North Dakota Real Estate Practice Exam

What is a defining characteristic of a bona fide public auction for real estate?

1. It must be conducted privately

2. It is limited to the property owner's friends

3. Sales must be widely advertised

4. It must involve a licensed auctioneer

The correct answer is: Sales must be widely advertised

A bona fide public auction for real estate is defined by the characteristic that sales must be widely advertised. This ensures transparency and fairness, allowing a broad range of potential buyers to be informed about the auction and the property being sold. Widely advertising the auction provides an opportunity for competitive bidding, which is integral to the essence of public auctions. The primary goal is to attract a diverse audience, enhancing the chances of obtaining the best possible price for the property. In contrast, auctions that are conducted privately or limited to a select group, such as the property owner’s friends, do not fulfill the criteria of being public. While the involvement of a licensed auctioneer may be beneficial and can lend professionalism to the process, it is not a mandatory requirement for an auction to be considered bona fide in the context described.