Texas Licensed Auctioneer

Under the Texas Auctioneer License Act (Occupations Code Chapter 1802), which state agency regulates auctioneers?

• ATexas Real Estate Commission (TREC)
• BTexas Department of Licensing and Regulation (TDLR)
• CTexas Comptroller of Public Accounts
• DTexas Secretary of State

How many total questions are on the Texas auctioneer licensing exam?

• A50 questions
• B75 questions
• C80 questions (75 scored + 5 pretest)
• D100 questions

What is the passing score for the Texas auctioneer licensing exam?

• A60%
• B70%
• C75%
• D80%

What is the fee for the Texas auctioneer licensing examination?

• A$25
• B$52
• C$100
• D$150

How much time is allowed to complete the Texas auctioneer exam?

• A60 minutes
• B90 minutes
• C120 minutes
• D180 minutes

Which exam topic area has the MOST questions on the Texas auctioneer exam?

• ADeceptive Trade Practices (6 questions)
• BBusiness and Commerce Code (9 questions)
• CAuctioneer Act and Rules (16 questions)
• DReal Estate (8 questions)

Under the Texas Deceptive Trade Practices Act (DTPA), which of the following constitutes a deceptive trade practice at an auction?

• AOffering items at auction without a minimum price
• BMisrepresenting the characteristics, ingredients, uses, benefits, or qualities of goods o…
• CCharging a buyer's premium that is clearly disclosed
• DConducting an absolute auction

Under Texas law, what is the PRIMARY duty of an auctioneer to the seller (principal)?

• ATo obtain the lowest possible price
• BA fiduciary duty to act in the seller's best interest, including loyalty, honesty, and fu…
• CTo maximize the buyer's premium collected
• DTo minimize the time spent conducting the auction

Under Texas Occupations Code Chapter 1802, what is required before a person can practice as an auctioneer in Texas?

• ANo requirements — anyone can conduct auctions
• BThe person must obtain an auctioneer license from TDLR
• COnly a general business license is required
• DA real estate license is sufficient

Under the Texas Business and Commerce Code, what is the legal effect of the fall of the auctioneer's hammer?

• AIt has no legal significance
• BIt completes the sale and forms a binding contract between the seller and the highest bid…
• CIt merely indicates the auctioneer's preference
• DIt creates an option for the buyer to purchase

Under Texas law, what are the trust fund requirements for auctioneers?

• AAuctioneers are not required to maintain trust funds
• BAuction proceeds belonging to clients must be held in a separate trust account and cannot…
• CTrust funds only need to be maintained for real estate auctions
• DTrust fund rules only apply to auctions over $50,000

A Texas auctioneer is selling real property at auction. Which additional licensing or regulatory considerations apply?

• ANo additional requirements beyond an auctioneer license
• BA licensed auctioneer is exempt from the Real Estate License Act while conducting the sal…
• CReal property cannot be sold at auction in Texas
• DOnly a business license is needed

Under the Texas DTPA, what remedies are available to a consumer who is harmed by a deceptive trade practice at an auction?

• ANo remedies are available
• BActual damages only
• CActual damages, and up to three times actual damages for knowing or intentional violation…
• DOnly a refund of the purchase price

What is the Texas sales tax obligation of an auctioneer selling tangible personal property at auction?

• AAuctioneers are exempt from collecting sales tax
• BAuctioneers must collect applicable Texas state and local sales tax on taxable items and…
• CSales tax only applies to new items, not used items
• DSales tax is only the buyer's responsibility

Under Texas law, what is the maximum combined state and local sales tax rate?

• A6.25%
• B7.5%
• C8.25%
• D10%

A buyer purchases an item at a Texas auction for $2,000 (hammer price). There is a 10% buyer's premium and 8.25% sales tax. What is the total amount the buyer owes?

• A$2,181.50
• B$2,365.00
• C$2,381.50
• D$2,200.00

Under Texas law, what special requirements apply to selling motor vehicles at auction?

• ANo special requirements
• BTitle transfer documentation, odometer disclosure, and compliance with Texas motor vehicl…
• COnly a bill of sale is required
• DMotor vehicles cannot be sold at auction in Texas

What does the Texas Parks and Wildlife Code regulate regarding auctions?

• ANothing related to auctions
• BThe sale or auction of certain wildlife, taxidermy, and related items that may be restric…
• COnly auctions held in state parks
• DThe licensing of outdoor auctioneers

Under the Texas Food, Drug, and Cosmetic Salvage Act, what requirement applies to auctioneers selling salvage goods?

• ANo special requirements
• BSalvage dealers and distributors must be licensed, and certain food, drug, and cosmetic s…
• CSalvage items cannot be sold at auction
• DOnly pharmacists can sell salvage items

What federal regulations affect the auctioning of alcohol, tobacco, and firearms in Texas?

• ANo federal regulations apply to auctions
• BFederal ATF regulations restrict the sale of firearms (requiring FFL involvement), alcoho…
• COnly state regulations apply
• DFederal regulations only apply to online auctions

Under TDLR rules, what are the grounds for disciplinary action against a Texas auctioneer?

• AOnly criminal convictions
• BViolations of the Auctioneer License Act, TDLR rules, fraud, trust fund violations, incom…
• COnly customer complaints
• DOnly failure to pay fees

What is 'shill bidding' and how does Texas law treat it?

• AA legal technique to stimulate bidding
• BAn illegal practice of placing bids to artificially inflate prices, prohibited under Texa…
• CA type of absentee bidding
• DA method of opening bidding

Under the Texas Business and Commerce Code, what is the difference between an auction 'with reserve' and 'without reserve'?

• AThere is no legal distinction
• BIn an auction with reserve, the seller may withdraw goods before the sale is complete; in…
• CWith reserve means only invited bidders can participate
• DWithout reserve means there are no terms and conditions

A Texas auctioneer advertises an auction as 'absolute — everything sells to the highest bidder.' At the auction, the auctioneer withdraws a tractor because bidding only reached $5,000. What legal issue arises?

• ANo issue; the auctioneer always has the right to withdraw items
• BThe auctioneer may be liable for breach of contract, as an absolute auction creates an ob…
• CThe buyer must accept the withdrawal
• DOnly the seller can be sued

Under Texas law, what is the legal term for the relationship between an auctioneer and the seller?

• ALandlord and tenant
• BPrincipal and agent, creating a fiduciary relationship
• CIndependent contractor only
• DPartnership

A Texas auctioneer's auction contract specifies a 12% commission on gross sales. The auction generates $75,000 in gross sales. What is the auctioneer's commission?

• A$7,500
• B$9,000
• C$10,000
• D$12,000

Under the Texas DTPA, which of the following is considered an 'unconscionable action or course of action'?

• ACharging a fair market commission rate
• BTaking advantage of a consumer's lack of knowledge or ability to a grossly unfair degree
• COffering items at auction without a reserve price
• DDisclosing the terms and conditions of sale

What is a buyer's premium, and what disclosure is required in Texas?

• AA discount for early payment; no disclosure needed
• BAn additional fee charged to the buyer above the hammer price; must be clearly disclosed…
• CA tip given to the auctioneer; optional
• DA fee charged only to dealers; no disclosure required

Under Texas law, what happens when an auctioneer comingles trust funds with personal operating funds?

• ANothing, if the auctioneer can account for all funds
• BThis is a serious violation that can result in license revocation, criminal charges for t…
• CIt is only a problem if funds are lost
• DCommingling is permitted for amounts under $1,000

A Texas resale certificate is presented by a buyer at auction. What does this mean for sales tax purposes?

• AThe buyer gets a discount on the purchase price
• BThe buyer is purchasing for resale, and the transaction is exempt from sales tax if a val…
• CThe buyer must pay double sales tax
• DThe certificate has no effect on sales tax

Under Texas law, what is the penalty for conducting an auction without a valid auctioneer license?

• AA verbal warning
• BCivil penalties up to $5,000 per violation, plus possible criminal charges and injunctive…
• CA $50 fine
• DNo penalty if the person is licensed in another state

Under the Texas Business and Commerce Code, at what point may a bidder retract a bid at auction?

• ANever once a bid is placed
• BAt any time before the auctioneer's announcement of completion of the sale
• COnly within 5 minutes of placing the bid
• DOnly with written notice to the auctioneer

What is the auctioneer's obligation regarding known defects in items sold at a Texas auction?

• ANo obligation because items are sold 'as is'
• BThe auctioneer must disclose all known material defects to potential bidders, even for 'a…
• COnly defects that affect safety need to be disclosed
• DDefects only need to be disclosed for items over $500

Under Texas law, which of the following practices constitutes advertising fraud by an auctioneer?

• AAdvertising a date and time for the auction
• BAdvertising items as 'antique' when they are modern reproductions
• CIncluding the auctioneer's license number in the ad
• DListing the terms of sale in the advertisement

An auctioneer in Texas sells livestock at auction. What additional considerations apply?

• ANo additional requirements
• BCompliance with Texas Agriculture Code, brand inspection requirements, health certificate…
• COnly a veterinary inspection is needed
• DLivestock cannot be sold at auction in Texas

A Texas auctioneer collects $100,000 at an auction. The contract provides for a 15% commission, $3,000 in advertising, and $2,000 in setup expenses — all charged to the seller. What net amount does the seller receive?

• A$80,000
• B$82,000
• C$85,000
• D$90,000