What is an Auctioneer Bond?
The auctioneer surety bond is a type of bond which local governments request of individuals, as a requirement for receiving their auctioneering business license.
In many states, future auctioneers are required to post this bond during their licensing process. This bond is typically requested by the local Licensing Board, the Secretary of State, or another similar institution.
An auctioneer bond, also called an auction bond, is a form of guarantee that licensed and bonded auctioneers will comply with state regulations pertaining to their business. It guarantees the ethical and honest performance of their duties, such as accounting for all payments they receive.
The auctioneer bond protects the public from auctioneer fraud, false advertising, misrepresentation, or mishandling of items, and any other type of illegal behaviour. It provides customers with the right to file a claim if the auctioneer is found to have caused them any financial damage.
The auctioneer bond is an agreement between three parties, like all other bonds: the principal (the auctioneer), the obligee (the public and the government institution requesting the bond), and the surety bond company that backs the bond financially.
Whenever an auctioneer is found to be in breach of their obligations, consumers can file a claim against their bond and receive compensation by the surety within the maximum penal sum of the bond. An auctioneer who faces a legitimate claim against their bond must compensate their surety in return for any financial backing they have extended to the claimant on the auctioneer’s behalf.
Questions about Auctioneer Bonds
Who needs to obtain an auctioneer bond?
Auctioneer bonds are necessary for auctioneers in some– but not all– states. Many states do not require auctioneers to get bonded. Consult with your local licensing board to find out whether you need an auctioneer bond.
Are there different types of auctioneer bonds?
Depending on the state, there may be differences between the types of auctioneer bonds required. Some states require bonds for individual auctioneers and for auction companies, while in others, these bonds cover different industries. In the latter case, the kind of bond you get depends on what you are auctioning.
How much does an auctioneer bond cost?
Auctioneer bond cost depends on the amount of the auctioneer bond in each state. Bond cost is a fraction of that amount, and is determined by sureties on an individual basis.
Bond amounts for these bonds range between $2,000 and $50,000, depending on the state and its regulations. For example, Ohio requires auctioneers to post a $50,000 or $25,000 bond; California a $20,000 bond; Alabama, Massachusett, Virginia, Mississippi, Louisiana and Rhode Island a $10,000 bond; New York a $2,000 or $5,000 bond, etc.
When determining your rate, also known as your surety bond premium, your surety will take into account a number of financial indicators of your financial stability. The most important among these is your personal credit score, but your financial statements and industry experience are typically also considered.
Depending on these factors, your surety will offer you a rate of between 1%-5% if you have a perfect or high credit score, a so-called standard market rate. For those applicants whose credit score is lower, sureties typically offer rates between 5%-10% of the total bond amount.
For example, in order to obtain an auction bond at a standard market rate in California, you would pay somewhere between $200 and $1,000.
To get a free, no-obligations quote on your bond, simply submit your surety bond application.
Can I get an auctioneer bond with bad credit?
Credit problems shouldn’t be an obstacle when applying to obtain an auction bond. Although bad credit applicants may get turned down elsewhere, Lance Surety Bonds’ Bad Credit Surety Bonds program enables them to get bonded without trouble.
Lance Surety Bonds works with a number of highly-respected and reliable surety partners, all of which are A-rated and T-listed companies. This allows us to locate the best bonds and lowest rates for all of our clients, regardless of credit type.
How to get your auctioneer bond
Apply online through our easy-to-use application tool and submit your application within a minute. Approval times for these bonds are short, and you will soon receive your free bond quote.
Call us at (877)-514-5146 if you would like to know more about bonding requirements in a particular state. We have plenty of experience in issuing these bonds, and our surety bond experts can respond to all your questions.
Auctioneer license requirements and renewal
Licensing and renewal requirements for auctioneers differ greatly from state to state. Therefore, it’s best that you check with your local licensing board about the prerequisites to getting an auctioneer license. Some commonly required items are:
- Completing a study course
- Successfully passing an exam
- Submit a criminal history record
- Photo identification and fingerprints
- An auctioneer surety bond
- License application
- License, application fee and/or examination fee