Types of Auctions

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Types of Auctions

There are three basic types of public auctions:

1. An auction “with reserve” is when the seller reserves the right to establish a minimum opening bid, to accept or reject any and all bids, and even withdraw the property at any time prior to the completion of the auction. The Uniform Commercial Code indicates that an auction is “with reserve” unless otherwise stated.

2. An “absolute auction” is one which is without reserve. In an absolute auction the property will be sold, regardless of price, to the highest bidder. There is no minimum price determined and the seller may not withdraw the property after the opening bid has been received.

3. The “absolute auction with minimum opening bid” allows the best of both the above. In this situation the seller sets a stated minimum opening bid which is low enough to attract interest but sets a floor on which to establish the bidding. The seller may not withdraw the property the property once the opening minimum bid has been reached.