Once again, I write to you on behalf of my clients and the citizens of Virginia, in STRENUOUS opposition to the elimination of auctioneer licensing. During the last legislative session, Senate Bill 1480 was introduced which would've abolished all licensure for auctioneers, in addition to abolishing the right for a licensed auctioneer to sell real estate at public auction without having to have a real estate salesperson's license. This bill was soundly defeated in committee as many of those affected by the bill appeared before the committee to voice common sense opposition to the bill. Unfortunately there appears to be a renewed effort to implement these directives and we as taxpayers are once again required to invest precious time explaining the many shortcomings and obvious pitfalls to this irresponsible proposed initiative.
As a licensed professional and FIFTH GENERATION auctioneer, current Director of the Virginia and West Virginia Auctioneers Associations and member of the National Auctioneers Association, I feel I am appropriately qualified to testify regarding the many repercussions that are certain to follow should auctioneer licensure be eliminated and should auctioneers lose the ability to sell real estate at auction without a salesperson's license..
It was my sincere hope that sensibility would prevail and that the overwhelming defeat of Senate Bill 1480 would be the ultimate demise of efforts to eliminate auctioneer licensure, but unfortunately, despite our best efforts, it was not. Therefore, allow me to elaborate, once again, on why the passage of any legislation eliminating auctioneer licensure would be so grossly irresponsible.
First, please know that I realize that the elimination of licensure for auctioneers is an attempt to reduce costs in the wake of Governor Younkin's initiative. I understand the precarious position in which the DPOR and members of the state legislature find themselves, and do not envy their positions. That being said, I stand firm that elimination of licensure of auctioneers will act to put the consumer at great risk.
I am certain that you are aware that, unlike many of the other professions regulated by DPOR, auctioneers maintain an escrow account. We act as a fiduciary for our clients and maintain care and custody of MILLIONS of dollars of tangible assets annually and that the sale of these assets results in auctioneers also maintaining care and custody of MILLIONS of dollars in liquid funds annually through their escrow accounts. In comparison, I would offer that the amount of liquid funds handled annually by real estate brokerages does not even remotely approach this level due to the fact that many earnest money deposits submitted as consideration in a real estate brokerage transaction are held by a closing attorney or other closing agent. It seems grossly irresponsible that the legislature and DPOR would relinquish governance and regulation over any profession required to handle their clients' liquid funds and maintain an escrow account in which to place these funds. I struggle with the fact that intelligent people serving in our state agencies and representing the citizens of Virginia do not grasp this very simple concept.
In addition, professional licensure, at its core, acts to identify a qualified agent/professional no matter the profession. How else could we be completely assured that the attorney, the physician, the general contractor, etc. had initially and continuously met the minimum requirements and standards necessary to perform his/her duties. What would be the standard of reference without some level of regulation and licensure? This same sensible logic would also apply to the issuance of a driver's license, either standard or commercial.
The protection that DPOR regulation provides is “necessary for the protection or preservation of the health, safety, and welfare of the public” (§ 54.1-100). The elimination of licensure for auctioneers would also, without any doubt, permit those with a revoked license to resume their nefarious business practices with no safeguard for the consumer. In the absence of proactive measures, such as licensure, to protect the consumer from these bad actors, the consumer would merely be left at the mercy of the court system to pick up the pieces and attempt to rectify any criminal activity, when the activity could have likely been prevented had the requirement for licensure not been eliminated. Elimination of licensure would also allow anyone to portray themselves as an "auctioneer" thus blurring the lines between those of us that serve professionally and a community of charlatans simply trying to make a quick buck, who do not possess the qualifications necessary to serve the public in that capacity. The consumer would have no means to officially validate the qualifications of any person portraying themselves as an "auctioneer" and would in turn suffer damages as a result. This is not a hypothetical, it is no doubt a relative certainty.
According to DPOR representatives to whom we have spoken, the data supports the fact that the Auctioneers Board receives a minimal number of complaints when compared to other regulated professions. Therefore, the system is working as designed. I simply do not understand the current campaign to change it. Professional auctioneers are not a burden to the DPOR budget in that they do not have to allocate substantial resources to deal with complaints from our ranks. This is hard, factual data, not guesswork.
In contrast, members of the general public portraying themselves as "estate sale" or "tag sale" agents are completely unlicensed and unregulated and the newspapers and news websites are FILLED with stories of their criminal exploits. These everyday citizens portray themselves as "qualified experts" to assist with the liquidation of personal property. They have no oversight...no licensure...no transparency...no escrow requirements....no continuing education requirements...no professional trade organizations....yet they are permitted to perform many of the same duties as that of a professionally licensed auctioneer, much to the detriment of their unwitting clients. This is a shining example of the importance of licensure for agents engaged as a fiduciary. I would gladly supply links to media content to support my statements. Alternate to the repeal of licensure for auctioneers, it seems to make sense that some form of regulation be written to govern and legislate these "estate sale" and "tag sale" companies to ensure that the consumer is protected from unqualified individuals who are not bound to act in their clients' best interests.
Alternatively, we propose that there are two ways to balance a budget...cut costs...or increase revenue. We propose that the Senate take an alternative path and consider an INCREASE in the licensure fees for professional auctioneers. The majority of FULL-TIME, PROFESSIONAL auctioneers that I have polled support a 300% - 400%, or greater, increase in the licensure fee, in lieu of the irresponsible elimination of licensure. Perhaps it's time to pivot to this more sensible resolution to this matter.
Before I address my next concern, let me start by informing the reader that I am also a licensed realtor, with one of the top selling brokerages in SWVA, and that I sell many properties through brokerage listing annually.
However......
The other matter at hand is the elimination of the legislation that permits licensed auctioneers to sell real property at auction without having a real estate salesperson's license. The proposed legislation goes even further in its requirement by proposing that an auctioneer possess a real estate BROKER'S license in order to sell real property at auction.
Given the fact that licensed auctioneers have been permitted to sell real property at auction in the state of Virginia for DECADES, we are all greatly puzzled by this proposed legislation. This proposed change does nothing in the way of helping to reduce costs. It appears to merely be an attempt by the realtor lobby to stifle competition and reduce the options the consumer has to sell his/her real property. The auction method of marketing and sale of real property is a powerful and effective strategy for clients to realize fair market value for their property, as buyers engage in active competition to own it. If it weren't, realtors wouldn't engage in strategies borrowed from the auction profession such as "escalation clauses" which permit a buyer's agent to increase the buyer's offer should a higher offer be received and "accelerated listings" in which agents receive multiple offers over a span of several days and then help their buyer select the best offer based not only on price, but on the contingencies contained in those offers as well. We find these methods of imitation flattering and as proof that the auction method of sale carries substantial merit. Any attempt to stifle its existence is also nonsensical and irresponsible.
Once again, we are unaware of any complaints of any substance regarding an auctioneers selling real property at auction. Therefore, we do not feel that this sales strategy acts to increase the need for additional resources within the DPOR. Professional auctioneers serve their clients ethically and professionally regarding the sale of their real property and offer a viable alternative to a brokerage listing. The evidence is crystal clear on this point .... nationwide. We have a decades long case study here in the state of Virginia that supports that fact. There is absolutely no evidence to support the additional burden of a salesperson's or broker's license upon an auctioneer in order to sell real property at auction. Period. The genesis of this legislation is puzzling indeed, and the requirement is extremely unnecessary and stifling to open market competition.
I trust that these very salient opposing positions are simple and easy to understand. I also trust that the readers have the best interests of the consumers of Virginia at heart, and will no doubt see to it that this irresponsible promulgation of law does not reach the legislature for any form of consideration.
I am available at any time for further discussion regarding this matter. You may reach me at 540-250-2964 or at jarrod@farmer-auctions.com.
In the name of consumer protection, I look forward to common sense prevailing in this matter.
