CFA Live & Online Auction Procedures 3 — Questions and Answers
Question 1: Under federal law, which class of firearms CANNOT be transferred to a private buyer through an online auction without additional NFA paperwork?
- Machine guns manufactured after May 19, 1986 (Correct answer)
- Semi-automatic rifles with detachable magazines
- Bolt-action rifles with scopes
- Single-action revolvers chambered in .22 LR
Correct answer: Machine guns manufactured after May 19, 1986
The Hughes Amendment of 1986 prohibits civilian transfer of machine guns manufactured after May 19, 1986, regardless of auction format.
Question 2: What does the term 'hammer price' refer to in auction terminology?
- The final winning bid amount at the moment the auctioneer's gavel falls (Correct answer)
- The opening bid set by the consignor
- The combined total including buyer's premium and taxes
- The reserve price minus the seller's commission
Correct answer: The final winning bid amount at the moment the auctioneer's gavel falls
The hammer price is the amount of the winning bid at the moment the auctioneer signals the sale, before any additional fees are added.
Question 3: An online auction platform sells a handgun to a winning bidder in a different state. To whom must the gun be shipped?
- A federally licensed firearms dealer (FFL) in the buyer's state (Correct answer)
- Directly to the buyer's home address
- The buyer's local police department for pickup
- Any licensed gun range in the buyer's county
Correct answer: A federally licensed firearms dealer (FFL) in the buyer's state
Federal law requires interstate handgun transfers to go through an FFL dealer in the buyer's state, who conducts the background check.
Question 4: What is a 'soft close' feature in online firearm auctions?
- Automatic extension of the auction end time when a bid is placed in the final minutes (Correct answer)
- A reduced buyer's premium for last-minute bidders
- An option for the seller to withdraw the lot without penalty at closing
- A gradual price reduction if no bids are received near end time
Correct answer: Automatic extension of the auction end time when a bid is placed in the final minutes
Soft close extends the auction deadline by a set period each time a last-minute bid arrives, preventing bid sniping and ensuring fair competition.
Question 5: Which scenario would most likely cause an auction house to withdraw a firearm lot before the sale?
- Discovery that the serial number appears on a stolen firearms database (Correct answer)
- The consignor wants a higher estimate after cataloging
- A competing auction has a similar model listed the same week
- The firearm fails a cosmetic grading threshold
Correct answer: Discovery that the serial number appears on a stolen firearms database
A firearm confirmed as stolen must be withdrawn and the matter reported to law enforcement; proceeding with the sale could constitute criminal liability.
Question 6: In a CFA context, what does the term 'lot estimate' represent?
- The appraiser's pre-auction projected selling range based on market data (Correct answer)
- The minimum price the seller will accept
- The total fees the buyer will pay including premium
- The insurance replacement value set by the auction house
Correct answer: The appraiser's pre-auction projected selling range based on market data
A lot estimate is the appraiser's or specialist's opinion of the range within which the lot is likely to sell, based on comparable sales and condition.
Question 7: What is the primary purpose of requiring bidder registration before a firearm auction?
- To verify eligibility and establish accountability for the buyer's identity (Correct answer)
- To pre-collect the buyer's premium payment
- To allow the auctioneer to predetermine lot order
- To ensure the bidder has attended a firearm safety course
Correct answer: To verify eligibility and establish accountability for the buyer's identity
Bidder registration collects identity and contact information to ensure accountability and support background check compliance for firearm transfers.
CFA Live & Online Auction Procedures 3
Under federal law, which class of firearms CANNOT be transferred to a private buyer through an online auction without additional NFA paperwork?