Auctioneering Fundamentals and Terminology
Domain 1 tests the working vocabulary of live and online auctions and the rules that decide when a bid becomes a contract. Expect questions on reserve status, bidder and seller roles, premium math, and the auctioneer's discretion.
Core terms and mechanics
A lot is the unit offered; the opening bid starts bidding; the hammer price is the final bid; the buyer's premium is added to the hammer price and is not part of the seller's hammer proceeds. A reserve is the seller's minimum; the upset or minimum bid may be published. Under UCC 2-328, an auction is with reserve unless expressly absolute. In a reserve auction the auctioneer may withdraw the lot any time before completion; in an absolute auction the lot cannot be withdrawn once a bid is made unless no bid is received within a reasonable time. If the auctioneer knowingly takes a bid from the seller or on the seller's behalf without notice, the buyer may avoid the sale or take the lot at the last good-faith bid. A fictitious “chandelier” bid is improper.
Worked example
A lot carries a $2,500 reserve. Bidding stalls at $2,300. The auctioneer says “fair warning,” then “pass.” That is not a sale: the reserve was not met, so the auctioneer may pass or withdraw. If the auction were advertised absolute, the $2,300 bid would normally prevail.
Traps that cost marks
Do not treat “going once” as a contract-the fall of the hammer or online close completes it. Do not assume a reserve must be announced; it need not be. Do not add the buyer's premium to the seller's hammer proceeds, and do not invent statutory bid increments.