Did you see the Realtor magazine for June in the Law section their is an article about Auctions.  The title is "Adversary to Ally".  The writer Tony Isbell says that even before the real estate market started to slow down, real estate auctions were gaining popularity.

According to the National Auctioneers Association's sales were at 14.2 billion in 2006 and are expected to be much higher this year.  The author of the article takes a look at auctions and the legal ramifications for an agent when a client becomes involved in an auction.

Basically the author breaks the the legal ramifications down into 4 sections. Licensure, Compensation, Fiduciary responsibilities, and Inspections and due diligence.  

Licensure - in some states Auctioneer's must have an Auctioneer's license and in some states they must also be licensed Realtors.

Compensation- An Auctioneer has to pay you the advertised fee granted you follow the terms stated to receive that fee. 

Fiduciary Responsibilities - are the same as a Realtor with a listing to the Seller.  The Auction has the same responsibilities to disclose even if the property is sold as is.

Inspections and Due Diligence- the buyer is required to inspect the property prior to the auction and Auctioneer will provide a thorough Property Information Package prior to the Auction taking place.

In reading this article I did not see a lot of legal ramifications to an Agent.  The article basically just explains the process to the un-savy Realtor who wants to participate in the Auction Process.

What I would have like to have seen addressed is what a Realtor should do if you bring a Buyer to an Auction and you supply comps to the client to assist them with a good bidding range but the client gets to the Auction and bids over the range you suggest.  What is the legal ramifications to a Realtor if your client sues you  charging you with responsibility for their excessive bidding? 

I would suggest just like the CMA's that you do for a listing you have the Buyer sign something saying this is just an analysis not an appraisal.  Make sure they also sign something saying you are there to assist but ultimately they are responsible for their actions.

All in all this is a good article to show Realtors why they should use Auctioning as another marketing tool to get their inventory SOLD!.