Common State and Federal Regulations for Home Auctions

Home auctions provide some of the best deals for consumers. The thrill of being a part of bidding process can create an experience like no other. From the auctioneer calling out bids to winning the bid to walking away with the keys, the process is amazing. Home auctions are utilized to help unload foreclosed or distressed properties to the bidding public. Regulations that govern these auctions vary, depending on each state laws. However, there are common regulations, both federal and state, that are adopted across the board for home auctions.

Federal Regulations

The mortgage industry has undergone a complete overhaul. The overhaul includes regulations dealing with lending and foreclosures. While there are not specific federal regulations for home auctions, there are federal real estate laws that are applicable to transactions that occur at home auctions. The Federal Fair Housing Act is one important law that must be followed. For example, the Federal Housing Act states that it is unlawful to discriminate in a real estate transaction based on color, sex, religion, race or national origin. These are regulations that are applicable for all housing, not just home auctions.

State Regulations

As stated previously, state regulations vary from state to state. However, there is a regulation that works to keep the states moderately uniform, it is called the Uniform Commercial Code. The Uniform Commercial Code is not a law and is not legally binding unless the state adopts it into law. The Uniform Commercial Code is a number of acts designed to keep commercial transactions simplified especially when the transactions occur between two states. The articles within the code cover sales, leasing, bulk sales, documents of title, secured transactions and the transfer of funds.

In addition to the Uniform Commercial Code, there are real estate laws that must be adhere to when conducting a home auction. Common real estate laws that are applicable to home auctions are licensing, insurance and contracts. These laws ensure that both parties are able to purchase and understand the terms of the contract for the property being purchased.


Since there are not any set federal or state laws regulating home auctions, the National Association of Auctioneers (NAA) has introduced to the states a sample uniform law. It is called the Uniform Auction and Auctioneer Licensing Act (UAALA). This act will help create a uniformed legislation regarding how states handle licensing, bonding, education, fees and other aspects of the auction. The sample law has been distributed to state officials for review.

The law will benefit both the states and the auctioneers by reducing any issues that may occur at the auctions and allow auctioneers to auction in other states. The attempted reform by the NAA has not been introduced into legislation but may be adopted and utilized as means to bolster existing state legislations regarding home auctions.

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