Absolute vs. Reserve

Take a look at many advertisements for auctions, and you’re bound to see the words “absolute” or “reserve” making their way into the text.

Have a conversation about auctions with an auctioneer, and chances are you’ll hear the words at some point. The two words are part of auction jargon, part of the lexicon of language that surrounds the auction industry.

“Auctioneers use the words “absolute” and “reserve” to describe an auction and how it will be conducted,” said John Roebuck, CAI, AARE, president of John Roebuck and Associates, Memphis, TN. “Calling an auction “absolute” or “reserve” tells bidders what the auction rules are, so to speak.”

  • An absolute auction is one in which the property is sold to the highest qualified bidder with no limiting conditions or amounts. The seller may not bid personally or through an agent. Absolute auctions can also be called auctions without reserve.

Say, for instance, that a piece of real estate – a home – is being sold at absolute auction. The qualified bidder who makes the highest bid during the auction will purchase the home.

  • A reserve auction, or an auction with reserve, is an auction in which the seller or the seller’s agent reserves the right to accept or reject any and all bids. A minimum acceptable price may or may not be disclosed and the seller reserves the right to accept or reject any bid within a specified time.

Say, for instance, a seller has a boat being offered at a reserve auction. The seller can decide, based on the bids, to sell the boat or to reject to sell the boat for the amount offered during the auction.

Both are valid forms of auctions; the two simply are different ways of conducting the auction on the client’s behalf. Unless stated otherwise, an auction is presumed to be with reserves.

Courtesy of the National Auctioneers Association

Becoming an Auctioneer

If you’ve attended an auction, you’ve no doubt been struck by the performance of the auctioneer. With enviable verbal skills and a quick wit, the auctioneer keeps the crowd focused and sale moving at a steady clip.

And they make auctions fun, too. Couple that with bids for seemingly astounding amounts, and auctioneering starts to look like a viable and lucrative profession.

Can you make a living as an auctioneer? Yes.
Can you become wealthy in the auction industry? Yes.

But succeeding in the auction industry isn’t a sure thing. Like any business venture, a combination of training, skills and determination are essential to the success of an auction business. In addition, auctioneers should adhere to a standard of professional conduct and often need to meet local and state licensing requirements.

Courtesy of the National Auctioneers Association