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Business Definition for: auction
Dictionary of Computer and Internet Terms
auction

a sale in which buyers make bids (offers) and the highest offer is accepted. For information about online auctions see eBay .

See also bid , dutch auction , reserve price
Dictionary of Real Estate Terms
auction

a way of marketing property to the highest bidder. bids are taken verbally or simultaneously through mail or telegrams, and the property is sold to the highest bidder. Auctioning real estate may require both an auctioneer's license and a real estate license.

Example: Land in Iowa, since it is relatively homogeneous, lends itself to auction sales where it is sold to the highest verbal bidder.

Example: fannie mae agrees to buy mortgages once a week via an auction. Mortgage sellers state the price or yield they want, and Fannie Mae accepts the highest yields offered.

Related Terms:
bid

  1. price a prospective buyer is ready to pay. Term is used by traders who make a market (maintain firm bid and offer prices) in a given security by standing ready to buy or sell round lots at publicly quoted prices and by the specialist in a stock, who performs a similar function on an exchange.
  2. tender offer in a takeover attempt.
  3. any offer to buy at a specified price.

dutch auction

auction system in which the price of an item is gradually lowered until it meets a responsive bid and is sold. U.S. Treasury bills are sold under this system. Contrasting is the two-sided or double auction system exemplified by the major stock exchanges.

reserve price

a secret minimum bid in an auction. Ordinarily, the minimum bid (the lowest price that the seller will take) is announced to would-be buyers. However, auction services such as eBay allow the seller to specify a secret minimum bid, called a reserve price. The amount of the reserve price is not disclosed, but bids below it do not result in a sale.

Referring Terms:
bid
reserve price
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