At an auction, who’s not the seller?

At an Estate Auction held in Nebraska a few years ago, an auctioneer stood up and addressed the crowd,

“Ladies and gentlemen, thank you for attending our auction for the Estate of Edward McAdams; we have a nice inventory of items today, so hold those cards up high so I can see them! Now, this is an absolute auction … everything sells to the highest bidder without a reserve of any kind. Now, let’s get started …”

The auction was underway, and after about 30 minutes, a fairly regular buyer known by the auctioneer interrupted the auction with this announcement,

“Hey, Edward’s kids and grandchildren are bidding on this stuff here today, and they can’t do that! This is an absolute auction, so the seller can’t bid!”

The auctioneers stopped the auction and told the children and other family members of the late Mr. McAdams that this bidder was right — they could not bid as they were beneficiaries of the Estate, and receiving part of the proceeds of the auction.

The auction continued uneventfully, but it raised the question: Was this auctioneer right to prohibit the family of Mr. McAdams from bidding? Is it material that they were named in the will as beneficiaries, or not? Is the family bidding the same as the seller bidding?

Most all auctioneers know that the seller can’t bid, unless at forced sale, at a without reserve (absolute) auction. Yet, in this case of this being an Estate auction, Mr. McAdams was certainly not bidding, and nor was the Estate of Edward McAdams bidding — who was bidding were his children, and grandchilden.

Are Mr. McAdam’s children, grandchildren, or any other relatives for that matter, considered the seller? The answer is “No.”

Are Mr. McAdam’s children, grandchildren, or any other relatives for that matter, considered the seller if they are receiving part of the proceeds as beneficiaries? The answer is still, “No.”

An an auction, the seller is just that — the person having current title to the property for auction; not anyone who had prior title (a previous owner), nor anyone having an interest in the future distribution of proceeds of the auction. Someone does not become a seller because they will receive benefit from the auction.

As we noted in our commentary on attorney Kurt Bachman’s perspective that the auctioneer cannot bid at an absolute auction because he is an agent for the seller, or he is “essentially” the seller, we note here that the auctioneer typically doesn’t have any title to the property being sold, so the auctioneer typically isn’t the seller.

Lastly, there are cases where a married couple or business partners are involved in an auction, where more than one person would have a partial interest (title) in the property being sold at auction. In the case of an absolute auction, could either the husband or wife bid? Could either of the business partners bid? Most court cases have concluded that in these types of situations, both the husband and wife are the seller, or both business partners are the seller, so none could bid at an absolute auction, unless a forced sale.

At an auction, who’s not the seller? Anyone who doesn’t have title to the property being sold.

Who can bid at an absolute auction? Anyone who doesn’t have title to the property being sold.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.

Can auctioneers treat bidders differently?

This post arises out of a request of an attorney some time ago that we, as an auctioneer, require any bidders who were related to the decedent to provide a “pre-approval letter,” while not requiring other bidders, who were not family, to provide the same.

Our answer to our attorney in this case was, essentially, “we can’t do that,” and we suggest your answer as an auctioneer, in similar circumstances, be the same. This issue basically divides into two issues:

• Can an auctioneer give a bidder an unfair advantage?
• Can an auctioneer restrict a bidder with an inequitable disadvantage?

First, it is clear that auctioneers can discriminate (and must discriminate) between bidders based upon their bid amounts. An opening bid of $100,000 is treated differently than another bidder’s opening bid of $95,000, for example.

In regard to giving a bidder an unfair advantage, there is ample evidence this is bad practice.

Without citing the specific cases, I was able to find three such cases in state courts, all east of the Mississippi River. All three involved an under-bidder claiming that the high bidder (and winning bidder in these cases) was afforded an unfair advantage.

Specifically, one such case involved the auctioneer having terms and conditions including requiring all bidders to tender a $10,000 deposit to obtain a bidder number — except that one bidder notified the auctioneer prior to the auction that he, that bidder, had misread the advertisement, and had a cashier’s check for only $5,000 (not $10,000) with him. The auctioneer allowed this bidder to bid, and he was the high bidder. The runner-up bidder sued and won damages due to the auctioneer providing the high bidder better terms than the runner-up bidder, the plaintiff.

A similar case I found involved the high bidder finding out after the auction that another bidder was offered seller financing, while other bidders including him were not offered such financing. Upon discovering that the potentially-seller-financed bidder took the bidding from $50,000 to nearly $90,000, the high bidder was awarded damages including the $40,000 additional he had to bid due to the auctioneer’s (seller’s) providing the other bidder an unfair advantage.

In regard to restricting a bidder with an inequitable disadvantage, there is less court evidence of this being bad practice, but still may be considered unwise.

Some auctioneers have had trouble with some buyers in the past, including bad checks, non-payment altogether or not removing items per the terms and conditions, etc. In these cases, many auctioneers tell these “problem” bidders that they must pay cash, or not buy anything that can’t be removed in a timely fashion — in other words, alter the terms and conditions to restrict a bidder.

While it would appear that it would be difficult for any other bidder to complain about another bidder having to pay cash, while he can pay with cash, credit, debit or a check, for example, another type of potential claim might be made — by the seller.

The seller might see that a certain bidder was inequitably disadvantaged, and claim prices were dampened due to less bidding, causing him to net less in proceeds. While I’ve not found a case just like this, it would seem that to avoid this potential litigation, problem bidders should be treated the same, or if treated differently, only with the client’s prior consent.

In summary, of course if an auctioneer gives any bidder an unfair advantage, he is inequitably disadvantaging all the other bidders; similarly, if one bidder is restricted with an inequitable disadvantage, then all other bidders are provided an advantage. This seems to be a slippery slope to tread, treating any bidder differently than any other.

Can auctioneers treat bidders differently? Yes, they must in regard to their bid amount. Otherwise, a good rule to remember might be, “treat all bidders the same.”

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.

The word auc·tion·eer

As millions of people every day may say this word, do we really know what the word means? It may be interesting to look at the actual word, “auc·tion·eer.”

The word auc·tion·eer is obviously the word, “auction” with the affix “eer.” The “eer” in the English language means someone associated with, concerned with, or engaged in a specified activity, depending upon how the noun (in this case, auction) is used.

Other common examples of nouns ending in “eer” include: engineer, mountaineer, puppeteer, and mutineer.

It seems clear that for the word auctioneer, the common connotation is “engaged in a specified activity” rather than merely associated with, or concerned with.

Many people are associated with auctions, including sellers, buyers, advertising representatives, sales representatives, setup personnel, clerks, cashiers, ringmen, etc. — and they aren’t considered auctioneers due to their “association.” As well, “concerned with” seems to suggest anyone with an interest in, and that too would include many people generally not considered auctioneers themselves.

So, we’re left with the concept of “engaged in a specified activity.”

Many definitions of the word, “auction” denote, generally: “A pubic sale where property is sold to the highest bidder” In this general case, then, an “auctioneer” would be someone engaged in the public sale of property to the highest bidder.”

Let’s look at the words, “engaged in” and see how we might interpret someone who is such, selling property to the highest bidder. “Engaged in” means things like devoted to, employed, undertake, conduct, and many other meanings, depending upon context.

The Random House dictionary, Ed 2010, says an “auctioneer” is a person who conducts sales by auction — so we see the word, “conduct” here. If we use the word, “conduct” then it seems to me the word auctioneer might mean “someone who conducts auctions, selling property to the highest bidder?”

Let’s look at the word, “conduct” and see how that is likely interpreted in regard to an auctioneer. “Conduct” means things like “to behave, manage or direct in action or course.” As we look at prominent auction houses in Europe and the United States, it certainly appears one can “manage and/or direct in action or course” an auction [company or house,] without being an auctioneer — in fact, in that regard, being an auctioneer would be the exception to the rule in those instances.

We’re left with “behave” and behaving implies action (many dictionaries list “perform” as a synonym.) As the state of Ohio, and other states, have said, an auctioneer is “a person who calls for, recognizes and accepts bids,” one might assume the calling, recognizing and accepting is the action or behavior being implied.

Maybe then the word “auc·tion·eer” means someone who performs, carries out, behaves as such by calling for, recognizing and accepting bids, in order to sell property to the highest bidder? I’m comfortable with that.

There are some who argue that anyone who places an item into an auction then becomes an auctioneer. It doesn’t appear to me that this is substantiated with our analysis of the word, “auc·tion·eer,” nor with common perceptions; many people place items into an auction, such as www.ebay.com sellers, all auction consignors (sellers) and others utilizing an auction to sell items either live, by silent bid or online.

Can an auc·tion·eer place items into an auction, being his own auction, with another auc·tion·eer or an online software solution? Certainly. In other words, an auc·tion·eer can have various tools at his disposal to service his clients including a live auction and/or an online auction.

However, does someone become an auc·tion·eer simply by placing items into an auction, for themselves or others? I don’t think so, by our analysis here.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.

The world’s oldest auction house

There are auction houses (locations where auctions are held, typically a type of commercial facility, on some regular basis, as compared to onsite auctions, which take place at the owner’s location, usually once) all over the world.

Who operates the oldest auction house? Where is the oldest auction house located?

From their website, it appears Stockholms Auktionsverk is it.

Stockholms Auktionsverk was founded in 1674, which makes it the oldest auction house in the world still in business today. The house was founded by Baron Claes Rålamb. The clients who have passed through our doors over the years include King Karl XI, who sold hunting rifles for 900 silver daler, King Gustav III who purchased Rembrandt’s “Kitchen Maid”, and August Strindberg, who bought books.

Up until 1993, Stockholms Auktionsverk was owned by the City of Stockholm, but now it is in private hands. Tradition and innovation have proved to be a successful combination, and the company is the leading auction house in Sweden today.

Since 2002, Stockholms Auktionsverk has been domiciled at Nybrogatan 32 and at Magasin 5 in Frihamnen. The company has offices in Stockholm, Gothenburg and Malmö, as well as representatives based at a number of locations in Sweden and the rest of Europe.

The second oldest appears to be: Goteborgs Auktionsverk founded in 1681.

The third oldest appears to be: Uppsala Auktionskammare, founded in 1731.

Sotheby’s was founded in 1744; Christie’s was founded in 1766.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.

Aberrant Auction Law, Michigan #8

This is my eighth “aberrant auction law” find, and numbered as such. When I find more, I’ll attempt to number sequentially, although I hope my searching is generally unsuccessful.

Aberrant auction law refers to auctioneer licensing law (or other auction related law) that is abnormal, odd, bizarre, or otherwise unusual. The basis for determining if an auction law is aberrant is all the other auction law that is out there, which collectively is widely considered normal.

The state of Michigan recently enacted a “voluntary registration” of auctioneers. Here is the text from the Michigan Department of Labor & Economic Growth website:

Required State License(s):

Beginning October 1, 2007, anyone using the title “Registered Auctioneer” will be required to be registered with the Department of Labor & Economic Growth, Bureau of Commercial Services at (517) 241-9288 or visit our website at www.michigan.gov/auctioneers.

A Michigan sales tax license is required for all auctions and may be obtained from the Department of Treasury . You may call the Michigan Department of Treasury; (517) 636-4660; www.michigan.gov/taxes. Please request Form 518 – Registration for Michigan Taxes.

A real estate license is not required to conduct an auction of real property, as long as the auctioneer only “calls the sale” and a real estate broker or attorney performs the closing.

A vehicle broker license is required from the Department of State, Dealer Division if a motor vehicle is to be sold at an auction. You may contact the Department of State, Dealer Division at (517) 373-9460; www.michigan.gov/sos.

Other Possible License(s):

The city/township clerk of the community in which an auction will be held should be contacted to determine if a license/permit is required.

While the idea of a state offering auctioneers the option of voluntarily registering for oversight and consumer protection is not inconceivable, this is unlike any other state in the United States; all other 49 states basically mandate licensing of some sort, or do not require any such licensing.

It appears to me that possibly this is a transitional phase in the state of Michigan, where likely mandatory licensing will be enacted in the coming years. For now, this represents an unusual manner of regulating only some of the auction business in Michigan.

We find Michigan law per Article 29 of the Occupational Code, 1980 PA 299, as amended, aberrant.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.

Why aren’t auctioneers saying, “Sold!?”

I pose this question simply, and not in regard to some backward way of asking why auctioneers aren’t selling something, or doing more or less business. I ask: “Why aren’t auctioneers saying, ‘Sold!?’”

When I attended auction school, decades ago, I remember distinctly (the very first day) that we were taught to say, “Sold!” when we concluded our bid calling, and then announce the price, and then the buyer number.

At our school, The Ohio Auction School, we teach the very same thing to our students. We find the following benefits of such:

• It is clearly understood by all bidders that now bidding is closed
• It succinctly ends the opportunity for the high bidder to retract his or her bid
• It underscores the urgency for bidders to bid promptly if they want to buy
• It gives the auction a jolt of excitement and immediacy
• It communicates to the seller in no uncertain terms they cannot withdraw their item
• It alerts the clerk and other staff that the price and buyer number are forthcoming

What do some auctioneers do instead of saying, “Sold!?” I’ve seen and heard the following methods used over the years:

• “It’s yours,” or “Right here,” or something similar
• “Anyone give $35, $35, $35? $30, to number …”
• “Bidding is concluded at …”
• “He’s got it at …”
• “You bought it at …”
• Gavel bangs the podium …”$30 to number …”

Now, before anyone concludes that there are any legal problems with not saying, “Sold!” please note that there are not. Per the UCC 2-328 (2): A sale by auction is complete when the auctioneer so announces by the fall of the hammer or in other customary manner.

So, any “customary manner” of closing the bid is the same thing as saying, “Sold!” It’s just that it seems to me, and many others, that the best way to conclude bidding is to announce, in no uncertain terms, the item is indeed, “Sold!”

Which brings us to a related legal point. I had an auctioneer tell me, “I don’t ever say, “Sold” at my auctions …” I had to ask why, and the reason given was that this allowed other bidders to still bid up until the contract was signed (real property), and allowed the seller more time to entertain other bids, and/or decide if he wanted to withdraw the property.

So, if I understand this correctly, and applying it to real estate scenarios, the “Sold” in this case would be when a buyer and the seller both had lifted their pens from the contract signing, thus reducing the transaction to writing.

Let’s just say that at an auction, a bidder did come up and offer more than what was offered at the time most auctioneers would have said, “Sold!” but this particular auctioneer had not yet said that … that higher bid could be entertained (unless legally, the auction was closed in some other ‘customary fashion’ which opens us to other legal issues). However, if that auctioneer had the reputation of saying, “Sold!” and closing the auction as such, that last-minute bidder would have known to go ahead and bid before the, “Sold!” to allow his bid to be accepted, right?

(See: http://mikebrandlyauctioneer.wordpress.com/2010/02/18/auctioneers-the-statute-of-frauds/ and http://mikebrandlyauctioneer.wordpress.com/2010/02/19/auctioneers-the-statute-of-frauds-part-ii/)

By not saying, “Sold!” in this auctioneer’s scenario, the completeness of a sale by auction is not materially changed, just delayed. This auctioneer says, “Sold” but says it later, after both parties sign.

Dangerous to conclude an auction without completing the sale? I think so, if for no other reason than the buyer can retract his bid up until the auctioneer announces “Sold!” or the like. By not saying “Sold!” the seller is left with his item, personal or real, in limbo and subject to there being no bids at all as the clock ticks, ticks, ticks … to the contract signing.

Or, from the high bidder’s standpoint, why wouldn’t that bidder ask, “Am I the high bidder? Are you taking no other bids? What’s going on here? Is the auction over or not?” Good questions from our high bidder, which would all be answered by one word: “Sold!”

From the International Auctioneer Championship sponsored by the National Auctioneers Association, to countless state championships, to local auctioneer contests, to thousands of auctions all over the United States nearly every day, attendees will hear the word, “Sold!” to conclude an auction. Yet, in some markets, or areas, I rarely hear the word?

I wonder if the NAA International Auctioneer Championship winner (Men’s division) in 2007, Bryan Knox, for example, said “Sold!” at the conclusion of his items? (I already know, but if you want to watch, and hear, here’s his presentation):

It seems saying, “Sold!” is a very clear communication to all parties involved, and to all auction staff and onlookers. There are other methods used, but I do wonder why.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.

Aberrant Auction Law, Massachusetts #7

This is my seventh “aberrant auction law” find, and numbered as such. When I find more, I’ll attempt to number sequentially, although I hope my searching is generally unsuccessful.

Aberrant auction law refers to auctioneer licensing law (or other auction related law) that is abnormal, odd, bizarre, or otherwise unusual. The basis for determining if an auction law is aberrant is all the other auction law that is out there, which collectively is widely considered normal.

This particular find is certainly more on the side of odd, than troubling. I know of no other jurisdiction that requires this particular submission for auctioneer licensing. Here we have just the first paragraph concerning obtaining a Massachusetts auctioneer license in Massachusetts General Law Chapter 100, Section 3:

Applications for licenses; acceptance of license; service of process.
Section 3. Any person desiring to be licensed as an auctioneer shall make written application, under oath, to the director on a form provided by him. Said application shall set forth the name and address of the applicant and of any other person having a financial interest, direct or indirect, in the business to be conducted by the applicant. Said application shall be accompanied by evidence satisfactory to the director that the applicant is a citizen of the United States, has attained the age of eighteen years, has successfully completed a course of study at a school recognized by the director, and has successfully completed a written examination in accordance with the provisions of section three A of this chapter. Said application shall be accompanied by a license fee in the amount of one hundred dollars, or such other amount as the secretary of administration and finance pursuant to the provisions of section three B of chapter seven shall establish, …

… together with two letters of recommendation for licensure signed by a licensed auctioneer, and elected public official, or member of the Massachusetts bar.

In other words, to be an auctioneer in Massachusetts, even if one completes the necessary schooling, passes the test, and pays all necessary fees, an applicant could still be denied licensure lacking two letters of recommendation — one from a licensed auctioneer and one from an elected public official or member of the Massachusetts bar?

Apparently, yes.

The only similarity widely implemented in several states akin to this is the requirement that one serve an apprenticeship for a year or so before becoming eligible to be a licensed auctioneer. In that sense, the applicant would have to find a single auctioneer to “take them on,” and in essence be similar to finding a single auctioneer to “recommend” them.

Otherwise, we find no similar licensing requirements anywhere where letters of recommendation are required.

We find Massachusetts General Law Chapter 100, Section 3, concerning letters of recommendation, aberrant.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.

How to address online auction ethics

I have titled this post in reference to a post I recently read by Will McLemore titled similarly about unethical auctioneer bid calling techniques.

I recently detailed several unethical bid calling techniques, as Will describes in his post “How to address bid calling ethics in the auction industry” and as I understand Will’s conclusion, online bidding removes the risks of consumers becoming victims of these methods.

Yes, online only bidding removes all risks of consumers being subject to any unethical live bid calling techniques, because at an online only auction, there is no live bid calling.

Paul Harvey would now say what? “You know what the news is, in a minute, you’re going to hear … the rest of the story.” Well, Paul, in even less than a minute.

I am well familiar with online auctions, and most all that are conducted by auctioneers are handled in an ethical, honest, proper and fair manner; just as most all live bid calling by auctioneers is handled in an ethical, honest, proper and fair manner.

But, just as with live bid calling, where some auctioneers choose to implement unethical practices, the online environment is not without unethical practices.

Based upon my observations over the last 10 years, here’s the most prevalent, and troubling methods I’ve witnessed first-hand:

• Misrepresentation Online auctions rely on pictures and descriptions to represent items offered at auction. Some auctioneers take this opportunity to take deceptive pictures (and even alter pictures) and/or falsely describe items offered for auction, and make returning the item because of this misrepresentation difficult, if not impossible.
• T&C Confusion Besides outright falsely describing items, many online auctions confuse bidders with the “It’s perfect in every way, works as new … but sells “as-is” without any warranty or guarantee whatsoever.” Of course, the bidder reads this to mean, “It’s perfect in every way and works as new … and I’m buying it just that way.” When the item is received by the unlucky high bidder, the item isn’t new and/or doesn’t work, and the online auction company says, “But you bought it “as-is” without any warranty or guarantee whatsoever …” leaving the buyer to sue for breach of contract, or sustain the loss.
• Shill bidding While shill bidding is unfortunately prevalent throughout the auction industry, it is particularly utilized in the online auction environment. Sellers, friends of sellers and/or business associates can (and do) sit in their homes on the computer, bidding for the seller to insure a certain price is obtained. Some auctioneers do the same, with one of their staff stationed in a nearby room to the auction gallery with computer and bidder ID, bidding against legitimate bidders, falsely raising prices.
• Fee stacking While online auctions typically detail additional buyer’s premiums, shipping and handling costs, some online auctions add on additional fees and/or charge undisclosed fees, making the actual purchase price much more than the buyer anticipates. Since most of the time, a credit card is already in the hands of the online vendor, the charge is made, and getting a refund can be quite inconvenient and time consuming.
• Non-delivery The online auction buyer often depends upon some sort of shipment service for the delivery of their purchases. Some unethical online auctions report the item is shipped, when it is not, and/or purposely ship the wrong (and often, less in value) item, causing the buyer inconvenience and time consuming reconciliation attempts.

As we noted in referencing an article put out by the FTC, titled “Internet Auctions A Guide for Buyers and Sellers”, Internet (online) auction complaints rank near the top in number, year after year, as reported by the Federal Trade Commission.

Are there unethical live bid calling techniques? Are there unethical online auction techniques?

Yes, there are.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.

Aberrant Auction Law, Ohio #6

This is my sixth “aberrant auction law” find, and numbered as such. When I find more, I’ll attempt to number sequentially, although I hope my searching is generally unsuccessful.

Aberrant auction law refers to auctioneer licensing law (or other auction related law) that is abnormal, odd, bizarre, or otherwise unusual. The basis for determining if an auction law is aberrant is all the other auction law that is out there, which collectively is widely considered normal.

This is two in a row for Ohio; Ohio has a long history of regulating auctioneers. There were auctioneer regulations as far back as the 1800’s, and today’s statutes stem from an overhaul of that preceding law, in 1963.

If we look at Ohio Revised Code Chapter 4707.024 (C) we find the following statute:

(C) Except for the payment of money to the owner or consignee immediately after the end of the auction, a person licensed under this chapter shall pay the owner or consignee with money from the client’s trust or escrow account. In addition, the licensee may pay expenses, including commission and advertisement fees, that are specifically delineated in the auction contract with money from the trust or escrow account. Money in the trust or escrow account shall not be disbursed for any purpose that is inconsistent with this section.

In addition, the money shall not be commingled with the licensee’s personal or business money.

In administering the trust or escrow account, the licensee shall keep detailed records that show deposits, withdrawals, and interest accrued, if applicable. Unless otherwise agreed to by the parties in the auction contract or by the direction of a court of law, all money deposited into a trust or escrow account shall be disbursed to the seller not later than fifteen days after the auction.

Ohio goes on to say in Ohio Revised Code Section 4707.15 and Ohio Administrative Code 901:8-2-08 that auctioneers may be disciplined for “commingling.” In other words, auctioneers in Ohio may not mix personal or business funds with client monies in their trust account.

That seems pretty clear.

However, how does an auctioneer open a trust (checking) account without an initial deposit of his own money? How is an auctioneer expected to maintain a trust (checking) account without paying a monthly bank fee, check printing fee, and the like?

In other words, it is virtually impossible to maintain any type of checking account without depositing at least nominal amounts to open and maintain the account — although auctioneers in Ohio can’t commingle personal funds with client monies without risking disciplinary action.

Further, Ohio requires that an auctioneer have a trust (checking) account open before they are issued an auctioneer license — so it is impossible for any Ohio auctioneer to have client monies from an auction ready to open a trust account, as the account has to be open before those client monies could be available.

We find Ohio Revised Code Chapter 4707.024 (C) and related statutes aberrant.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.

What makes someone an auctioneer?

As we have attempted to count the number of auctioneers in the United States, and so far have estimated about 85,000, another question has come to light. What makes someone an auctioneer?

If first, we look at license states, versus non-license states, there does seem to be an easy answer, as those license states define in their law what they consider an auctioneer to be. For example:

Indiana: 25-6.1-1-3 “Auctioneer” means an individual who is engaged in, or who by advertising or otherwise holds the individual out as being available to engage in, the calling for, the recognition of, and the acceptance of offers for the purchase of goods or real estate at an auction.

Ohio: 4707.01 (b) “Auctioneer” means any person who engages, or who by advertising or otherwise holds the person out as being able to engage, in the calling for, recognition of, and the acceptance of, offers for the purchase of real or personal property, goods, or chattels at auction either directly or through the use of other licensed auctioneers or apprentice auctioneers.

Texas: 1802.111(5) “Auctioneer” means an individual who sells or offers to sell property at auction, with or without receiving consideration, as a bid caller.

Alabama: 4,1 34-1-2 Auctioneer. Any person who has graduated from an accredited auction school and has one year’s experience as an apprentice auctioneer or has two years’ experience as an apprentice auctioneer in bid calling, for a fee, commission or any other valuable consideration, or with the intention or expectation of receiving the same, by the means of or process of an auction or sale at auction, offers, negotiates or attempts to negotiate a listing contract, sale, purchase or exchange of goods, chattels, merchandise, real or personal property or of any other commodity which may lawfully be kept or offered for sale by or at public auction.

Florida: Title 32, 468.382 (1) “Auction business” means a sole proprietorship, partnership, or corporation which in the regular course of business arranges, manages, sponsors, advertises, promotes, or carries out auctions, employs auctioneers to conduct auctions in its facilities, or uses or allows the use of its facilities for auctions. & (2) Auctioneer” means any person licensed pursuant to this part who holds a valid Florida auctioneer license.

Massachusetts: Chapter 100, (1) “Auctioneer”, any person who, for a fee, commission, profit or any other valuable consideration, or with the intention or expectation of receiving the same, by means of, or process of, an auction or sale at auction, offers, negotiates or attempts to negotiate, a listing contract, sale, purchase or exchange of goods, chattels, merchandise, real or personal property, or of any other commodity which may lawfully be kept or offered for sale by or at public auction.

Oregon: 698.635 (2) “Auctioneer” means any person who sells or offers to sell property at auction, either on the person’s own behalf or for another person.

…and the list goes on with very similar definitions in other license states.

Most license states require some sort of auction schooling, paying a fee and passing a test. Some license states require an apprenticeship period be served under an existing licensed auctioneer.

This question of “what makes someone an auctioneer?” is a bit more complex, as auctioneers around the country discuss it. For example, some auctioneers define the term “auctioneer” like this: Someone who …

• Does bid calling for a profession
• Works as their primary occupation as an auctioneer
• Holds themselves out as an auctioneer
• Contracts with sellers to sell their property at auction
• Conducts auctions by personally accepting bids, and declares sold
• Runs a company, hiring auctioneers as bid callers
• Makes at least 50% of their income as an auctioneer
• Has graduated from auction school
• Says he is an auctioneer

In regard to that last thought listed above, in some non-licensed jurisdictions, basically anyone can say that they are an “auctioneer” but would that alone make them one? I might argue that if they merely say that they are an auctioneer, that’s not enough. However, if they hold themselves out as an auctioneer, via a website, or other advertising, and are willing and able to provide services as an auctioneer upon request of a client, then they are an auctioneer.

As Potter Stewart so noted in the famous U.S. Supreme Court Case Jacobellis v. Ohio 378 U.S. 184 (1964), albeit in regard to obsenity in a movie, his quote may apply here: “I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that. ”

Most remember: “I know it when I see it.”

In other words, maybe we could look at anyone and say, they are or are not auctioneer, but not really come up with a firm, set definition of what an auctioneer is? Maybe we just know it when we see it?

What’s my definition? I would say this:

An auctioneer is someone who proclaims publicly he is an auctioneer, being someone who has the authority to accept bids from bidders, and the authority to declare items sold, at an auction, through the use of their own bid calling ability or that of another auctioneer, being an individual, partnership, LLC, corporation or other entity, with the capacity to act as such, including the necessary licensing in the state or other areas they claim to operate as such, and with the willingness and abilities as an auctioneer to service his own interests or clients as such, whether those clients are sellers or other auctioneers or auction companies.

What’s your definition? What makes someone an auctioneer?

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.