What is the definition of a buyout in an auction?

In the context of an auction, a buyout refers to a scenario in which a buyer agrees to purchase an item at a predetermined price before any bids are commenced. This means that the buyer essentially "buys out" the item, often eliminating the need for an open bidding process. This can expedite the sale and provide certainty to both the buyer and seller, as the item is guaranteed to be sold without the variability that a bidding war might bring.

This approach is particularly beneficial in auctions where a seller wishes to ensure a quick sale, or when the value of the item is clear and the seller feels confident that the buyout price reflects its worth. It allows for the transaction to proceed smoothly and can be appealing in scenarios where traditional bidding may take longer or not yield a satisfactory outcome.

The other options do not accurately convey the defined concept of a buyout. The cancellation of an auction, the specifics of sealed bids, and the process of selling to the highest bidder all reflect different auction scenarios that do not align with the definition of a buyout.