What is an Auctioneer Bond?
An auctioneer bond is a type of surety bond required in several states for auction professionals. This bond is a component of the licensing process for auctioneers getting their business license through the state.
Auctioneers need a bond to guarantee that they will perform the duties of their job in line with state regulations. If an auctioneer doesn't follow the state’s regulations, then a claim can be made against them to offset financial losses that may have occurred.
Not all states require an auctioneer bond as part of the licensing process. For states that do, a bond protects the public from illegal or misleading business practices. These activities may include fraud, mismanagement of payments, inaccurate or deceptive advertising, or other misrepresentation.
If you would like to learn more about what surety bonds are and how they work, you can read our detailed guide here.
Who Needs to Obtain an Auctioneer Bond?
Every state has different requirements for auctioneer licensing, so it’s important to check your state and county laws closely.
About half of the states in the U.S. have a comprehensive licensing checklist for auctioneers that includes obtaining an auctioneer bond. States that don’t require auctioneer licensing may still require an auctioneer bond in some counties, municipalities, or for specific auctioning practices.
Are There Different Types of Auctioneer Bonds?
Auctioneer bonds refer to bonds that give individual auctioneers the ability to run auctions in their state or county.
Other bonds that fall under the same category of auctioneer bonds include auction house bonds, auction clerk bonds, and apprentice auctioneer bonds. These bonds may be obtained for other members of an auctioneer’s team so that they can legally run a successful business. The type of bond you need will depend on your state laws and what your business goals are.
What Does an Auctioneer Bond Cost?
Like other surety bonds, an auctioneer bond is priced as a percentage of the total bond amount. Typically, this percentage varies between 1 to 5%, depending on factors like personal credit, business financials, and past bond claim history. If you have bad credit, you can still get an auctioneer bond, but the percentage of the bond amount you pay may be higher.
The amount of the bond you need will depend on the state where you perform your auctioneer duties. Some states require up to $10,000 to get your license, but you’ll only pay a percentage of the total. For example, if your rate is 3%, you’ll pay $300 as your bond premium for your $10,000 auctioneer bond.
How to Get an Auctioneer Bond
Securing an auctioneer bond to meet licensing requirements is a simple process. You can complete a brief form online to get started, providing information about where your business is located and the amount of bond you need. The cost of your auctioneer bond may be based on these details.
Can I Get an Auctioneer Bond with Bad Credit?
Auctioneer bonds are priced as a percentage of the total bond amount, so even if you have bad credit, you may still have the opportunity to purchase an auctioneer bond. The premium amount you pay for your auctioneer bond will typically vary between one and five percent based on your credit score.
While having bad credit can raise the premium price of your bond, it may still be possible to obtain your bond and move forward with your career as an auctioneer. Discussing your situation with our team can give you a better idea of your options.