twice-called warning, declaration of sale, and clerk recording of buyer number, price, and lot. Online sales add soft or staggered closings and maximum-bid functionality, which must be explained in advance.
Rule of thumb: terms announced before the first call bind the sale; three calls, then sold.
Worked example: a house is advertised absolute, but at the podium the auctioneer announces a reserve and passes the lot. The advertised absolute status is the representation the public relied on, and the failure to sell exposes the licensee to discipline and the seller to contract claims.