What is meant by "hammer price" in an auction context?

In an auction context, "hammer price" refers specifically to the price at which the auctioneer declares an item sold. This designation occurs when the auctioneer brings down the gavel (or hammer) after accepting the highest bid for an item, thereby finalizing the sale. The hammer price is significant because it represents the agreed-upon selling price between the buyer and the seller, marking the moment when the item legally changes hands.

This term underscores a crucial aspect of auction operations, as it distinguishes the final sale price from potential other figures like the opening bid or reserve prices. Unlike the opening bid, which is the initial amount proposed for bidding, or the reserve price, which is the minimum amount a seller is willing to accept, the hammer price is the definitive figure that concludes the bidding process. Additionally, other costs, such as buyer's premiums or taxes, may be added to the hammer price, but these do not affect the final sale declaration.