Auction Conduct, Bidding, and Sale Procedures
The Auction Conduct, Bidding, and Sale Procedures domain tests how the auctioneer runs the sale: announcing terms, recognizing bids, applying the reserve, handling tie or disputed bids, and closing the sale. The auctioneer should announce before bidding whether the sale is with reserve or absolute, the buyer's premium, payment and removal deadlines, sales tax treatment, condition and inspection limits, and how disputes will be resolved.
Conduct rules
- With reserve, the seller is not obligated to sell unless the reserve is met; the auctioneer may withdraw the property or announce no sale.
- In an absolute auction, the property must be sold to the highest bidder regardless of price, and undisclosed seller bidding is improper.
- The auctioneer controls bidding increments and recognizes bidders, but discretion must not be used arbitrarily or to mislead.
- A tie bid is generally resolved by the auctioneer's recognition of the first valid bidder or by reopening bidding under the announced terms.
- Seller bids, by-bidders, or shill bidding must not be used to create a false price. Any permitted seller participation must be disclosed.
- Online and absentee bids must be handled under the same announced terms; the auctioneer should preserve the bid record.
Worked example
A parcel is offered with reserve at $50,000. The highest bid is $48,000. The auctioneer says sold, then learns the reserve was not met. Under a with-reserve sale, the auctioneer should not have closed at $48,000; the proper result is no sale unless the seller lawfully waives the reserve before the sale is complete. If the auction was announced absolute, the $48,000 bid would be the sale price.
Traps
Do not make a chandelier bid or accept a fictitious bid to raise the price. Do not treat a reserve as met merely because bidding is fast. Do not change absolute versus with-reserve status after bidding begins.