Auction Jargon Decoded

A South African Bidder’s Guide to the Lingo

---

Confused by auction terms? Our guide decodes essential auction jargon for South Africa, from “buyer’s premium” to “reserve price,” so you can bid with confidence.

Don’t Let the Lingo Cost You a Deal

There’s a unique thrill to South African auctions. Whether you’re bidding on a bank-repossessed car in Johannesburg, a sought-after piece of art in Cape Town, or a farm in the Free State, the fast-paced chant of the auctioneer and the raised paddles create an electrifying atmosphere. But for the uninitiated, the world of auctions can feel like a foreign country with its own language.

Walking into an auction without understanding the key terms is like trying to navigate a complex braai recipe without knowing what “sous” is. You might end up with a raw deal or, worse, financially burned.

Fear not! This guide is your essential English-to-Auction dictionary. We’re breaking down the most common auction jargon you’ll encounter in South Africa, empowering you to bid with knowledge and confidence.

The Basics: Getting Started

Before you even raise your paddle, you need to know these foundational terms.

• Lot: A single item or a group of items offered for sale together. Each lot has a number, and this is what the auctioneer will call out. “We are now moving on to Lot 25, a vintage vinyl collection.”
• Bid: A prospective buyer’s offer to purchase a lot at a specific price.
• As Is, Where Is: This is one of the most critical terms to understand. It means the item is sold in its current condition, with all faults, and the buyer accepts full responsibility for any repairs or issues. There are no warranties or returns. This is very common for liquidation and repossessed vehicle auctions.
• Auctioneer: The licensed individual who conducts the sale, calls for bids, and declares the lot sold.
• Hammer Price: The final price at which the auctioneer’s gavel (or hammer) falls, signifying the winning bid. This is the price before any additional fees are added.

The Financials: Understanding the Real Cost

This is where many first-time bidders get caught out. The hammer price is not the final price.

• Buyer’s Premium: This is a mandatory percentage-based fee added to the hammer price. It’s the auction house’s commission. In South Africa, this typically ranges from 10% to 20%, including VAT. Always factor this into your maximum bid. If you bid R100,000 and there’s a 15% buyer’s premium, you will pay R115,000.
• Reserve Price: The confidential minimum price the seller is willing to accept. If the bidding does not meet this price, the seller is not obliged to sell the item. The auctioneer will state at the beginning if a lot is being sold “with reserve” or “without reserve.”
• VAT (Value-Added Tax): In South Africa, VAT (currently 15%) is a crucial consideration. It may be included in the buyer’s premium or added on top. Always check the auction terms and conditions to see how VAT is applied.
• Seller’s Commission: The fee the auction house charges the seller from the hammer price. This is not a direct cost to the buyer but is part of the overall auction structure.

The Bidding Process: Playing the Game

Knowing how to bid involves understanding the auctioneer’s calls.

• Opening Bid: The first bid requested by the auctioneer to start the bidding on a lot.
• Increments (or Bids): The set amounts by which the auctioneer increases the bidding (e.g., R1,000, then R5,000, etc.).
• The Chant: The rapid, rhythmic speaking style of the auctioneer used to drive the momentum of the bidding. It might sound like gibberish, but with practice, you can pick out the current bid and the asked-for next bid.
• On the Market: This phrase means the bidding has met or exceeded the reserve price, and the item will be sold to the highest bidder. You’ll often hear, “It’s on the market!”
• Passed In / Bought In: If a lot fails to meet its reserve price, it is “passed in” or “bought in,” meaning it remains unsold and is returned to the seller.

Special Auction Types in South Africa

• Absolute Auction: An auction where the lot is sold to the highest bidder, regardless of price. There is no reserve price. This is high-risk for the seller but very attractive for buyers.
• Sealed Bid Auction: Instead of open outcry, bidders submit a single, confidential bid in a sealed envelope by a deadline. The highest bidder wins.
• Timed Online Auction: Common on sites like Auction.co.za, this is an online auction that runs for a set period (e.g., 48 hours). You can place a maximum bid, and the system will automatically bid on your behalf up to that limit.

Pro Tip for South African Bidders

Always, always read the “Terms & Conditions of Sale.” This legal document, available before the auction, outlines everything: the buyer’s premium percentage, VAT application, payment deadlines, and collection rules. It’s your most important tool for avoiding nasty surprises.

Bid with Confidence

Armed with this knowledge, you can now walk into any auction hall or log into any online auction platform with a new level of self-assurance. Understanding auction jargon isn’t just about sounding smart—it’s about making smart financial decisions. You’re no longer an outsider; you’re a prepared and empowered bidder, ready to navigate the exciting world of South African auctions.

So, do your homework, set your budget (including the buyer’s premium!), and may the best bid win.