Understanding Auction Terminology: A Glossary For Property And Land Buyers
Buying property or land at auction moves quickly, and the language can be unfamiliar if you have not bid before. This glossary explains the terms you will meet at a property and land auction in plain English, so you can take part with confidence whether you are in the room, on the phone, or online. Knowing what each term means is the difference between hesitating and bidding decisively.
Greenslade Taylor Hunt has more than 180 years of property auctioneering experience across Somerset, Devon and Dorset. We run property and land auctions in two formats: a traditional auction room with livestream, where bidding happens live in person, online or by phone, and online timed auctions, where lots are listed and sold online over a set period. Many of the core terms apply to both, while others relate to the legal process of buying at auction. You can see how both formats work on our property and land auctions page.
The guide price can be shown in the form of a minimum and maximum price range within which an acceptable sale price (reserve) would fall, or as a single price figure within 10% of which the minimum acceptable price (reserve) would fall.
Online timed auctions can work differently from the traditional room. The terms that apply to each sale are set out in the listing and the legal pack, so it is important to read both carefully before bidding.
A wide range of lots comes to auction with us, from houses and building plots to farmland, barns for conversion, smallholdings, equestrian property, and commercial and development opportunities. Whatever the lot, the core terms in this guide apply.
To see what is coming up, view our property and land auction calendar.
Live, telephone and online bidding are available across our auctions. If you are new to the process, our auction teams are always happy to talk you through a sale.
GTH runs property and land auctions across the West Country, and our teams are happy to guide first-time bidders. Find your nearest office to talk through any sale you are interested in.
What are the most common property auction terms?
The core terms every buyer should know are the guide price, the reserve price, the hammer price, bid increments, and the buyer’s premium. These appear at almost every property and land auction, whether you are bidding on a house, a building plot, a parcel of farmland, or a commercial unit. Understanding them is the foundation for bidding confidently.Guide price
The guide price is an indication of the range the seller expects, published to help buyers decide whether a lot is worth pursuing. It is a guide rather than a ceiling or a promise, and the final price can rise above or fall below it depending on demand on the day. The guide and the reserve are related, but they are not the same thing.The guide price can be shown in the form of a minimum and maximum price range within which an acceptable sale price (reserve) would fall, or as a single price figure within 10% of which the minimum acceptable price (reserve) would fall.
Reserve price
The reserve is the seller’s minimum acceptable price, the figure below which the auctioneer cannot sell. This must be within 10% of the guide price. It is confidential between the seller and the auctioneer, and it is not disclosed to bidders. The reserve can be adjusted up to and including the day of the sale, and a lot cannot sell below it.Hammer price
The hammer price is the winning bid, the figure the auctioneer accepts when the gavel falls. It is the price of the lot itself, before any fees or premium are added. At a traditional property auction, the fall of the hammer is also the moment the sale becomes legally binding.Bid increments
Bid increments are the steps by which bids rise during the sale. The auctioneer sets them, and they may start small and grow as bidding becomes competitive. Knowing the increment helps you plan your bidding and keep a clear sense of your limit.Buyer’s premium
The buyer’s premium, sometimes called a buyer’s administration fee or an administration or buyer’s fee, is an additional charge added to the hammer price and paid by the winning bidder. Not every auction applies one and where it does the amount and basis can vary, so always check the particulars before you bid. Factoring it into your maximum figure means you know the true cost of a lot.Which terms apply to the legal side of buying at auction?
Buying property at a traditional auction is legally binding the moment the gavel falls, so the legal vocabulary matters a great deal. The key terms are the legal pack, exchange of contracts, the deposit, the completion date, and the auctioneer’s discretion. There is no cooling-off period once you have bought, so understanding these terms protects you from costly surprises.- Legal pack: The bundle of legal documents about the property, prepared by the seller’s solicitor. It typically includes the title, searches, special conditions of sale, and any leases or tenancies. Always have it reviewed by a solicitor before you bid.
- Exchange of contracts: At a traditional property auction this happens the instant the gavel falls. Both buyer and seller are then legally bound to complete the sale.
- Deposit: Usually 10% of the purchase price, paid on the day of the auction. Failing to complete can mean losing this deposit and facing further legal penalties.
- Completion date: The date the balance is paid and ownership transfers, commonly 28 days after the auction, although it varies by sale.
- Auctioneer’s discretion: The auctioneer’s right to vary bid increments, withdraw a lot if the reserve is not met, or reopen bidding if there has been a genuine misunderstanding.
Online timed auctions can work differently from the traditional room. The terms that apply to each sale are set out in the listing and the legal pack, so it is important to read both carefully before bidding.
How does GTH run property and land auctions?
We offer two routes to buying and selling at auction. Our auction room with livestream combines a live saleroom with the reach of online and telephone bidding, so registered buyers can take part in person or from home. Our online timed auctions run online over a set period, with lots listed and sold without a single fixed event.A wide range of lots comes to auction with us, from houses and building plots to farmland, barns for conversion, smallholdings, equestrian property, and commercial and development opportunities. Whatever the lot, the core terms in this guide apply.
To see what is coming up, view our property and land auction calendar.
How can you bid with confidence?
You can bid with confidence by preparing in advance: read the documents, set a maximum price, and decide how you want to bid before the sale starts. A few practical habits make all the difference:- Read the legal pack first, and have a solicitor review it before you bid.
- Set your maximum bid before you start, and include the deposit, any buyer’s premium, and fees in your planning.
- Register in good time, as you will need to register before you can bid.
- Decide your bidding method: in the room, by telephone, or online.
Live, telephone and online bidding are available across our auctions. If you are new to the process, our auction teams are always happy to talk you through a sale.
Conclusion
Auction terminology is straightforward once it is explained, and a little preparation turns an unfamiliar process into a confident one. Keep these principles in mind whatever you are bidding on:- Learn the core terms first: guide price, reserve, hammer price, bid increments, and buyer’s premium.
- Read the legal pack, and review it with a solicitor, before you bid.
- Set a maximum that includes the deposit and any fees, and stick to it.
GTH runs property and land auctions across the West Country, and our teams are happy to guide first-time bidders. Find your nearest office to talk through any sale you are interested in.