I85PREP
⌘ K
IL Auctioneer study materials
IL Auctioneer study resources

IL Auctioneer practice questions

One question at a time. Build your IL Auctioneer understanding.

First 50 of 199 questions. Each one lists the choices, the correct answer, and an explanation. The checker at the top of this page saves progress in this browser when it is available.

Continue in the practice tool above to load more questions, 50 at a time.

Question 1Illinois Auction License Act and Administrative Rules

Which entity administers and enforces the Illinois Auction License Act?

  1. The Secretary of State's business services department
  2. The Attorney General's consumer fraud division
  3. The Illinois Department of Agriculture's marketing bureau
  4. The Division of Professional Regulation within IDFPR Correct answer.

Explanation

The Auction License Act is administered by the Illinois Department of Financial and Professional Regulation through its Division of Professional Regulation, which handles applications, examinations, renewals, and discipline. Other agencies may touch on auctions incidentally but do not license auctioneers.

Question 2Illinois Auction License Act and Administrative Rules

What is the minimum age for an applicant seeking an Illinois auctioneer license?

  1. Twenty-three years of age
  2. Eighteen years of age Correct answer.
  3. Twenty-one years of age
  4. Sixteen years of age

Explanation

An applicant must be at least 18 years old to be licensed as an auctioneer in Illinois. Meeting the age minimum is only one requirement and does not by itself qualify a person for licensure.

Question 3Illinois Auction License Act and Administrative Rules

Which educational credential must an applicant for an Illinois auctioneer license hold?

  1. A bachelor's degree from an accredited college
  2. An associate degree in business
  3. A high school diploma or its equivalent Correct answer.
  4. A certificate from a trade school

Explanation

The Act requires a high school diploma or a recognized equivalent such as a GED; a college degree is not mandated. Additional pre-license instruction and examination requirements apply separately.

Question 4Illinois Auction License Act and Administrative Rules

Which step is required of every Illinois auctioneer license applicant?

  1. Passing the Department-approved examination Correct answer.
  2. Posting a surety bond with the county clerk
  3. Joining a statewide auctioneers association
  4. Obtaining a sponsor who has held a license for five years

Explanation

Applicants must pass the examination approved by the Department as part of the licensure process. Membership in a trade association and personal sponsors are not conditions of licensure.

Question 5Illinois Auction License Act and Administrative Rules

How long is a standard Illinois auctioneer license valid before renewal is required?

  1. One year
  2. Two years Correct answer.
  3. Three years
  4. Four years

Explanation

Auctioneer licenses run on a two-year cycle and must be renewed with the Department. Renewal is not automatic and depends on satisfying the Act's renewal conditions.

Question 6Illinois Auction License Act and Administrative Rules

Which activity requires the person performing it to hold an Illinois auctioneer license?

  1. Calling bids for a commission at a consignment sale Correct answer.
  2. Selling your own furniture at your own garage sale
  3. Appraising a painting for an insurance company
  4. Donating goods to a charity that resells them in a shop

Explanation

A person who conducts an auction for compensation is acting as an auctioneer and must be licensed. Selling one's own property without compensation and appraising property are not auctioneering activities.

Question 7Illinois Auction License Act and Administrative Rules

Which person may lawfully conduct an auction in Illinois without holding an auctioneer license?

  1. A person calling bids at a charity event for a fee
  2. A person personally selling their own household goods Correct answer.
  3. A person running monthly consignment sales online
  4. A person selling goods consigned by several neighbors

Explanation

The Act exempts individuals who personally auction their own property without acting for compensation. Once a person handles goods consigned by others or takes a fee, licensure is required.

Question 8Illinois Auction License Act and Administrative Rules

An Illinois auctioneer license is issued to an individual. Which statement about its use is accurate?

  1. The license authorizes only the named holder to act Correct answer.
  2. The license may be transferred to a spouse upon death
  3. The license may be lent to an unlicensed employee
  4. The license may be shared with a business partner

Explanation

Licensure is personal and non-transferable, so only the named licensee may auction under it. Lending or transferring a license exposes both parties to discipline.

Question 9Illinois Auction License Act and Administrative Rules

An auctioneer collects a ten percent buyer deposit on an item that will be picked up the following week. What must the auctioneer do with the money?

  1. Deposit it into the firm's general operating account
  2. Give it to the seller immediately as partial payment
  3. Keep it as the auctioneer's commission in advance
  4. Hold it in a separate escrow or trust account Correct answer.

Explanation

Funds received on behalf of buyers or sellers are held in trust and must be kept in a separate escrow or trust account rather than commingled with business funds. Commingling is a common ground for discipline.

Question 10Illinois Auction License Act and Administrative Rules

Before conducting an auction for a seller, an auctioneer should have which of the following in place?

  1. An oral agreement witnessed by two bidders
  2. A written contract stating terms and fees Correct answer.
  3. A notarized inventory of every item to be sold
  4. A court order authorizing the sale

Explanation

The Act contemplates a written agreement between the auctioneer and the seller that sets out the terms of the engagement, including compensation. Oral arrangements leave the parties without the required documentation.

Question 11Illinois Auction License Act and Administrative Rules

A seller's property is advertised for sale as an absolute auction. What does that representation require?

  1. The item is sold to the highest bidder, no reserve Correct answer.
  2. The seller may reject a high bid that seems too low
  3. The auctioneer must open at a published figure
  4. The seller may place a bid to protect a minimum

Explanation

Absolute means the property will be sold to the highest bidder with no reserve or seller confirmation, whatever the price. Advertising a sale as absolute and then refusing the high bid is deceptive.

Question 12Illinois Auction License Act and Administrative Rules

In a reserve auction, which statement is accurate?

  1. The auctioneer may not announce a minimum bid
  2. Reserves are unlawful unless written into the contract
  3. The seller must accept any bid above one dollar
  4. The seller may refuse bids below a set minimum Correct answer.

Explanation

In a reserve sale the seller sets a minimum price and is not obligated to sell below it, so the high bid may be refused. Once a sale is advertised as absolute, however, no reserve may be imposed.

Question 13Illinois Auction License Act and Administrative Rules

An auctioneer accepts bids from the seller's friend solely to drive the price higher without disclosing the arrangement. This conduct is best described as:

  1. Prohibited as a deceptive bidding practice Correct answer.
  2. Allowed if the friend registers as a bidder
  3. Permitted for items offered with a reserve price
  4. Allowed when the seller requests it in writing

Explanation

Bids placed to inflate the price without disclosure are deceptive and expose the auctioneer to discipline. Registration or a seller's request does not make undisclosed price-driving lawful.

Question 14Illinois Auction License Act and Administrative Rules

What must an auctioneer do with the records of each auction conducted?

  1. Destroy them once the buyer pays in full
  2. Hold them only until the seller signs a receipt
  3. Send the originals to the county recorder
  4. Keep them available for Department inspection Correct answer.

Explanation

Licensees must maintain auction records and make them available when the Department examines the business. Records support escrow accounting and are relevant in disciplinary investigations.

Question 15Illinois Auction License Act and Administrative Rules

A licensed auctioneer relocates their auction business to a new town. What must the licensee do under the Act?

  1. Wait until the license renews to report the move
  2. Post a public notice at the old business location
  3. Apply for a brand-new license in the new county
  4. Notify the Department of the new address Correct answer.

Explanation

Licensees must keep the Department informed of their current business address so official notices and service can reach them. Failing to report a change can itself be a disciplinary matter.

Question 16Illinois Auction License Act and Administrative Rules

Which is required of an Illinois auctioneer at each license renewal?

  1. Reapplying as though never licensed before
  2. Retaking the licensing examination
  3. Completing approved continuing education Correct answer.
  4. Submitting three letters of recommendation

Explanation

Renewal depends on completing the continuing education approved by the Department for the license period. The licensing examination is generally taken only for initial licensure.

Question 17Illinois Auction License Act and Administrative Rules

Which conduct is a ground for discipline under the Illinois Auction License Act?

  1. Selling goods for a charity without charging a fee
  2. Charging a commission stated in the written contract
  3. Mixing client funds with the auctioneer's own funds Correct answer.
  4. Declining an auction because of the seller's terms

Explanation

Commingling money held for clients with personal or operating funds violates the trust-account requirements and is disciplinable. Charging an agreed commission or declining an engagement for legitimate reasons is not misconduct.

Question 18Illinois Auction License Act and Administrative Rules

Before the Department revokes a license, the licensee is entitled to which of the following?

  1. Notice of the charges and a hearing Correct answer.
  2. A refund of all fees paid during the term
  3. A jury trial in the county where they reside
  4. A file review conducted only by the Attorney General

Explanation

Disciplinary action requires notice of the charges and an opportunity to be heard at an administrative hearing. The licensee may also seek review of the Department's final decision through the courts.

Question 19Illinois Auction License Act and Administrative Rules

An unlicensed assistant works at a licensed auctioneer's sale. Which task may the assistant lawfully perform?

  1. Registering bidders and recording bidder numbers Correct answer.
  2. Setting the reserve price with the seller
  3. Soliciting sellers and signing listing contracts
  4. Calling bids while the auctioneer takes a break

Explanation

Clerical and support tasks such as bidder registration do not require a license. Activities that constitute auctioneering, including calling bids or negotiating the sale terms, must be performed by the licensee.

Question 20Illinois Auction License Act and Administrative Rules

An auctioneer advertises a sale as absolute, but the contract with the seller contains a reserve. The advertisement is:

  1. A minor error that requires only a correction
  2. A deceptive practice subject to discipline Correct answer.
  3. Acceptable because the contract controls the sale
  4. Acceptable if the reserve is announced on opening day

Explanation

Advertising terms must accurately describe the sale, and calling a reserve sale absolute misleads bidders about their chance of buying. The written agreement does not cure a false public representation.

Question 21Illinois Auction License Act and Administrative Rules

An auctioneer wishes to purchase an item at their own auction. Under the Act, the auctioneer must:

  1. Resign the license before placing any bid
  2. Have a family member bid on their behalf
  3. Obtain the seller's verbal permission first
  4. Disclose the interest before bidding Correct answer.

Explanation

A licensee with an interest in property being sold must make the interest known so buyers are not misled. Undisclosed self-dealing, or bidding through a stand-in, is deceptive.

Question 22Illinois Auction License Act and Administrative Rules

An auction business organized as a limited liability company applies for licensure in Illinois. What does the Act require?

  1. Every member of the LLC must hold an auctioneer license
  2. No firm license is needed if one employee is licensed
  3. The LLC must be licensed only if it sells real estate
  4. Firm licensure plus a designated licensed auctioneer Correct answer.

Explanation

The business entity itself must be licensed as an auction firm, and it must have a licensed auctioneer responsible for its auction activities. Individual licensure of one employee does not authorize the entity to operate unlicensed.

Question 23Illinois Auction License Act and Administrative Rules

A nonresident who wants to conduct an auction in Illinois must:

  1. Obtain written consent from a local auctioneer
  2. Rely on their home state license without any filing
  3. Obtain an Illinois license before conducting the sale Correct answer.
  4. Limit the sale to items brought from their home state

Explanation

Illinois requires a person auctioneering in the state to hold an Illinois license, regardless of licensure elsewhere. Nonresident applicants may face additional submission requirements such as consent to service of process.

Question 24Illinois Auction License Act and Administrative Rules

What may the Department do about a person who conducts auctions for pay without a license?

  1. Seek injunctive relief and civil penalties Correct answer.
  2. Refer the matter to the county assessor
  3. Only send a warning letter for a first offense
  4. Nothing, because licensing is voluntary

Explanation

Unlicensed practice may be addressed through civil enforcement, including injunctions and civil penalties, in addition to any criminal exposure. Licensing is mandatory for compensated auctioneering.

Question 25Illinois Auction License Act and Administrative Rules

An auctioneer's commission on a sale is established by:

  1. A Department fee schedule
  2. The written seller agreement Correct answer.
  3. A charge collected only from buyers
  4. The gap between high bid and reserve

Explanation

Compensation is a matter of contract between the auctioneer and the seller and must be documented in writing. The Department does not set commission rates.

Question 26Illinois Auction License Act and Administrative Rules

Which agency administers and enforces the Illinois Auction License Act?

  1. The Illinois Attorney General, acting through the consumer fraud division
  2. The Illinois Secretary of State, through its business services division
  3. The Illinois Department of Agriculture, through its marketplace bureau
  4. Department of Financial and Professional Regulation Correct answer.

Explanation

The Auction License Act places licensing, examination, and disciplinary authority with the Illinois Department of Financial and Professional Regulation, acting through the Director. The Department issues and renews auctioneer and auction firm licenses and investigates complaints. Other agencies may assist in enforcement, but they do not administer the Act.

Question 27Illinois Auction License Act and Administrative Rules

What is the minimum age for an applicant for an Illinois auctioneer license?

  1. Twenty-one years of age
  2. Twenty-five years of age
  3. Eighteen years of age Correct answer.
  4. Sixteen years of age

Explanation

An applicant must be at least 18 years old, along with meeting the education, examination, and character qualifications in the Act. Age alone does not qualify a person; the other requirements must also be satisfied.

Question 28Illinois Auction License Act and Administrative Rules

Before an auctioneer license is issued, the applicant must do which of the following?

  1. Be sponsored in writing by a licensed auction firm
  2. Post a surety bond with the Department
  3. Complete two years of supervised bid calling
  4. Pass an examination approved by the Department Correct answer.

Explanation

The Act requires applicants to pass an examination covering auction law and practice, in addition to completing an approved course of study. Sponsorship, bonding, and supervised experience are not conditions of initial licensure in Illinois.

Question 29Illinois Auction License Act and Administrative Rules

At an Illinois auction, a buyer's premium is which of the following?

  1. A fee the seller pays the auctioneer at settlement
  2. A penalty charged when a buyer fails to complete the purchase
  3. A refundable deposit returned to the buyer at pickup
  4. An amount added to the hammer price and paid by the buyer Correct answer.

Explanation

A buyer's premium is a percentage added to the successful bid, so the buyer pays the hammer price plus the premium. It must be disclosed to bidders rather than introduced after the sale. It is distinct from any security deposit, which is applied to the purchase price.

Question 30Illinois Auction License Act and Administrative Rules

When an auctioneer contracts with a seller to conduct an auction, the auctioneer's legal relationship to the seller is which of the following?

  1. Escrow agent for the prospective buyers
  2. Agent of the seller Correct answer.
  3. Joint venturer sharing in the seller's profits
  4. Principal dealing at arm's length with another principal

Explanation

The auctioneer is the seller's agent and owes fiduciary duties of loyalty, disclosure, confidentiality, and accounting. Acting as agent means the auctioneer's authority comes from the seller and is limited by the contract and the law. This relationship underlies the rules on conflicts of interest and handling of funds.

Question 31Illinois Auction License Act and Administrative Rules

Under the Act, use of the title 'auctioneer' in business advertising is limited to which person?

  1. Any person who has completed an approved auction school course
  2. A person who has called bids at auctions for five years
  3. A person who holds a valid Illinois auctioneer license Correct answer.
  4. An unlicensed employee of a licensed auction firm

Explanation

Only a licensed auctioneer may use the title or hold out as an auctioneer. Using the title without a license, or implying licensure that does not exist, is a violation enforceable by the Department. School completion, employment by a firm, or experience does not authorize use of the title.

Question 32Illinois Auction License Act and Administrative Rules

A seller cancels an auction before bidding begins, but the auctioneer has already collected buyer deposits. What must the auctioneer do with the deposits?

  1. Apply them to the auctioneer's expenses for the cancelled sale
  2. Hold them in trust until the seller schedules a new sale
  3. Forward them to the seller as agreed compensation
  4. Return them to the buyers Correct answer.

Explanation

Deposits are held in trust for a sale that will occur; if the sale does not take place, the funds must go back to the people who paid them. Using them for the licensee's expenses or sending them to the seller would be a conversion of trust funds.

Question 33Illinois Auction License Act and Administrative Rules

Which educational requirement applies to an applicant for an Illinois auctioneer license?

  1. A one-year apprenticeship under a licensed auctioneer
  2. A real estate broker pre-license course
  3. An approved course of study in auctioneering Correct answer.
  4. A bachelor's degree in business or a related field

Explanation

Applicants must complete a course of study in auctioneering at a school whose curriculum is approved by the Department. A college degree, apprenticeship, or real estate course does not satisfy this requirement.

Question 34Illinois Auction License Act and Administrative Rules

Where must an auctioneer keep buyer deposits collected at a sale prior to settlement?

  1. In a separate trust or escrow account Correct answer.
  2. In the auctioneer's general operating account
  3. In the seller's personal bank account
  4. In a locked box at the auction site

Explanation

Funds received on behalf of buyers or sellers must be maintained in a separate trust or escrow account and kept apart from the licensee's own operating money. Commingling trust funds with business funds is prohibited because it exposes client money to the licensee's creditors.

Question 35Illinois Auction License Act and Administrative Rules

After an auction is completed, what does the auctioneer owe the seller?

  1. Only a check for the net proceeds, with no statement
  2. A written accounting of the sale and the proceeds due Correct answer.
  3. A copy of each buyer's identification document
  4. A verbal report at the next auction the auctioneer conducts

Explanation

The auctioneer must account to the seller for all money received and disbursed in connection with the sale, supported by records of the auction. This accounting protects both parties if a dispute later arises over price, premiums, or expenses.

Question 36Illinois Auction License Act and Administrative Rules

When an auctioneer advertises a sale, which information must appear in the advertisement?

  1. The auctioneer's home address and telephone number
  2. The number of lots and the expected duration of the sale
  3. The licensed name of the auctioneer or firm conducting the sale Correct answer.
  4. The seller's tax identification number

Explanation

Advertising must be truthful and must identify the licensed name under which the auctioneer or auction firm is authorized to operate. Advertising under an unlicensed name or in a way that misleads the public about who is conducting the sale is a violation.

Question 37Illinois Auction License Act and Administrative Rules

A licensed auctioneer wants to pay a restaurant owner 20 percent of the commission for referring a seller. This payment is:

  1. Prohibited, because auction fees may not be shared with unlicensed persons Correct answer.
  2. Permitted if the restaurant owner attends the auction in person
  3. Permitted up to 10 percent of the commission earned
  4. Permitted if the referral agreement is written and signed by both parties

Explanation

Compensation for auction services may not be shared with a person who is not licensed under the Act. Fee splitting with unlicensed referral sources is a ground for discipline because it invites unlicensed influence over the sale.

Question 38Illinois Auction License Act and Administrative Rules

What is the auctioneer's obligation concerning the confidential reserve amount the seller has set?

  1. Disclose the reserve amount only to bidders who ask for it in writing
  2. Keep the reserve confidential unless the seller authorizes disclosure Correct answer.
  3. Announce the reserve amount to all bidders before bidding opens
  4. Post the reserve amount in writing at the registration desk

Explanation

The reserve is the seller's confidential minimum, and the auctioneer may not reveal it without the seller's permission. What must be announced is that the sale is being conducted with reserve, not the dollar figure. Disclosing the confidential amount would breach the fiduciary duty owed to the seller.

Question 39Illinois Auction License Act and Administrative Rules

Two bidders claim to have made the high bid at the same moment. What is the auctioneer's proper course of action?

  1. Decide the dispute or reopen the bidding Correct answer.
  2. Sell to the bidder the auctioneer personally prefers
  3. Declare the item unsold and end the sale
  4. Sell to the bidder who registered first

Explanation

When a dispute arises among bidders, the auctioneer may resolve it or reopen the bidding so the matter is settled fairly and in the open. The auctioneer's determination of the high bidder controls unless the sale is reopened.

Question 40Illinois Auction License Act and Administrative Rules

At what moment is a bidder bound to buy the item?

  1. When the bidder registers and receives a bidder number
  2. When the bidder first raises a hand or bidding paddle
  3. When the bidder pays a deposit to the auction clerk
  4. When the auctioneer announces the item sold Correct answer.

Explanation

A sale is complete when the auctioneer announces it, whether by word or by the fall of the hammer. Bids made before that point are offers that may be rejected or that may be superseded, and registration or deposit payment alone creates no obligation to buy.

Question 41Illinois Auction License Act and Administrative Rules

An auctioneer is offered a fee by a buyer to protect the buyer's interests in the same auction. What must the auctioneer do?

  1. Disclose the arrangement and obtain the seller's consent Correct answer.
  2. Accept the fee, because buyers often pay premiums to auctioneers
  3. Decline to conduct the auction for either party
  4. Accept the fee but reduce the seller's commission by half

Explanation

An auctioneer owes loyalty to the seller and may not accept compensation from both sides without full written disclosure and consent from the party whose interests are affected. Undisclosed dual compensation is a conflict of interest and a ground for discipline.

Question 42Illinois Auction License Act and Administrative Rules

An auctioneer's Illinois license expired and was never renewed, yet the auctioneer conducts a sale three months later. That conduct is:

  1. Permitted, because a six-month grace period applies after expiration
  2. Permitted, if the seller signs a written waiver of licensure
  3. Permitted, if the renewal fee is paid within 30 days after the sale
  4. Unlicensed practice subject to discipline and civil penalties Correct answer.

Explanation

Once a license expires, the person no longer holds authority to conduct auctions, and doing so is unlicensed practice that the Department may enjoin and penalize. A private waiver from a seller cannot supply authority the statute confers.

Question 43Illinois Auction License Act and Administrative Rules

A Department investigator appears at the auctioneer's office during business hours and asks to examine records of recent auctions. The auctioneer must:

  1. Provide only the records the seller authorizes in writing
  2. Refuse unless the investigator produces a search warrant
  3. Refuse, because the records belong to the seller
  4. Make the records available for inspection Correct answer.

Explanation

Licensees must keep auction records and make them available to the Department for examination as part of its regulatory and disciplinary functions. Refusing to produce records obstructs the Department's investigation and is itself a ground for discipline.

Question 44Illinois Auction License Act and Administrative Rules

A high bidder refuses to pay and complete the purchase. What may the seller do?

  1. Require the auctioneer to cover the shortfall from the trust account
  2. Resell the goods and hold the defaulting bidder for any loss Correct answer.
  3. Treat the bid as unenforceable and return all deposits
  4. Require the seller to sue the bidder before any resale occurs

Explanation

When the high bidder defaults, the seller may resell the goods and recover any deficiency from the defaulting bidder, applying the deposit to the loss. The auctioneer's trust account is not a source of funds to cover a buyer's breach.

Question 45Illinois Auction License Act and Administrative Rules

An auctioneer owns a share of the goods being offered and will share in the proceeds. What is required?

  1. Sell the goods by sealed bid instead of at auction
  2. Nothing, because part ownership is irrelevant to the sale
  3. Transfer the auction to an auctioneer with no interest
  4. Disclose the ownership interest to bidders Correct answer.

Explanation

An auctioneer must disclose any ownership or financial interest that could affect a buyer's decision or the auctioneer's independence. Concealing the interest is a misrepresentation and breaches the duty of fair dealing owed to bidders.

Question 46Illinois Auction License Act and Administrative Rules

A seller tells the auctioneer that, at tomorrow's advertised absolute auction, the seller's brother will bid on the seller's behalf to keep the price up. What should the auctioneer do?

  1. Allow it, if the seller signs a written indemnity agreement for the firm
  2. Refuse, because a seller may not bid at an absolute auction Correct answer.
  3. Allow it, because the brother will register as a bidder and pay in cash
  4. Allow it, but announce the arrangement to all bidders during the sale

Explanation

An absolute auction must be sold to the highest genuine bidder with no reserve and no seller participation, so a bid planted by or for the seller contradicts the advertised terms. Accepting or arranging such a bid is deceptive conduct and a ground for discipline.

Question 47Illinois Auction License Act and Administrative Rules

Just before a sale, the seller tells the auctioneer that an item's engine block is cracked and does not want buyers told. The auctioneer should:

  1. Mention the defect only if a bidder asks about the engine
  2. Disclose the defect or withdraw the item from the sale Correct answer.
  3. Disclose the defect only after the hammer falls
  4. Say nothing, because the sale is being conducted as-is

Explanation

An auctioneer may not make, or help the seller make, a material misrepresentation, and an as-is sale does not license concealment that misleads bidders. If the seller insists on hiding a known material defect, the auctioneer must not offer the item under those conditions.

Question 48Illinois Auction License Act and Administrative Rules

An auctioneer agrees with a seller to report a lower price in the auction records than the price actually paid, so a consignor receives less. This conduct is:

  1. A recordkeeping error that can be corrected at renewal
  2. Fraud and a ground for discipline, including revocation Correct answer.
  3. Acceptable, if both the seller and the buyer agree to it
  4. Permitted, if the auctioneer keeps a second private record

Explanation

Recording a false sale price to reduce amounts owed to a consignor is dishonest dealing and fraud, which subjects the licensee to discipline up to revocation. Agreement between the seller and buyer does not cure the injury to the consignor or the falsified records.

Question 49Illinois Auction License Act and Administrative Rules

During a sale, an auctioneer sees a group of bidders agreeing among themselves to hold bids down so one member wins and later resells to the group. The auctioneer should:

  1. Accept the bids, because all bids at auction are confidential
  2. Continue the sale and reduce the seller's commission
  3. Cancel the seller's listing agreement with the firm
  4. Reject the collusive bids and report the conduct Correct answer.

Explanation

Bid rigging is prohibited because it suppresses competitive bidding and cheats the seller, and an auctioneer may not knowingly accept bids that are part of such an arrangement. The licensee should reject the tainted bids and may report the collusion.

Question 50Illinois Auction License Act and Administrative Rules

A buyer pays a 10 percent deposit, but the seller is later unable to deliver clear title to the property. What must the auctioneer do with the deposit?

  1. Return the deposit to the buyer Correct answer.
  2. Send the deposit to the seller as liquidated damages
  3. Hold the deposit in trust until a substitute lot is sold
  4. Apply the deposit toward the auctioneer's commission for the sale

Explanation

Deposits are held in trust for a sale, and when the sale fails through no fault of the buyer, the money must be returned. Applying the funds to the auctioneer's commission or remitting them to the seller would convert trust money to which neither is entitled.