Auctioneering Fundamentals and Terminology
Core vocabulary
A candidate must be fluent in the vocabulary that drives auction mechanics. Know the difference between an absolute auction (property sells to the highest bidder regardless of price) and a reserve auction (seller may reject bids below a stated minimum). Distinguish with reserve from without reserve, and understand that "absolute" is a term of legal significance, not marketing. Other tested terms: bid caller, ringman, clerk, chant, bid increments, jump bid, by-bid (a bid made to inflate price - prohibited), shill, hammer price, buyer's premium, consignor/consignee, lot, catalog, and upset price.
Mechanics and ethics
Understand the auction method's three phases: marketing/listing, the sale event, and settlement. Know the auctioneer's role as agent of the seller (fiduciary duty: loyalty, disclosure, accounting). Understand puffing (illegal misrepresentation of value) versus permissible opinion. Know who bears risk of loss before and after the fall of the hammer.
Traps
Questions love the "absolute" trap: describing an auction as absolute when the seller retains a right to confirm or reject. Another trap is confusing a buyer's premium (added to hammer price, paid by buyer) with a commission (deducted from seller proceeds). Watch for by-bidding disguised as "seller bidding to protect value" - it is unlawful in Texas. Also watch for the difference between an opening bid and a starting bid.
Rule of thumb
If the seller retains any discretion to accept or reject the final bid, the auction is with reserve - never describe it as absolute.
Worked example: Hammer price $10,000, buyer's premium 10%, seller commission 8%. Buyer pays $11,000; seller nets $9,200 (before other fees).