What Is an Absolute Auction?

What Is an Absolute Auction?

An absolute auction is an auction with no established minimum reserve price where the sale of the item is rewarded to the highest bidder regardless of the monetary amount of the bid. Absolute auctions are used when the seller wants or needs a quick sale.

Absolute auctions are commonly used to sell foreclosed homes or commercial properties and repossessed vehicles or equipment. Online auction websites such as eBay offer sellers the choice of using this type of auction. If the seller does not have complete equity in the property being sold, an absolute auction cannot be used because a third party, normally a lender, still has interest in the property.