Most states require auctioneers to have a license or auctioneer surety bond before they can call auctions. Though the definitions of an auctioneer vary, the general rule is that any individuals who sell things to the highest bidder during an auction must have an auctioneer bond.

There are exceptions that prove the rule, such as:

• People selling their own property
• Government officials who act in their official capacity
• Administrators and executors of estates
• Nonprofit and charitable organizations

Depending on where the auctioneer is located, the auction surety bond can be a fixed rate or a percentage of the total bond amount. Auctioneer bonds are usually low-risk, so companies won’t run credit checks before they issue one. However, they can check this to determine pricing and eligibility.

Every state can be different, so the auctioneer bond cost varies.

Is a surety bond required, and when? Typically, independent auctioneers working in auction houses must obtain an auctioneer bond in these states:

• Washington
• Virginia
• Pennsylvania
• Ohio
• New York
• New Hampshire
• Mississippi
• Massachusetts
• Louisiana
• California
• Alabama

Those states also require auctioneer bonds before the licensing process starts.

Typically, surety bond companies give the auctioneer a completed bond form so that the relevant agency can fill it out. Usually, states require the seal from the company that issues the bond. Auctioneers must include this information:

• Power of Attorney
• Bond amount
• Effective date of the auctioneer bond
• Name of the license type and obligee
• State of incorporation and surety company name
• Legal name of the person buying the auctioneer bond

If an auctioneer is required to obtain an auctioneer bond, they must adhere to the state and local regulations pertaining to the job. Here are some best practices:

• Adhere to consumer contracts.
• Don’t engage in acts of fraud, such as false bidding.
• Pay taxes, fines, and fees on time.
• Maintain a record of all transactions.
• Create written contracts for the items sold.
• Provide the goods paid for.

The auctioneer bond is legally binding, and there are three parties:

• Surety – This is the company issuing and underwriting the auction bond.
• Obligee – They determine the bond requirements needed and can file claims against the auctioneer bond.
• Principal – This is the person who is bonded (auctioneer). They typically work at auction companies, but it could be called an auction house.

If the state or obligee files a valid claim, and the principal (auctioneer) won’t or can’t pay, the surety will pay off the auctioneer bond claim up to the full value. However, there are usually interest and other fees involved.

Typically, the auctioneer bond cost offsets the surety company’s need to pay if the bonded person doesn’t pay out.

Overall, the auctioneer bond is an incentive for auctioneers to follow the codes of conduct and rules in their state. Otherwise, they’re financially responsible for the damages they cause. Likewise, an auctioneer bond guarantees that those injured by the auctioneer can get justice (monetary restitution).

You can rely on our service, and we make the process for getting an auctioneer bond easy. Auction professionals must understand the state regulations pertaining to what they do, and we can help them get an auctioneer bond when needed.

Typically, credit score problems aren’t an obstacle when obtaining an auction bond. While bad credit applicants can get turned down, we will determine each person’s financial stability and potential financial losses. This means you get the best service possible.