We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is an Absolute Auction?

Malcolm Tatum
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

An absolute auction in which the individual or company providing the highest bid is the winner and recipient of the auctioned item, upon successfully delivering payment to the seller. Typically, an absolute auction does not have a reserve price that must be met, meaning that none of the bids submitted have to be over a certain amount in order to qualify. This is in contrast to other types of auctions in which a reserve price must be met or the seller has the option of not honoring that highest bid and instead remains in possession of the item.

There are a number of different situations in which an absolute auction may take place. One of the more common has to do with the sale of foreclosed property. In some jurisdictions, owners of foreclosed properties will choose this type of auction as a means attempting to sell the property as soon as possible. By choosing to not designate a reserve or minimum price that bidders must meet in order to have a chance at winning the property, the seller increases the chances of at least recouping some of the losses on the property sooner rather than later. Institutions holding titles to foreclosed properties sometimes use this method when the property has been vacant for an extended period of time and the costs of upkeep are becoming less cost-effective in relation to the actual value of the property itself.

An absolute auction strategy may also be used with other types of auctions, normally when the focus of the owner is on selling the items without expecting any minimum amount for those items. This approach may be used as a means of selling assets associated with an estate, such as jewelry or artwork. The idea is usually to dispose of the items quickly and generate whatever revenue can be realized, while also allowing the former owner to avoid incurring any more costs related to owing those assets, such as storage fees at a warehouse or the cost of maintaining insurance on the items.

Even online auction sites may be structured to allow for an absolute auction. This is true with sites that do not require sellers to set any type of minimum or reserve price that must be met. When this is the case, even a very low bid will be sufficient to win the item, even if there are no other bidders. Just as with public auction houses that allow clients to go with a reserve price for each auction or dispense with the requirement of a minimum bid, online auction sites are likely to charge some sort of fee to the seller, usually based on the amount of the winning bid.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Link to Sources
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.