NC Auctioneer flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Auctioneer Licensing Board

The North Carolina agency that issues auctioneer, apprentice, and firm licenses, adopts rules, investigates complaints, and imposes discipline including suspension, revocation, and civil penalties.

Apprentice auctioneer

A licensee who conducts auctions only under the supervision of a licensed auctioneer and must complete the required apprenticeship hours before qualifying for a full auctioneer license.

Firm license requirement

A separate license issued to the business entity through which auctions are conducted; an auctioneer must be affiliated with a licensed firm or auction house to auction lawfully.

Grounds for discipline

Conduct supporting Board action, including application misrepresentation, trust account violations, failure to remit funds, fraudulent bidding, and unprofessional conduct after notice and hearing.

Fiduciary duty to seller

The auctioneer's obligation of loyalty, confidentiality, disclosure, accounting, and obedience to lawful contract instructions owed to the seller or consignor who engaged the auctioneer.

Auction record contents

A written record identifying the seller, lots, buyer, hammer price, date, and settlement figures for each auction, kept for the required period and open to Board inspection.

Disclosure of interest

The auctioneer's duty to reveal any ownership interest in goods sold, any compensation received from buyers, and any relationship that could affect impartiality toward bidders or sellers.

Commingling prohibition

Client funds, including deposits and sale proceeds, must be held in a designated trust or escrow account and may not be mixed with the auctioneer's operating or personal funds.

Absolute versus reserve

An absolute auction sells to the highest bidder regardless of price; a reserve auction lets the seller decline bids below a stated minimum, and the status must be disclosed.

Buyer's premium

A disclosed percentage added to the hammer price and paid by the buyer as compensation; it must be announced or published before bidding begins.

Scope of auctioneer agency

The auctioneer acts for the seller under the written contract and disclosed terms of sale; no agency with the buyer is created merely by the buyer's registration or bidding.

Dual agency consent

Acting for both buyer and seller requires the informed written consent of both parties, and confidential information from one may not be used against the other.

Knockdown moment

The fall of the hammer or the auctioneer's declaration of 'sold' accepts the highest bid, forms the sale contract, and ends the bidder's right to withdraw.

Reserve not met

When bidding fails to reach the reserve, the auctioneer may pass or withdraw the item; no sale occurs and the seller keeps the property.

Shill bidding

Bidding by or for the seller, or by the auctioneer on the seller's behalf, without disclosure, to inflate price; it is prohibited and may void the sale.

Auctioneer's bid control

The auctioneer recognizes bidders, sets increments, may reject bids, may reopen bidding on a dispute before knockdown, and generally determines the winning bidder.

Trust account reconciliation

Regular comparison of trust account records to bank statements, showing each deposit and disbursement and the balance attributable to each client, kept for inspection.

Settlement statement

A written accounting to the seller showing gross proceeds, buyer's premium, commission, authorized expenses, and the net amount due, rendered within the required time.

Prompt remittance rule

Sale proceeds must be remitted to the seller within the contract or rule deadline; delay or retention of client funds supports discipline and may be treated as conversion.

Earnest money escrow

Real property deposits held in escrow and released only per the purchase contract or with written authorization from the parties, with records of each disbursement.

Residential property disclosure

North Carolina requires most residential sellers to provide a written disclosure of known material defects; auction terms should state its availability before bidding.

Real property ad content

Advertising must state auction date, time, location, property description, and absolute or reserve status, and may not misstate the property, terms, or title condition.

Knockdown purchase contract

At a real property auction the high bidder typically signs a purchase contract and pays earnest money at knockdown, with closing later under the contract terms.

Contingency announcement

The auctioneer must announce whether the sale is subject to seller confirmation, financing, or other conditions, and may not imply clear title where exceptions exist.

Consignment defined

A bailment for sale in which the consignor retains title until sale and the auctioneer holds and sells the goods as a fiduciary for the consignor.

Consignment agreement terms

The written agreement should state commission, reserve, sale date, handling of unsold items, authorized fees, and the consignor's withdrawal rights.

Encumbered consigned goods

Consigned property subject to a lien or security interest must be disclosed by the consignor, and the auctioneer should not sell it without addressing the lien.

Unsold item handling

Items that fail to sell are returned, reoffered, or stored as the consignment agreement provides; storage or disposal fees apply only if the agreement authorizes them.

Chapter 75 reach

North Carolina's Unfair and Deceptive Trade Practices Act covers deceptive auction advertising, misrepresented condition or value, and bait-and-switch practices.

Truthful advertising rule

Auction advertising must state material terms, including buyer's premium and reserve status, and may not omit facts that would affect a bidder's decision to bid.

Absolute ad mismatch

Advertising a sale as absolute while imposing a reserve, or advertising goods not available as represented, is a deceptive practice subject to Board and Attorney General action.

Undisclosed post-sale fees

Fees imposed after knockdown that were not disclosed in the terms of sale are prohibited; refund and dispute policies must be disclosed before bidding and applied consistently.