Whether it’s auction myths or popular misconceptions about the industry, Dakil Auctioneers, Inc. has provided etiquette for first-timers, along with a how-to auction guide for those dipping their toes into the auction waters. But now that you’re interested in purchasing or selling items at an auction and you have the basics down, what do you need to know about the certain specifications and processes required to host, sell, and buy at auctions?
This is a guide to better understand how the four main types of auctions work: gun, auto, real estate, and heavy equipment.
We’ll break down more specifics below but, in general, you need an auctioneer license to hold auctions. In certain cases, you need additional licenses.
Auction license laws vary by state. Oklahoma, for example, is void of any specific laws. However, Oklahoma City has requirements for the auctioneer license process. The basics include an auction school diploma or two years of service experience under a professional auctioneer. You’ll also need a sales tax permit, plus a background check conducted by the Oklahoma State Bureau of Investigation. Once approved, you’ll produce a $1,000 bond.
A merchant auctioneer license runs $91 annually, which is what Dakil possesses. A general auctioneer license fee is $61 and a temporary auctioneer license sets you back $32. A general auctioneer must buy an $18 permit each time they go to a location. As a full-fledged auction house, Dakil’s fee is all-inclusive and doesn’t require a permit for each sale.
“You always want to use a licensed auctioneer and someone that is reputable,” said Bill Rackley, a longtime auctioneer, appraiser, and consultant with Dakil. “The auctioneer collects all your money. If they run off with your money, you have no recourse.”
Dakil additionally holds auction licenses in Texas and Arkansas. Rackley said Texas and Arkansas reciprocate with many other states, so the three combined licenses means Dakil can hold auctions in a majority of the U.S.
What an auctioneer needs: Auctioneers aren’t required to have a Federal Firearms License to sell firearms, but Dakil went ahead and received its license, anyway. Firearm sales at auctions come via two types: estate and consignment. With estate sales, an auctioneer is an agent of the executor and wouldn’t need a license. A consignment auction can involve an auctioneer taking possession of firearms. You can’t hold a consignment auction for firearms without an FFL.
Federal gun laws make it illegal for a licensed dealer to sell a firearm, other than a rifle or shotgun, to anyone under the age of 21, according to the Bureau of Alcohol, Tobacco, Firearms and Explosives. That means someone with an FFL can’t sell a handgun to a buyer who is under 21.
Dakil is deliberate in following state laws for all parties involved. It lists every serial number of the firearms in order for safety and responsibility.
What the buyer/seller needs: As mentioned above, federal laws have age requirements of 18 to buy rifles or shotguns or at least 21 to buy handguns from a licensed dealer. Dakil requires buyers to provide an address that matches a driver’s license. A background check runs through a national database, ensuring there aren’t felonies on your record.
“Sometimes they clear you in an hour. Sometimes it can take days,” Rackley said.
Buyers should also check with any applicable state laws, such as registering a firearm or a permit to carry, before making purchases, especially online transactions. Buying a handgun from out of state would require a transfer to a dealer with an FFL in your state. For example, a Texas resident couldn’t purchase a handgun in Oklahoma and travel back across state lines with it. In November, Oklahoma laws will eliminate permit or training requirements for handgun owners. Background checks will still apply.
For sellers, an estate auction requires the chain of possession with a firearm in order to sell without an FFL. With a consignment auction, specific certifications aren’t required since a third party, in this case the auctioneer, sells the goods for you in exchange for a percentage of the profits. The seller needs to maintain possession of the firearms until the day of the auction.
“Gun sales have the most to comply with for the buyer,” Rackley said. “They’re really not that hard as long as you’re honest. There’s quite a bit of paperwork with it.”
What an auctioneer needs: You need an auto dealers license to sell automobiles at most auctions. States have different requirements, so check your local DMV. Generally, you’ll have to apply for a license, pass a background check, and a purchase a bond, along with other details such as zoning requirements and proof of a business location with a sign. However, you don’t need a license when selling as part of an estate sale. The catch is you can only sell five vehicles a year that way, so it pays to have an auto license. At Dakil, we have an auto license to ensure quality and security with our buyers and sellers.
What the buyer/seller needs: For sellers, you must remove any liens prior to auction. Buying at an auction is no different than any other automobile purchase — minus the hassle of a car salesman — thus you don’t need additional requirements.
What an auctioneer needs: A real estate license. Buying a house or property from an auction isn’t any different from using your local real estate agent as long as the auctioneer is certified. With a real estate license, auctioneers can sell property without the hassle and drawn out process of a house on the open market. Obtaining a real estate license is more in depth than an auto license, as you’ll need to pass a licensing exam and find a real estate broker to sell under. You can either operate as a sales associate or take an additional exam to become a licensed real estate broker.
“You have to have a real estate license, period, in Oklahoma, whether it be independently or at an auction,” Rackley said.
What the buyer/seller needs: If you have property or land you want auctioned off, you need your abstract, a collection of legal documents that details transactions associated with that property. A seller would then deliver the abstract to an auctioneer to make sure everything checks out. Buyers don’t need anything specific, but if you place the winning bid, you must provide 5% of the contract price as a down payment when signing the contract. We recommend obtaining a pre-approved loan for the real estate before attending the auction to ensure a smoother sale.
What an auctioneer needs: The fewest limitations of the four, all you need is an auction license to sell heavy equipment. There are no other specifications by either the state or the county/city. Rackley mentioned how he’s seen people get in trouble trying to sell stolen equipment. To combat that, Dakil records serial numbers and checks Uniform Commercial Code filings to make sure there isn’t a lien against it.
What the buyer/seller needs: No specific paperwork is necessary. Now that you’re up to speed on auction certifications, check out our listings for an auction near you. If you are considering selling some items yourself and want to learn more about what Dakil has to offer, contact us today or call directly at (405) 751-6179.
