What happens during an absolute auction?

An absolute auction is characterized by the sale of property to the highest bidder without any reserve price. This means that the seller cannot set a minimum bid or withdraw the property from the auction once it begins, ensuring that the property will be sold regardless of the final bid amount. This format is particularly attractive to bidders, as it creates an environment of excitement and competitiveness, knowing that they have the opportunity to acquire the property regardless of its perceived value.

In contrast, bidding that starts at a predetermined amount suggests the presence of a reserve, which can lead to the seller retaining the right to withdraw the property if the bidding does not meet their expectations. Similarly, requiring all bidders to qualify before attending is not a standard feature of absolute auctions; the open nature supports inclusivity for all interested parties without heavy pre-qualification requirements. The option that indicates a seller can retract their items at any time fundamentally contradicts the principle of an absolute auction, as it negates the firm commitment to selling the property to the highest bidder.