Real Estate Auction Glossary of Terms and Definitions;

Easy Quick Reference courtesy of 
Father Time® Auctioneers

Auction: An open invitation for offers, for the sale of goods or real estate. 

Auctioneer: A person licensed by the state who conducts an auction. 

Back Up Bidder: Is the second highest bidder. Many mortgagees reserve the right to sell the property to the second highest bidder if the first bidder defaults. 

Bid Increments: Acceptable dollar advances as determined by the auctioneer. 

Buyers Premium: A percentage of the high bid at an auction which is added to the high bid to determine the purchase price. 

Creditor: One who is owed money. 

Deed: A legal written instrument that transfers or conveys ownership in real estate. 

Deed of Release: Commonly used to free property from a mortgage lien. Also known as a discharge. 

Default: Failure to meet a contractual obligation when due. 

Encumbrances: A claim or lien on real or personal property. 

Fair Market Value: A price agreed upon by a willing buyer and a willing seller. 

Foreclosure: A legal procedure by which property pledged as security for a debt is sold by a lender in the event of a default by a borrower. 

Foreclosure Deed: Document recorded at Registry of Deeds conveying ownership to high bidder at Mortgagee's Foreclosure Auction. 

Junior Lien: Liens recorded after the date of the mortgage being foreclosed on. Technically, wiped out at a foreclosure sale. 

Lien: A legal claim on one's property for satisfaction of a debt. 

Memo of Sale: Sales agreement signed by the successful bidder, the auctioneer, and the seller. Contains the terms of sale. 

Mortgage: A legal document pledging real property to cover a debt. 

Mortgagee: The individual holding the mortgage. The property is pledged to him as security for a loan. Also known as the lender. 

Mortgagor: The property owner who mortgages his/her property as security for a loan. Also known as the borrower. 

Municipal Lien Certificate:(MLC) Supplied by city/town municipality to show outstanding real estate taxes, water, sewer or other municipal liens. 

Personality: Property that cannot be considered realty. It consists of personal property and possessions, such as household furnishings, tools... 
Qualified Bidders: Persons who can bid on a property because they are in possession of the cash or certified funds in the amount of the deposit stated in the auctioneers advertisement and properly registered at the sale. 

Senior Liens: Liens recorded before the date of the mortgage being foreclosed on. These liens are the responsibility of the successful bidder. 

Title: Legal evidence of the right to possess property. 

Title Insurance: Insurance against loss resulting from title defects.