Learn to be a good auction consumer and a little disclaimer. When a consumer seeks a product or service, it is always wisest to practice being a GOOD consumer. Being a good consumer using auction to purchase or sell anything means understanding the auction business and auctioneers. This and subsequent articles written concerning auction should not be considered legal advice. If a consumer has questions of a legal nature, those questions should be addressed to an attorney familiar with the laws and regulations governing the auction industry. It is time to start learning about being a good consumer at auction.
Here are some areas where laws for auctions can be found. Arizona does not have an auctioneer licensing law which could give the consumer an idea about the terminology used by, and responsibilities of, auction companies and auctioneers. In Arizona the legal guidelines for personal property are written in the Federal Uniform Commercial Code-Article 2-Sales. Some cities have their own license, bonding, and administrative regulations, but legal accountability is to the UCC. Arizona only requires a business license for reporting sales taxes collected. Phoenix requires all auctioneers and auction houses to annually obtain special city licenses. Real estate auctions are different because all real estate transactions are governed by the Arizona Department of Real Estate and the Real Estate Commissioner.
There are two types of auction sales. One is the without reserve, no reserve, or absolute sale. That means the last and highest bid will win the item being presented for sale. The owner or consigner has not restricted the selling price of the item. Just bid on it, be the highest and final bidder, and you own it.
The other type of auction is the with reserve auction. All auctions, and items sold at auction, are with reserve unless it is published or stated there is no reserve for a sale or an item. This does not mean everything has a minimum or reserve price. It does mean that there can be. There is no requirement for the auction company or auctioneer to disclose that an item has a reserve or how much of a reserve.
Confused or need more clarification? Feel free to make comments or ask questions. Two more resources are: Arizona State Auctioneers Association (ASAA) National Auctioneers Association (NAA)