Absolute Auction

DEFINITION of 'Absolute Auction'

A type of auction where the sale is awarded to the highest bidder. Absolute auctions do not have a reserve price which sets a minimum required bid for the item to be sold. One type of absolute auction relates to foreclosed properties, where the winning bid acquires the foreclosed property. This is opposed to a lender confirmation auction, where the lender must approve the bid in order to complete the transaction.

BREAKING DOWN 'Absolute Auction'

An absolute auction can occur in various venues including the foreclosure marketplace, the online marketplace (such as eBay.com) or live auction events. In this type of auction, the highest bidder "wins" the item, whether it is real estate property or any other type of product. Absolute auctions are often implemented where there is an immediate demand to sell an item.

RELATED TERMS
  1. Lender Confirmation Auction

    A type of foreclosure auction where the highest bid must be approved ...
  2. Reverse Auction

    A type of auction in which sellers bid for the prices at which ...
  3. Reserve Price

    A minimum dollar amount that the owner of an item up for auction ...
  4. Dutch Auction

    1. A public offering auction structure in which the price of ...
  5. Chandelier Bid

    A bid that is announced by an auctioneer during an auction that ...
  6. Auction

    A system where potential buyers place competitive bids on assets ...
Related Articles
  1. Home & Auto

    Should You Buy A House At Auction?

    The traditional real estate market isn't the only place to conduct your home search. Auctions also bring many buying opportunities.
  2. Home & Auto

    Should You Buy A House At Auction?

    In theory, many of the best properties are auctioned. But auctioned properties aren’t always hidden gems.
  3. Stock Analysis

    eBay vs. DealDash: Comparing Auction Sites (EBAY, PYPL)

    Learn how the bidding process works at DealDash and eBay, and discover the potential pitfalls when making bids at these auction sites.
  4. Budgeting

    3 Reasons To Buy Government Surplus for Your Small Business

    Learn why it's wise to access government surplus auctions to buy furnishings, equipment and other items to start a new business or expand an existing business.
  5. Investing

    What's a T Bond?

    Treasury bonds, or T-bonds, are marketable securities issued by the US government, and are available in increments of $100. Bonds have a maturity range of ten to 30 years, with 30 being the most ...
  6. Budgeting

    3. Government Auctions

    Buying a used car usually takes a little extra effort, but it can save most buyers a considerable amount of money.
  7. Bonds & Fixed Income

    The History Of The T-Bill Auction

    Learn how the U.S. found the perfect solution to its debt problems and ended up creating one of the largest markets in the world.
  8. Investing Basics

    The Auction Method: How NYSE Stock Prices are Set

    The New York Stock Exchange (NYSE), sometimes referred to as “the big board,” is the oldest and largest stock exchange in the United States. NYSE is the place investors think of when ...
  9. Entrepreneurship

    The Top 3 Women-Owned Businesses in Phoenix

    Learn about several of the top companies owned by women in the Phoenix metro area, and discover how these firms are succeeding in Arizona and around the world.
  10. Investing

    Pros and Cons of Buying a Foreclosed Home

    What are the benefits and drawbacks of purchasing a foreclosed home?
RELATED FAQS
  1. What does it mean when my broker says that shares are for auction?

    An auction market is one in which stock buyers enter competitive bids and stock sellers enter competitive offers at the same ... Read Answer >>
  2. What are the maturity terms for Treasury bonds?

    Learn how treasury bonds pay interest, when they reach maturity and the differences between terms for treasury bonds and ... Read Answer >>
  3. What is an odd-lot buyback?

    An odd-lot buyback occurs when a company offers to purchase shares of its stock back from people who hold less than 100 shares. ... Read Answer >>
  4. How are treasury bill interest rates determined?

    Find out why interest rates for U.S. Treasury bills are determined at auction and how so-called "competitive" bidders impact ... Read Answer >>
  5. How can a company or entity challenge the absolute advantage of another company?

    Understand what absolute advantage is, and learn how a company or entity can challenge the absolute advantage of another ... Read Answer >>
  6. What are some real life examples of absolute advantage?

    Learn about absolute advantage, comparative advantage and their impact on trade through a real-world example involving call ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center