Glossary

Appraisal – an estimate of an item’s worth, usually performed by an expert in that particular field. Bogotá Auctions offers free appraisals of objects when the owner is considering consigning those objects for sale at auction. Valuations for the purpose of insurance are also possible, but a fee is charged for this service.

Auction – a sale organized based on direct competition. It is the ideal forum to determine the value of an item. Here, vendors and buyers converge in an instant, through the agency of the auction house, to demonstrate publicly and without pressure their interest in the item(s) offered. It is a public and verifiable act, transparent and with clear rules, in which only supply and demand establish the value of the item on sale, and where the frequency of sales and the quantity of items sold build the value of the market itself.

Auction Block – a raised platform on which the auctioneer shows the items to be auctioned. Used figuratively, it can also refer to the auction itself.

Auction House – the company operating the auction, the institution offering the service of convening potential buyers for the items consigned. This involves establishing the date and time of the auction, the auction rules, determining which item(s) are to be included in the auction, registering bidders, taking payments, and delivering the goods to the winning bidders.

Auction Theory – a branch of economics that studies the behaviour of the participants in auction markets. Every auction is characterised by two fundamental conditions: any good may be offered (including intangibles) and it is thus universal; and the result of the auction does not depend on the identity of the bidders and is therefore anonymous.

Auctioneer – the person conducting the actual auction, announcing the rules of the auction and the item(s) being auctioned, calling and acknowledging bids made, and announcing the winner.

Bidding – the declaration of intent to buy an object at auction. This can be manifested in writing (absentee bid or written bid), verbally (telephone bid), or in person by raising the paddle during the auction.

Sealed Auction – an auction in which all bidders simultaneously submit sealed bids so that no bidder knows the bid of any other participant. The highest bidder pays the price they submitted. This type of auction is distinct from the English auction, in that bidders can only submit one bid each. Moreover, since bidders cannot see the bids of other participants they cannot adjust their own bids accordingly. This kind of bid produces the same outcome as Dutch auction.

Buyer Registration – the process that every person with the intention to participate in an auction must complete in advance of the sale. To register for the auction, you will need to bring a photo identification such as an ID card or passport, and sign an Agreement in which you agree to our Terms and Conditions and agree to pay the Hammer Price plus Buyer’s Premium of any lot(s) you successfully bid for.

Chandelier Bid – also called “off the wall bids”, signifies a technique used by some auctioneers, especially in England, to generate a bidding pattern and to raise the price level from the opening bid to the reserve, even if no bidders have manifested their interest. It is illegitimate to use chandelier bids above the reserve.

Choice – a form of bidding whereby a number of identical or similar items are bid at a single price for each item. Choice differs from “lot” in that the winning bidder must take at least one of the items, and can take more than one (up to and including all of them) but is not required to do so. Items not selected by the winning bidder may then be re-auctioned to other bidders.

Collusion – Whenever bidders at an auction are aware of the identity of the other bidders there is a risk that they will form a “ring” and thus manipulate the auction result, a practice known as collusion. By agreeing to bid only against outsiders, never against members of the “ring”, competition becomes weaker, which may dramatically affect the final price level. This practice is illegal.

Commission – a fee paid by a consignor/seller to the auction house; it is typically calculated as a percentage of the winning bid and deducted from the gross proceeds due to the consignor/seller.

Condition Report – a written description of condition of the property prepared as a service to prospective bidders upon request. It is prepared by our experts and provides information supplementary to the catalogue description including any damage or restoration. The Condition Report is not substitute for a personal inspection of a lot prior to the auction.

Consignor (or Vendor) – the person owning the item to be auctioned or the owner’s representative, who has instructed the auction house to sell the item on his or her behalf.

Dutch Auction (or Descending Auction) – the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer’s price. The winning participant pays the last announced price. The Dutch auction is named for its best known example, the Dutch tulip auctions.

English Auction (or Ascending Auction) – the most common form of auction in use today. Participants bid openly against one another, with each subsequent bid required to be higher than the previous bid. An auctioneer may announce prices, bidders may call out their bids themselves. The auction ends when no participant is willing to bid further, at which point the highest bidder pays their bid. Alternatively, if the seller has set a minimum sale price in advance (the ‘reserve’ price) and the final bid does not reach that price, the item remains unsold.

Estimate – each lot carries an estimated range of sale which is given in Colombian Pesos and an approximate equivalent in US$. The estimate is set by the auction house and takes into account the quality and rarity of the item, as well as its condition and provenance. The price is for guidance only, and a lot may sell within the estimated range or well above.

Gavel (or Hammer) – the tool with which the auctioneer conducts the auction and adjudicates a lot to the highest bidder. It is normally made from the wood of a fruit tree or of silver, and is the symbol of the auction trade. In Colombia, it is synonymous with the auctioneer himself.

Hammer Price – the nominal price at which a lot is sold; the winner is responsible for paying any additional fees and taxes on top of this amount.

Increment – a minimum amount by which a new bid must exceed the previous bid. The increment is typically around 10% of the previous bid, but an auctioneer may decrease the increment when it appears that bidding on an item may stop, so as to get a higher hammer price.

Lot – a single item being sold, or a group of items which may or may not be similar or identical.

Opening Bid – the first bid placed on a particular lot. The opening bid must be at least the minimum bid, but may be higher: for instance, a bidder may shout out a considerably larger bid than minimum, to discourage other bidders from bidding.

Paddle –  Upon registering, you will receive a numbered bidding paddle. The auctioneer will announce out each lot and call out increments that are predictable but may vary. You indicate your willingness to pay the asking price by holding up your paddle.

Premium – a fee paid by the buyer to the auction house; it is typically calculated as a percentage of the winning bid and added on it. The Premium is non-negotiable and is set by each auction house. Bogotá Auctions currently charges a 20% Premium on the hammer price, and includes VAT within that fee.

Reserve – the minimum acceptable price established by the vendor prior to the auction, which is normally not disclosed. The reserve price is always at or below the low estimate. Occasionally, a lot may have no reserve.

Sale Price – is the total price of a lot, composed of the hammer price and the Premium (and in some cases, the VAT on the premium). This is the price published after a sale, this being the price in effect paid by the buyer for the item sold.

Telephone Bid – If you are unable or prefer not to be present in the saleroom, you may register to talk directly to a representative of Bogotá Auctions who will relay the process to you during the auction and bid on your behalf. We recommend that you register to telephone bid at least 24 hours prior to the sale.

Written Bid (or Absentee Bid) – Another way to bid for a lot if you are unable to attend the auction, is a written bid or “absentee bid”. This is a written instruction to the auctioneer to bid for a lot at the lowest possible price and take you progressively up to your maximum bid.