2.1 Auction, Auctioneer, Auction Firm, Auction Service, Auction Contract & Online Auction
Key Takeaways
- The Illinois PSI exam is 50 scored items; 37 sit in the Auction License Act (Articles 5, 10, 15, 20, and 30) plus 68 Ill. Adm. Code Part 1440, so 225 ILCS 407/5-10 is tested as the vocabulary for the entire law bucket.
- An auctioneer is a person or entity who, for another, for a fee, compensation, commission, or other valuable consideration — including the intention or expectation of receiving it — offers, negotiates, or attempts to negotiate an auction contract, sale, purchase, or exchange; that two-hook test requires a license unless a Section 10-1 exemption applies.
- Section 5-10 defines an auction contract as a written agreement between the auctioneer or auction firm and a seller; Rule 1440.10 still says written or oral, but Section 15-10 independently forbids conducting an auction or providing an auction service without a written seller contract entered into prior to the auction date.
- An online auction is an auction or auction service conducted by an auctioneer via a website, application, interactive computer service, or similar media; an Internet auction listing service is a self-serve bid platform that does not examine, set the price, prepare the description, or use a natural person as an auctioneer.
- P.A. 104-145 (eff. 1-1-26) added estate sale and estate sale service as personal-property definitions; they are labels only in this chapter — the four-part license test and owner, executor, and reseller exceptions are Chapter 3.
Auction, Auctioneer, Auction Firm, Auction Service, Auction Contract & Online Auction
The Illinois PSI Licensed Auctioneer exam is a 50-question, one-hour test. 37 of those 50 items sit in a single content bucket: the Auction License Act (Articles 5, 10, 15, 20, and 30) and 68 Ill. Adm. Code Part 1440. Article 5 is the dictionary for that entire law bucket. The remaining three "other topics" items also flag definition of terms. A candidate who treats 225 ILCS 407/5-10 as background reading is volunteering to miss questions that look like practice, advertising, or exemption items but are actually definition items.
Public Act 104-145 (effective January 1, 2026) amended Section 5-10. Study the post-amendment language. Several terms that candidates used to treat as slang — online auction, estate sale, estate sale service — are now statutory.
The license trigger lives inside the definitions
Section 10-1 makes it unlawful to conduct an auction, provide an auction service, hold yourself out as an auctioneer, or advertise as an auctioneer in Illinois without a Department-issued license, unless an exemption applies. You cannot apply 10-1 until you can parse 5-10. The operational test is short:
- Is the person acting for another?
- Is the person receiving, or intending or expecting to receive, a fee, compensation, commission, or any other valuable consideration?
- Is the activity an auction, a sale at auction, or an auction service — including offering, negotiating, or attempting to negotiate an auction contract, sale, purchase, or exchange?
If the answers are yes, a license is required unless a Section 10-1 exemption fits. Chapter 3 works the exemptions. This chapter works the vocabulary that decides whether you ever reach those exemptions.
Auction
Section 5-10, as amended by P.A. 104-145, defines auction as the sale or lease of property, real or personal, by means of exchanges between an auctioneer and prospective purchasers or lessees. The process is a series of invitations or bids made by the auctioneer to prospective purchasers or lessees for the purpose of obtaining an acceptable offer. The statute expressly includes sales and leases conducted via mail, telecommunications, or the Internet.
Four exam points sit in that sentence:
- Sale or lease. A livestock lease-by-bid and a farm-equipment liquidation are both auctions.
- Real or personal. Real estate sold from the block is still an auction under this Act. Real estate also has its own meaning, borrowed from Section 1-10 of the Real Estate License Act of 2000. Do not assume an auctioneer license is a broker license, and do not assume a broker license is an auctioneer license.
- Invitations or bids. Competitive offer-and-counteroffer is the method. A posted garage-sale price with no bidding is not this definition.
- Medium does not matter. Live outcry in a barn, a conference-call bid, a mailed bid sheet, a timed online catalog, and a smartphone app are all an auction if the other elements are present.
Auctioneer
Auctioneer means a person or entity who, for another, for a fee, compensation, commission, or any other valuable consideration, at auction or with the intention or expectation of receiving valuable consideration by auction, sale at auction, or providing an auction service, offers, negotiates, or attempts to negotiate an auction contract, sale, purchase, or exchange of goods, chattels, merchandise, personal property, real property, or any commodity that may lawfully be kept or offered for sale by or at auction.
Memorize the two hooks PSI item writers use:
| Hook | What it catches | What it does not catch |
|---|---|---|
| For another | Calling, listing, or contracting to sell a neighbor's combine, an estate's furniture, or a bank's repossessed inventory | An owner selling her own property (subject to the 10-1 owner rules in Chapter 3) |
| Valuable consideration | Commission, flat fee, salary, a gift card, lodging, a thank-you bonus, or the mere expectation of being paid | Truly donated services for a qualifying charitable event (again, Chapter 3) |
Attempting to negotiate is enough. You do not have to knock the hammer down. Offering a listing, pitching a commission, or circulating a proposed auction contract for someone else's goods is already auctioneer activity.
Auction firm and auction service
Auction firm means a corporation, partnership, or limited liability company that acts as an auctioneer and provides an auction service. Two consequences follow.
First, the entity types are closed: corporation, partnership, or LLC. A sole proprietor is an auctioneer, not an auction firm, and practices under the individual license. Second, the firm itself acts as an auctioneer. An LLC that runs sales cannot hide behind the personal license of a member. Firm licensure, managing-auctioneer designation, and non-participation affidavits are Chapter 4 topics; the definition is what tells you a firm license is even in play.
Auction service means arranging, managing, advertising, or conducting auctions. Advertising someone else's sale for a fee, booking the tent and clerking crew, and crying the sale are all auction service. You do not need to be the person with the microphone to be inside the Act.
Auction contract: written in the Act, written before the sale date in 15-10
Section 5-10 defines auction contract as a written agreement between an auctioneer or auction firm and a seller or sellers. Rule 1440.10 still recites a written or oral agreement. That conflict is deliberate exam bait. Prefer the Act. Independently of the 5-10 definition, Section 15-10 (as amended by P.A. 104-130, effective January 1, 2026) forbids an auctioneer or auction firm from conducting an auction or providing an auction service unless the auctioneer or firm enters into a written auction contract with the seller prior to the date of the auction. An oral handshake, a text that says you are hired, or a post-sale promise to paper it later does not satisfy 15-10. Chapter 6 covers the mandatory disclosures inside that writing. This chapter only needs you to know that the statutory contract is written, it is with the seller, and 15-10 puts it on the calendar before sale day.
Online auction versus Internet auction listing service
P.A. 104-145 added online auction: an auction or auction service conducted by an auctioneer via a website on the Internet, an application, an interactive computer service, or other similar media. If an auctioneer is running the sale through a site or app, it is an online auction. It is still an auction. The 5-10 for-another / consideration test still applies.
Internet auction listing service is the opposite model. It is a website or other interactive computer service designed to allow, or advertised as allowing, users to offer personal property or services for sale or lease through an online bid submission process, and that does not:
- examine the personal property or service,
- set the price,
- prepare the description, or
- in any way utilize the services of a natural person as an auctioneer.
Section 10-1(d) exempts a person who provides an Internet auction listing service. That exemption is for the passive platform, not for the auctioneer who uses the Internet as the ring. If a natural person catalogs lots, writes descriptions, sets a reserve, calls bids, or otherwise performs auctioneer functions on the site, the listing-service definition fails and you are back in online auction / auction service.
Interactive computer service (also 5-10) means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including a service that provides access to the Internet. The term is the statutory bridge that lets app and website sit inside both the online-auction and listing-service definitions.
Estate sale terms (pointer only)
P.A. 104-145 added two personal-property definitions. Estate sale means a sale for liquidation of personal property of an estate owned by one or more individuals, families, or legal representatives, advertised and scheduled for a predetermined amount of time, to which the public is invited to participate in a negotiation or bid. Estate sale service means the performance of an auction service for the owners of personal property to be sold at an estate sale, where an auctioneer undertakes the responsibility of conducting the sale. Estate sale service does not include the sale of real property.
IDFPR's 2026 estate-sale FAQ treats licensure as turning on a four-part fact pattern (for another and for compensation; advertised and scheduled; open to the public; property bid on or negotiated). Owner, beneficiary, executor/administrator, guardian/receiver, and anonymous third-party reseller exceptions live in 10-1(e)–(f). Learn the labels here. Work the exemptions in Chapter 3. Do not treat estate sale as a synonym for unlicensed.
Goods, real estate, and the Department
Goods means chattels, movable goods, merchandise, or personal property or commodities of any form or type that may be lawfully kept or offered for sale. Stolen goods, contraband, and items that may not lawfully be offered are outside goods.
Real estate means real estate as defined in Section 1-10 of the Real Estate License Act of 2000 or its successor Acts. The Auction License Act borrows that definition rather than inventing a second one.
Department means the Department of Financial and Professional Regulation (IDFPR). Division means the Division of Real Estate within the Department. Secretary means the Secretary of Financial and Professional Regulation or his or her designee. PSI items that say the Department mean IDFPR, not the county clerk and not the Secretary of State (except where a vehicle-dealer exemption, taught in Chapter 3, actually names the Secretary of State).
Person means an individual, association, partnership, corporation, or limited liability company, or the officers, directors, or employees of the same. Employees can be persons under the Act. That is why unlicensed-assistant rules in Section 2.2 matter.
A McLean County farmer hires Jordan, who has no Illinois auctioneer license, to arrange, advertise, and cry a machinery auction of the farmer's equipment. Jordan will be paid a $2,000 flat fee. Under 225 ILCS 407/5-10, which statement best describes Jordan's status?
Which platform matches the Section 5-10 definition of an Internet auction listing service rather than an online auction?
Rule 1440.10 still describes an auction contract as a written or oral agreement. A seller and an auctioneer agree by phone on Wednesday to a Saturday farm sale and never sign anything. Which statement is accurate under the Act?