Reserve Auctions vs. Absolute Auctions

What is the Difference?

What is a Reserve Auction?

A reserve auction is an auction in which the seller, trustee, or their agent reserves the right to accept or decline any and all bids. At the conclusion of the auction, the high bid will be placed into the reserve, subject to the seller’s confirmation.

What is an Absolute Auction?

An absolute auction, also known as “auction without reserve,’ do not have any limiting conditions or amount. The property will be sold to the highest qualified bidder.

Reserve Auctions vs. Absolute Auctions

In the United States, auctioneers tend to conduct reserve auctions more frequently than absolute auctions, particularly for real estate transactions. It isn’t uncommon, however, for auctioneers to commonly use the term absolute in conjunction with an amount (e.g. Absolute over $5,000). By indicating the amount, auctioneers are disclosing the seller’s reserve price and informing the public that the auction will convert from a reserve auction to an absolute auction once that reserve is met.

December 30, 2020


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