What is an auctioneer bond?
An auctioneer bond is a license and permit bond that auction professionals in certain states must acquire as part of the state licensing process. The bond guarantees that the auctioneer or auction house operator performs their job according to state regulations.
Auction bonds help protect the public from misrepresentation, fraud, payment mismanagement, deceptive advertising, and other unethical business practices. If an auctioneer operates their business illegally or unethically, someone can file a claim against the bond to recover financial losses.
Who needs an auctioneer bond?
If you want to obtain your license to operate as an auctioneer in your state, you may need this bond. Check your state and county licensing requirements to determine if a bond is required. Approximately half of the United States requires an auctioneer bond.
Get Your Auctioneer Bond:
- An auctioneer bond is a surety bond that auction professionals in certain states must acquire as part of the state licensing process.
- Approximately half of the United States requires auctioneer bonds.
- The bond amount required can range anywhere from $2,000 to $50,000, depending on your state.
How does an auctioneer bond work?
Auctioneer bonds are legally binding agreements involving three parties:
- Obligee: The state requiring the bond
- Principal: The auctioneer or auction house that purchases the bond
- Surety: The company that underwrites and issues the bond
If the principal fails to comply with the rules or regulations of their industry, an individual or business (e.g., a customer) may file a claim against the bond. The surety will then step in and investigate the claim to determine its validity. If the principal is guilty, the surety may compensate the claimant for their losses. The principal will then be responsible for paying the surety back.
How to Become an Auctioneer in 5 Basic Steps
To become an auctioneer, follow the specific licensing process in your state or county. Common action steps include the following:
- Having a high school diploma (minimum)
- Attending auction school to learn industry best practices
- Obtaining a surety bond (if required)
- Getting licensed in your state (if needed)
- Joining professional associations to advance your career
The cost of your bond will be a percentage of the total bond amount (penal sum). For auctioneer bonds, the rate often falls around 1-5%. The cost may vary based on your personal and business financials and credit history. If you have bad credit, you may pay more, possibly closer to 5-10% of the penal sum.
The bond amount required will depend on your state regulations. It can range anywhere from $2,000 to $50,000.
How to Get an Auctioneer Bond in Your State
To meet your state licensing requirements for becoming an auctioneer and obtain a surety bond, you can fill out our simple online application. Just find your bond, select your state, and fill in your information. Once you’re approved (often instantly), you can pay for and print your bond.
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.