Both the Real Estate Licensing Board and the Auctioneer Licensing Board are constantly being asked "What licenses are required in order to be able to sell real estate at auction, and what laws and rules must be followed when conducting these auctions?" The following discussion addresses and attempts to answer these questions.

Simply stated, anyone who auctions or offers to auction real estate belonging to others must be licensed both as a real estate broker (G.S. 93A) and as an auctioneer (G.S. 85B).'

There is only one way in which an individual can by himself (herself) sell real estate at auction: He must obtain both a real estate broker license and an auctioneer license which requires (among other things) passing both licensing examinations. However, to avoid the examination requirement, real estate brokers and auctioneers can, under certain conditions, cooperate or team up with each other for the purpose of conducting auctions involving real estate. There are two ways in which this can be done:

One way is for the real estate broker to contract with the property owner to conduct the entire auction (i.e., to auction both the real estate and the personal property). To do so however, the broker must first obtain an auction firm license (no examination required) and then employ a licensed auctioneer to cry the sale. Under this cooperative arrangement, the "broker/auction firm" would advertise the auction, describe at the auction the property to be sold, maintain and account for all monies received at the auction, deliver the various documents to the parties, and perform other functions normally associated with conducting auctions and brokering real estate; he cannot, however, cry any bids. The auctioneer would cry the bids for both the real and the personal property and could also assist the "broker/auction firm" by performing any of the above acts or similar acts with respect to any personal property to be sold.

Real estate brokers and auctioneers can also cooperate by jointly conducting auctions involving the sale of real estate and personal property; once again, however, the broker must first obtain an auction firm license and employ an auctioneer to cry bids for him. Under this arrangement, the property owner would employ the auctioneer to auction his personal property and the "broker/ auction firm" to auction his real estate. Each person would confine his activities to that property for which he has been employed to sell (remember, the auctioneer must cry all bids), and all joint advertising for the auction must clearly indicate that the real estate will be handled by the broker and the personal property handled by the auctioneer.

Real Estate brokers and auctioneers are cautioned, however, not to enter into other forms of cooperative arrangements involving the sale of real estate at auction--especially arrangements where an auctioneer pays a broker for the use of his (or her) name, and then proceeds to auction real estate under the license of the broker, arrangements such as this are improper both from the standpoint of the auctioneer and the broker and can result in criminal prosecution and/or disciplinary action by the respective licensing authorities.

Assuming that the person auctioning the real estate has obtained both of the required licenses (real estate broker license and auctioneer or auction firm license), he may now wonder "Which laws and rules must I follow when selling real estate at auction-the Real Estate License Law and the Rules and Regulations of the Licensing Board, or the Auctioneers Law and the Rules and Regulations of the Auctioneer Licensing Board?" The answer is that the laws and rules of both the Real Estate Licensing Board and the Auctioneer Licensing Board must be followed when selling real estate at auction.

Although they are quite similar, the laws and rules governing the activities of real estate brokers will, in certain instances, be stricter than those governing auctioneers (and vice versa). In those instances, you will be held to the stricter of the two standards. Listed below are several examples of where the stricter standards apply.

When selling real estate at auction, YOU MUST:

1) Deliver to the property owner (within five days of execution and prior to conducting the auction) a copy of the required written agreement containing the terms and conditions of employment.

2) Include your business name, street address, telephone number and auctioneer's (or auction firm) license number in all written. advertisements for the auction. If you have been employed to sell both the real and personal property, you may also include in the advertising the name and license number of the auctioneer whom you have hired to cry the sale-but not his telephone number or address. However, if the seller has contracted separately with the auctioneer to sell his personal property, then the name, address, telephone number and license number of the auctioneer must appear in the advertising. (Remember, the ad must clearly indicate that the real estate will be handled by the broker and the personal property by the auctioneer.)

3) Have your auctioneer or auction firm license available at the auction.

4) Deliver to the buyer and the seller (within five days from execution) copies of any sales agreements, offers, or contracts affecting real property.

5) Deposit in a trust account or escrow account (within 72 hours of receipt) all monies which you have received from others in connection with the sale of real estate at auction; the account must be designated a "Trust Account" or "Escrow Account" by the bank or savings and loan association in which the account is located, and all deposit tickets and checks drawn on the account must bear the words "Trust Account" or "Escrow Account".

6) Refrain from depositing the funds of others in an interest bearing account UNLESS you have received written authorization to do so from the persons for whom you are holding the funds AND UNLESS the written authorization specifies how and to whom you are to disburse the interest.

7) Maintain complete records of all real estate trust account receipts and disbursements; these records may be inspected by the Real Estate Licensing Board or its representatives without prior notice.

8) Deliver to the buyer and seller (at or within five days after closing) a statement showing all receipts and disbursements which you have handled in connection with the auction sale.

9) Pay over within a reasonable time (not to exceed 30 days) money which you have received from others through the auction sale- however, in the event of a dispute over the return or forfeiture of any deposit which you are holding in regard to the real estate, you must retain the deposit in your trust or escrow account until you have either obtained a written release from the parties consenting to its disposition or until disbursement is ordered by a court.

10) Retain for three years records of all transactions conducted by you in the capacity of "broker/ auctioneer" or "broker/auction firm".

Any person who auctions or offers to auction real estate for others must hold both a real estate broker license and an auctioneer or auction firm license. A real estate broker can qualify to conduct auctions involving real estate by either (1) obtaining an auctioneer license (examination required) or by (2) obtaining an auction firm license (no examination required) and employing a licensed auctioneer to cry the sale. An auctioneer cannot conduct an auction involving real estate until he has obtained a real estate broker license (examination required).

Persons selling real estate at auction must comply with the laws and rules of both the Real Estate Licensing Board and the Auctioneer Licensing Board. Copies of these laws and regulations are available from these agencies, and inquiries concerning licensing requirements should be directed to them.

Contact: The North Carolina Auctioneer Licensing Board, Suite 306 Haworth Building, 3509 Haworth Drive, Raleigh, North Carolina 27609 (Phone 919/733-2182).

¹ Certain exemptions from licensing are provided for in the Real Estate License Law and the Auctioneer Law; inquiries concerning these exemptions should be addressed to the North Carolina Real Estate Licensing Board and to the North Carolina Auctioneer Licensing Board.