IN Auctioneer flashcards

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Indiana Auctioneer Commission

The state body within the Indiana Professional Licensing Agency that issues auctioneer and auction company licenses, investigates complaints, holds hearings, and adopts administrative rules at 876 IAC.

IC 25-6.1

Indiana's Auctioneer Licensing Act. It defines auctioneer and auction company, sets licensure qualifications and exemptions, and authorizes discipline, with operational detail supplied by commission rules.

Auction company license

A separate license issued to a business that conducts auctions. The company must designate a licensed auctioneer as its principal, and the company license depends on that individual's license.

Continuing education requirement

Indiana requires approved continuing education before each license renewal, with the hour count and subject mix set by commission rule; licensees keep completion certificates in case of audit.

Trust account rule

Money held for sellers or buyers, such as deposits and settlement proceeds, must be kept in a separate escrow or trust account and never mixed with the licensee's operating funds.

License number in advertising

Auction advertising must identify the licensed auctioneer or auction company responsible for the sale and show the license number, allowing the public and the commission to trace accountability.

Unlicensed auctioneering

Calling an auction for compensation without a valid Indiana license exposes the caller to civil penalties and injunctive action by the state and can jeopardize resulting sale contracts.

Fiduciary duty

The auctioneer's obligation to act in the client's best interest with loyalty, disclosure of material facts, confidentiality, reasonable care, and accurate accounting of money and property handled.

Shill bidding

Placing fictitious or seller-generated bids to inflate price. It is deceptive, is barred unless a reserve-based seller bid is permitted and disclosed, and can void the sale and the license.

Disclosure of dual interest

Before the sale, an auctioneer who intends to bid on or buy consigned property, or who holds a personal interest in a lot, must disclose that interest in writing to the seller.

Commingling client funds

Depositing client money into the licensee's business or personal account. It is prohibited because it makes tracing seller and buyer funds impossible and can conceal shortages.

Bid rigging

An agreement among bidders not to compete, or to divide purchases, so the seller receives less than a competitive price. It is prohibited collusion and may also be a crime.

Reserve confidentiality

The auctioneer should not reveal the seller's confidential reserve or a bidder's maximum bid; disclosing a reserve beyond what the seller authorized breaches the duty of confidentiality.

Exclusive right to sell

A listing in which the seller owes the commission regardless of who produces the buyer, including when the seller sells the property privately during the listing term.

With reserve auction

The seller may withdraw a lot before the auctioneer completes the sale, and the lot need not sell if bidding fails to reach the reserve. Reserve status is the default under UCC 2-328.

Absolute auction

A no-reserve sale in which the property must go to the highest bidder once bidding is opened, and the seller cannot withdraw a lot because the price is unsatisfactory.

Fall of the hammer

Under Indiana's UCC IC 26-1-2-328, an auction sale is complete when the auctioneer announces completion by fall of the hammer or another customary manner, contracting with the high bidder.

Bid retraction

A bidder may withdraw a bid at any time before the auctioneer announces completion of the sale, but retracting a bid does not revive any earlier bid on that lot.

Listing agreement contents

The written seller contract should state parties, sale date and place, commission and fees, reserve, buyer's premium, tax handling, expenses, insurance, withdrawal rights, and the settlement date.

Seller's title warranty

The consignor warrants good title and authority to sell. Auctioneers should obtain ownership statements and lien releases so buyers receive clear title at settlement.

Terms of sale disclosure

Advertising and pre-sale materials must state the buyer's premium, sales tax, payment methods, removal deadlines, and whether the sale is held with reserve or absolute.

Opening terms announcement

At the start of bidding the auctioneer announces reserve status, bid increments, tie handling, payment and removal rules, and that the auctioneer resolves bidding disputes.

Preview period

A scheduled inspection window before bidding closes that lets bidders examine lots and condition; defects known to the auctioneer should be disclosed rather than hidden.

Soft close

An online auction rule that extends closing time for a lot whenever a bid arrives in the final minutes, preventing last-second sniping and imitating competition in a live sale.

Catalog description accuracy

Lot descriptions must identify property accurately and disclose known defects, repairs, restoration, and material provenance; an error found before closing should be corrected and announced.

Auctioneer's dispute authority

Announced terms usually make the auctioneer's decision final on tie bids, disputed bids, and bidding errors, and allow reopening bidding to correct a clear mistake.

Buyer total cost

Hammer price plus buyer's premium plus applicable sales tax plus other disclosed fees. Example: a 1,000 hammer with 10 percent premium and 7 percent tax totals 1,177.

Seller net proceeds

Hammer price minus commission minus seller-paid fees and expenses. With a 1,000 hammer and a 20 percent commission, the seller nets 800 before any additional charges.

Indiana sales tax rate

Indiana imposes a 7 percent state sales tax with no additional local tax, applied to retail sales of tangible personal property and generally including both hammer price and buyer's premium.

Settlement statement

An itemized accounting to the seller listing each lot's hammer price, gross receipts, commission, fees, taxes, and the net amount due, delivered by the contract deadline.

Commission base

The figure the commission percentage is applied to, usually the hammer price rather than the premium-inclusive total, so the contract should define the base explicitly.

Auction record retention

The licensee keeps the consignment contract, bidder registrations, clerking sheets, advertising copies, exemption certificates, and settlement statements for the period set by rule, available for inspection.