Online CRE Auction Glossary

New to Auctions? Learn These Common Terms & Phrases

Two business professionals reviewing auction information on a laptop in a modern office environment. A well-dressed man with gray hair and a woman in a black dress are collaborating while examining property details, with other colleagues visible in the background. This represents the professional nature of commercial real estate auctions conducted through digital platforms.

Online auctions are a quick, simple, and streamlined way to transact CRE online. However, if you've never participated in an auction before, it can be easy to feel like you're stepping into a new world with new rules, new something, and an entirely new language.

Now that LoopNet is the exclusive home to Auctions by Ten-X, we want to ensure you have all the resources to make your auction experience an easy one. If you're interested in learning more about online auctions, start small by learning some of the basic lingo.

Get Started with the General Auction ABCs

These are the fundamental words and phrases that you'll hear in any auction-online or offline. Familiarize yourself with these terms now so you can navigate your next (or first) auction with confidence.

Absolute Auction

Also known as an auction without reserve

An absolute auction is an auction in which the asset is sold to the highest qualified bidder.

What differentiates absolute auctions from standard auctions is that there is no reserve price or other conditions on the amount for which a property must be sold in an absolute auction-the highest bid will be the winner.

Auction

An auction is a public sale in which properties or goods are sold to the highest bidder.

Auctions can occur in person or online, and can be dedicated to selling a wide variety of products. In the case of LoopNet Auctions by Ten-X, our auctions occur entirely online, offering commercial real estate of all asset classes to potential investors around the world.

A common misconception is that commercial real estate auctions are a last resort for unwanted, undesirable properties. This is not the case. While auctions for dilapidated and defaulted properties and auctions such as bank auctions, foreclosure auctions, and HUD auctions do exist, you can also find Class A properties available at online auctions.

Auctioneer

An auctioneer is the person or entity who manages an auction. Their role includes accepting bids and declaring good or services to be sold. They must be licensed in order to conduct auctions.

Auction Platform

An auction platform is an online marketplace where individuals and/or businesses can buy and sell goods and services through a competitive bidding environment, with all negotiating and finalizing of transactions taking place digitally. LoopNet Auctions by Ten-X is one example of an online auction platform.

Bid

A bid is an offer of a price. In the context of auctions, bids are prospective buyers' competitive offers of payment for a good or service (in our case, properties).

Bid Increment

The bid increment is the difference between the current bid and the next bid. Some auctions may have set bid increments, with a certain increase over the current bid required in order to place a subsequent bid, while others are more flexible.

Buyer

Also known as the winning bidder; may also be referred to as an investor

A buyer is the person or entity who places the winning bid in an auction. A prospective buyer is someone who is potentially interested in purchasing a property from the seller.

Reserve

Also known as the reserve price; may also be referred to as minimum bid

The reserve is the minimum sale price for an auction property. This price is set by the seller before the auction takes place and typically will not be disclosed to the public.

Seller

In an auction, the seller is the person or entity that has legal possession or ownership of the property being auctioned.

The seller is not the same as the auctioneer; the seller is the one who owns the property being sold, while the auctioneer and/or auction platform is the one that manages the sale. The seller does not facilitate the transaction.

Starting Bid

Also known as the opening bid

The starting bid is the initial price suggested for an item at auction. This value set by the auction platform and is the lowest possible amount that the first bidder can offer. Unlike the reserve price, the starting bid will be made available to the public.

Keep in mind that unless otherwise noted (such as in an absolute auction), the starting bid will not be the same as the reserve price.

Learn the Language of LoopNet Auctions by Ten-X

Feeling familiar with the basics of auctions? The next step is to learn some of the specific words and phrases that you'll see when you participate in one of our auctions.

Bid Limit

The bid limit is the highest value at which you can place a bid in an auction. This limit is typically established ahead of time based on the proof of funds that you provided when you registered to bid.

For example, in our auction events, your bid limit will be set at 10% above your approved proof of funds amount. If you want to place a higher bid come auction day, you can upload additional proof of funds or use a bank account connected to Stripe.

Buy Now

Buy Now is an alternative transaction method available exclusively for auction properties on LoopNet. Brokers and owners can choose to enable Buy Now, which allows them to set their own listing price. Then, qualified buyers can log into their LoopNet accounts, sign the confidentiality agreement, review the property's due diligence, and click the "BUY NOW" button to complete their transaction and secure the deal in just 10 minutes.

Buy Now will only be enabled on certain properties. You will see a "Buy Now" button on the property's listing page if it is available for immediate purchase.

Closing

Closing is the final step in a CRE transaction. In this stage, ownership of the property will be officially transferred from the seller to the buyer. The participants will need to review, sign, and authorize various legal documents before they can close.

The Auctions by Ten-X closing period occurs once the auction has ended. Upon receiving a dually executed contract and earnest money deposit (EMD), our closing team works directly with the assigned escrow officer and parties to help facilitate the close.

Custom Bid

A custom bid is a bid in which the bidder chooses to enter their own bid rather than bidding at the current increment value. A custom bid cannot be lower than the current bid increment value.

Data Room

Also known as the data vault

The Data Room is a part of the listing page for each property listed on LoopNet. Here, you can access and review the properties' due diligence documents before the auction date.

You can access the Data Room by clicking the "View Documents" button on the right side of your chosen property's listing page. You must be logged in to your LoopNet account before you can review any due diligence.

Due Diligence (DD)

Due diligence in real estate refers to the process of investigating and evaluating a property before making a transaction. In our online auctions, we collect all due diligence documents for each property during the initial onboarding process, making them available to potential investors before the auction.

The due diligence documents we have available in each property's Data Room include but are not limited to:

Financials
Operating documents
Property Condition Reports or PHASE I (if applicable)
Property visuals
Purchase and Sale Agreement (PSA)

Listing Detail Page (LDP)

May also be called the listing page or property page

Listing detail pages are the pages on LoopNet's website that promote and market the properties available for auction. Each property receives its own customized page that includes:

High-quality photos
Drone footage
3D tour
Due diligence documents

Marketing Agreement (MA)

The marketing agreement is the contractual agreement that Auctions by Ten-X has with the seller to offer the property for sale. You can find the most up-to-date Marketing Agreement Standard Terms.

Marketing Center

Marketing Center is our centralized dashboard to manage your listings. Brokers and sellers can use Marketing Center to view the status of all their listings and track their assets' performance before the auction.

You can access the Marketing Center by clicking the icon in the top left-hand corner of the LoopNet homepage and selecting "Marketing Center" from the menu that appears. You must be logged in to your LoopNet account.

Next Bid Meets Reserve

Next Bid Meets Reserve is a notification that prospective buyers may receive during one of our auction events. If the next bid (following the set bid increments) on a property will meet the reserve approved by the seller, approved bidders will be informed.

Proof of Funds (POF)

Proof of funds is a document or other means of demonstrating that an individual or an entity has enough liquid funds to complete a property purchase. Your proof of funds demonstrates that you have sufficient capital to complete a transaction and cover all associated costs, and in an online auction is used to set your bid limit. For these reasons, providing proof of funds is a necessary step in registering to bid for one of our auction properties. You cannot participate in an online auction on LoopNet if you have not provided sufficient proof of funds and received approval.

The quickest, safest, and most secure way to provide your proof of funds is to use Stripe. See the Stripe section for more details.

Purchase and Sale Agreement (PSA)

May also be referred to as your contract

The Purchase and Sale Agreement is the contract you sign when you purchase a property in an auction on LoopNet.

Reserve Met

Reserve Met is a notification that prospective buyers may receive during an auction event. If it appears, it means that the bidding on that property has reached the reserve price set by the seller. The property will sell!

Seller Bid

A seller bid is a bid placed by the seller during an auction. Auctions by Ten-X may, on occasion, place a seller bid rejecting a bidder's offer if the seller cannot accept the amount in the bid placed by the prospective buyer. Keep in mind that Auctions by Ten-X legally protects the seller's undisclosed reserve, and a seller bid will not be placed if the reserve has already been met.

Stripe

Stripe is a payment processing and financial solutions provider that is partnered with Auctions by Ten-X. Bidders can use Stripe during the registration process to securely link a bank account to provide their proof of funds. Providing proof of funds through Stripe allows for near-instantaneous approval and real-time balance updates. Unlike physical proof of funds, accounts linked with Stripe will not need to be updated every six months.

Ready to put your knowledge to the test? Explore online auctions on LoopNet

Now that you're up to speed on the basics of online auctions, you can check out our active online auction listings to see all these terms in practice.