CHAPTER 16: ILLINOIS REAL ESTATE LICENSING LAW
If a managing broker of a branch office dies, the sponsoring broker must: A. Within 15 days request a temporary permit from IDFPR B. Assume responsibility for the office C. Do nothing D. Both a and b above
D. Both a and b above (D) If the office is to remain open, the employing sponsoring broker must assume responsibility for the office AND obtain a temporary permit from IDFPR within fifteen (15) days.
An exclusive right-to-sell listing contract contains which of the following? A. Description of the property B. Listing price C. An automatic renewal clause D. Both a and b above
D. Both a and b above Exclusive right-to-sell listings contain a description and a listing price. However, they must contain a definite termination date, not an automatic renewal clause.
In Illinois, a branch real estate office may be managed by: A. The same managing broker as the main office, so long as IDFPR is notified B. An experienced Licensee C. A designated managing broker, other than the owner of the company, D. Both a and c
D. Both a and c The operation of a branch office must be supervised by the principal and/or managing broker. IDFPR must be notified as to whom the designated office manager is. A broker is allowed to be the managing broker for more than one office.
Jane Doe has a Licensee's license, but a broker has not sponsored her for six (6) years. She is thinking about renewing her license and going to work for John Jones Realty. She: A. Must complete 12 hours of continuing education and pay the reinstatement fees B. Can be employed immediately so long as the broker issues a temporary work permit C. Must report her change of address D. Cannot renew her license
D. Cannot renew her license After two (2) years of not being sponsored by a broker, a licensee cannot renew their real estate license. They must fulfill the requirements of a new license.
The term "ministerial acts" includes all of the following, except: A. Attending an open house and responding to questions about the property from a consumer B. Responding to questions from consumers walking into a licensee's office concerning brokerage services offered for particular properties C. Accompanying an appraiser, inspector, contractor, or similar third party on a visit to a property D. Entering into a relationship in which the licensee is representing both the buyer and the seller in one transaction
D. Entering into a relationship in which the licensee is representing both the buyer and the seller in one transaction
Ms. Smart was hired by Broker Kingston as an administrative support person for her downtown office. Broker Kingston agrees to pay Ms. Smart a regular salary for her duties as an employee. In addition to the regular office functions, Ms. Smart may legally perform, on behalf of her employer, which of the following duties? A. Soliciting listings and sharing commissions with salespeople in the office B. Showing prospective buyers available listed properties and obtaining offers to submit to sellers C. Sell an apartment building that is managed by broker Kingston D. Fill in the blanks of pre-printed sales contracts for salespeople in the employing broker's office
D. Fill in the blanks of pre-printed sales contracts for salespeople in the employing broker's office (D) As an administrative support person, Ms. Smart is permitted to fill in the contract blanks for office Licensees.
When a buyer and a seller have a written agreement as to the disposition of earnest money in an interest-bearing account, which is entitled to the interest? A. The buyer B. The seller C. It is split equally between the buyer and seller D. It is disbursed according to the written contract
D. It is disbursed according to the written contract When a buyer and seller have an agreement as to the disposition of earnest money in an interest-bearing account, the earned interest will be paid according to the terms of the written agreement. p243 If interest is paid on the deposit, the disposition of any accrued interest must be designated by the parties in writing, and a separate interest bearing account must be set up for that deposit.
The commissions that a real estate broker may charge are regulated by: A. The local board of realtors B. Be a retired broker C. The National Association of Realtors D. None of the above
D. None of the above (D) Since commissions are viewed as compensation for services, there are no limits as to the amount the broker may charge
A licensee's 'unlicensed assistant' may not: A. Interpret information on listings, titles, financing, contracts, closings, or other information relating to a transaction B. Negotiate or agree to any commission, commission split, management fee, or referral fee on behalf of a licensee C. Explain or interpret a contract, listing, lease agreement, or other real estate document with anyone outside the licensee's firm D. Perform any of the above acts
D. Perform any of the above acts
Which of the following items is not necessarily part of the independent contractor's agreement? A. Compensation B. Supervision C. Duties D. Sales quotas
D. Sales quotas Sales quotas are not a requirement. Information concerning compensation, supervision and performance of duties must be in the employment contract.
Brokers are allowed to operate their real estate offices out of their principal residence provided that: A. Hours of operation are posted B. Parking is provided for clients C. Two telephone numbers are listed D. The broker's real estate license is prominently displayed at the residence
D. The broker's real estate license is prominently displayed at the residence The real estate license must be displayed since the residence is also being used as a place at business.
The Illinois Licensing Act of 2000 protects: A. The buyer B. The seller C. The broker D. The public
D. The public (D) Earnest money deposits placed into interest or non-interest bearing accounts must be placed into federally insured depositories.
When a Licensee terminates his employment with his broker, his broker must: A. Remove the Licensee's license from the wall, endorse it and give it to the Licensee B. Remit the original Licensee's license to IDFPR within 10 days C. Send the Licensee's sponsor card to IDFPR within 2 days D. Telephone the information to IDFPR
(A) When a Licensee terminates employment with a broker, the broker must endorse the license and give the original endorsed license to the Licensee. p260 If a broker, leasing agent, or licensed personal assistant terminates employment with the sponsoring broker for any reason, the licensee must obtain his license from the sponsoring broker, or managing broker, if so designated by the sponsoring broker. • The sponsoring broker signs and dates the license, which indicates that the relationship has been terminated. • The sponsoring broker must send the Illinois Department of Financial and Professional Regulation (IDFPR) a copy of the terminated license within two days of the termination or be subject to discipline for failure to do so.
Illinois law requires a licensee to promote the best interests of the client. This would include all of the following except: A. Timely presentation of all offers to and from the client, unless the client has waived this duty B. Obeying specific directions of the .client even if they are contrary to applicable statutes, ordinances, or rules C. Timely accounting for all money and property received in which the client has, may have, or should have had an interest D. Disclosing to the client material facts concerning the transaction of which the licensee has actual knowledge, unless that information is confidential information
(B) Illinois law specifically prohibits a licensee from obeying specific directions of the client IF those instructions are contrary to applicable statutes, ordinances, or rules. All of the other choices constitute proper behavior by a licensee.
No later than entering into a brokerage agreement with a client, a broker shall advise the client as to the broker's compensation and whether the broker will share that compensation with brokers who represent other parties in a transaction. A. False B. True C. True, but only if requested by the seller D. True, but only if requested by the buyer
(B) No later than entering into a brokerage agreement with a consumer, a broker shall advise the consumer as to the broker's compensation and whether the broker will share the compensation with brokers who represent other parties in a transaction.
John Jones, a Licensee with Fargo Realty, has a listing on a house. The Licensee finds a ready, willing and able buyer and submits an offer to purchase. Meanwhile, the seller decides not to sell the house and asks to be released from the listing agreement with the broker. The broker agrees to release the seller from the listing contract agreement. What recourse does the Licensee have? A. None B. Sue Fargo Realty C. Sue the MLS system D. Sue the seller
(B) The Seller Agreement (Listing Agreement) is made between the Sponsoring Broker and the Seller. If the Sponsoring Broker and Seller decide to cancel the Seller Agreement, the, licensee is not a part of this agreement and cannot sue the Sponsoring Broker for any decision that the Sponsoring Broker makes in relation to this Seller Agreement.
A broker may be disciplined for which of the following activities? A. Failing to review and sign a closing statement B. Treating clients differently C. Continuing to manage a property with full knowledge of code violations that threaten the public interest D. All of the above
(B) and (C) are correct. Real Estate Broker is not responsible for reviewing and signing a closing statement.
A broker takes money from the escrow account and pays his overdue personal real estate taxes because he is afraid his real estate license will be suspended. Later, the broker replaces this money prior to the closing. The broker is guilty of: A. Nothing he has a duty to keep his license active at all times B. Redlining C. Conversion D. Commingling
(C) If a real estate licensee takes money from an escrow account to pay personal bills, the licensee is guilty of conversion.
A builder or developer of a housing project who builds and sells units within his or her own project is required to: A. File a zoning variance B. Have a valid Illinois real estate license C. Employ a real estate broker to sell the units D. None of the above
(D) A builder who owns the land is not required to have a real estate license when building and selling units from the owner's project.
A valid deed contains all of the following, except: A. The name and signature of the grantor B. The name of the grantee and the grantee's present address C. The property's legal description D. An acknowledgment of the grantor before a notary public
(D) A valid deed would contain the name and signature of the grantor, a description of the property, and the name of the grantee, who is not required to sign the document. p166 The following are the minimum requirements for a valid deed in Illinois: • Grantor, who has the legal capacity to execute (sign) the deed • Grantee named with reasonable certainty to be identified • Recital of consideration • Granting clause (words of conveyance, together with any words of limitation) • Accurate legal description of the property conveyed • Any relevant exceptions or reservations • Signature of the grantor, sometimes with a seal, witness, or acknowledgment • Delivery of the deed and acceptance by the grantee to pass title
The real estate commissions that are paid by the public to brokers are regulated by: A. The Illinois Department of Financial and Professional Regulations B. Local Boards of Realtors C. The Illinois Association of Realtors D. None of the above
(D) Real estate commissions that are paid by the general public to an employed real estate broker are not regulated. Commissions are established by negotiation between the employed sponsoring broker and the seller or buyer (the principal).
On a piece of property that was owned as of January 2010, counties that do not participate in the accelerated tax payment system would have the first payment due: A. January 2010 B. June 2010 C. January 2011 D. June 2011
(D) Taxes are payable in the year after they are levied. Therefore, the first installment penalty date is June 1, 2011.
All of the following must be licensed by IDFPR, except: A. A manager of an apartment building in which he resides B. A dealer who handles options on behalf of real estate brokers C. A person who sells or offers for sale a property owned by another and who receives compensation for such efforts D. A leasing agent who has no more than five commercial buildings
A) As the term "Resident Property Manager" is defined, the manager must reside on the property that the individual manages.
Joe Bums dies Without a Will. After all debts are cleared, his estate amounts to $120,000. Bums is survived by his Wife and three daughters. How much money will each of the daughters receive? A. $20,000 B. $30,000 C. $40,000 D. $50,000
A. $20,000 (A) Under the Laws of Descent and Distribution, a surviving spouse receives no less than 1/2 of the decedent's estate, and the children receive the balance to share in equal portions.
A violation of the License Act by a real estate licensee could result in: A. A maximum fine of $25,000 B. A fine up to $10,000 C. A maximum fine of $5,000 D. A maximum fine of $1,000
A. A maximum fine of $25,000
According to Illinois law, who must be licensed as a real estate broker? A. A person seeking to make a commission in a real estate transaction B. An attorney in fact C. An attorney preparing real estate sales contract D. A person selling his own home
A. A person seeking to make a commission in a real estate transaction
The requirement to look out for the best interest of the client applies to which of the following? A. A property manager employed by an owner B. A consumer asking questions at an open house C. A buyer asking a listing agent how many bedrooms the house contains D. All of the above
A. A property manager employed by an owner
A real estate licensee is successful in selling a piece of property, which was difficult to market, and the grateful seller not only pays the commission but also includes a $500 gift certificate for the Licensee. What should the Licensee do in this situation? A. Accept both the commission and the gift certificate on behalf of the broker because it was earned B. Accept the commission, but refuse the gift certificate because Licensee can only accept cash or its equivalent C. Accept the commission, but turn the gift certificate over to the broker D. Accept the commission, but convert the gift certificate into cash and return it to the seller as a gift
A. Accept both the commission and the gift certificate on behalf of the broker because it was earned
An exclusive right-to-sell listing is best defined as: A. Broker Employment Contract B. Sales Contract C. Verbal Listing Agreement D. One preferred by For Sale by Owners
A. Broker Employment Contract
All of the following are what a licensee can do for clients when acting as a dual agent. except: A. Disclose confidential information the licensee may know about the clients with the client's permission B. Disclose all latent material defects in the property that are known to the licensee C. Help the buyer or tenant to arrange for property inspections D. Provide information about comparable properties that have sold to the buyer so they do not submit a high offer
A. Disclose confidential information the licensee may know about the clients with the client's permission
Who is eligible for company benefits and medical insurance coverage? A. Employees B. Independent contractors C. Both of the above D. None of the above
A. Employees
All of the following are activities an employed 'unlicensed assistant' may perform, except: A. Host open houses, kiosks, home show booths or home fairs B. Place signs on property C. Order items of routine repair as directed by a licensee D. Act as a courier to deliver documents, pick up keys, etc
A. Host open houses, kiosks, home show booths or home fairs
In Illinois, real estate licenses may be issued by: A. IDFPR B. Any county located within the State of Illinois C. Any municipality located within the State of Illinois D. Any of the above
A. IDFPR
Broker "A" kept his escrow account in ABC Bank, but for various reasons decided to switch banks. The new bank is the XYZ Bank. How much notice must be given to IDFPR? A. Immediately B. 30 days C. 6 months D. 1 year
A. Immediately
Mr. Smith hired his unlicensed son-in-law to complete some electrical work in his single-family home. Mr. Smith then listed his house with broker Kent. Mr. Smith did not disclose that his son-in-law, an unlicensed electrician, did the electrical work. After the completion of the sale, the new owner, Mr. Johnson, suffered a financial loss due to the faulty electrical wiring done by Smith's son-in-law. Under these conditions, broker Kent: A. Is innocent of any wrongful act B. Could be reprimanded for net forewarning the purchaser C. Should have arranged for a proper electrical inspection prior to the sale of the property D. Could be held liable for monetary damages suffered by the purchaser
A. Is innocent of any wrongful act Due to the fact that the broker did not have prior knowledge, and it would be virtually impossible for anyone without electrical experience to diagnose the problem of the faulty electrical wiring done by the son-in-law, the broker would not be liable and would be considered to be innocent of any wrongful act.
A licensee may not accept finder's fees, commissions, discounts, or any other compensation from financial institutions, or title companies, unless the licensee: A. Makes prior written disclosure to all parties in the transaction B. Has obtained written approval from IDFPR C. Collects a referral fee which is less than $100 from a single transaction D. Reports the referral fee income to the Internal Revenue Service
A. Makes prior written disclosure to all parties in the transaction A licensee may not accept finder's fees, commissions, discounts, or any other compensation from financial institutions, or title companies, unless the licensee makes prior written disclosure to all parties in the transaction.
Setting an appointment to view property; describing a property or the property's condition in response to a consumer's inquiry, and showing a client through a property being sold by an owner on behalf of the owner are considered to be: A. Ministerial acts which do not create an agency relationship B. Violations of the Real Estate Act unless the licensee has a contract of employment with the person receiving the services C. Acts which constitute acting as a "dual agent" D. The normal expected duties of a good office administrative person
A. Ministerial acts which do not create an agency relationship
A broker writes an offer on a fellow broker's listing on Monday and collects the earnest money. The listing broker submits the offer to the seller on Wednesday. The seller counters the offer. The earnest money amount remains the same and the buyer accepts the counteroffer on Thursday. The earnest money must be deposited in the listing broker's escrow account: A. On Friday B. On Wednesday C. On Thursday D. One week from Friday
A. On Friday (A) When a selling broker obtains an earnest money deposit (whether a counteroffer is involved or not is immaterial), the selling broker has until the next business day, from the date of acceptance, to deliver the funds for deposit into the listing office's escrow account.
Sponsoring Broker Edwards hired Licensee Tennison as an independent contractor. The status of an independent contractor would permit Licensee Tennison to: A. Perform services only through the sponsoring broker B. Collect a commission in the Licensee's name only C. Work for several different brokers at the same time D. Advertise the listed property under the Licensee's own name
A. Perform services only through the sponsoring broker (A) The status of independent contractor permits a Licensee to perform services only through the sponsoring broker
In Illinois, according to law, mobile homes are taxed as: A. Personal property B. Real property C. 50/50 split between real and personal property D. 75% real and 25% personal property
A. Personal property
An example of an enforceable lease provision is the: A. Prohibition of a tenant subleasing to a third party without the lessor's consent B. Prohibition of a tenant reporting a fire code violation to the local authorities C. Prohibition of a tenant assigning a lease to certain minorities D. Prohibition of having more than three related children in the unit at any given time
A. Prohibition of a tenant subleasing to a third party without the lessor's consent A clause preventing subleasing from a tenant to a third party is enforceable.
A real estate Licensee is convicted of discrimination and a suit is filed. The plaintiff is awarded so much money that the licensee has to declare bankruptcy. The plaintiff then goes to the Real Estate Recovery Fund and files a claim and collects whatever money they have corning. In order to be reinstated as a real estate licensee, the licensee must: A. Repay the Real Estate Recovery Fund with interest B. Repay the Real Estate Recovery Fund, but no interest C. Show evidence of the bankruptcy D. None of the above
A. Repay the Real Estate Recovery Fund with interest
The Legislative General Assembly found that the application of the common law of agency to real estate brokers, Licensees and consumers of brokerage services had resulted in misunderstandings. This resulted in consequences contrary to the best interests of the public. Concerning the "Law of Agency" all of the following are true, except: A. The Illinois Real Estate Act was therefore amended to limit the number of individuals who could obtain a real estate license B. The intent of the agency law is to promote and provide stability in the real estate market C. The Legislature found that it was in the best interests of the public to provide codification of the relationships between real estate brokers and Licensees and consumers of real estate brokerage services D. The law was enacted to prevent detrimental misunderstandings and misinterpretations of the relationships by consumers, real estate brokers, and Licensees
A. The Illinois Real Estate Act was therefore amended to limit the number of individuals who could obtain a real estate license
A Licensee has a listing on a 20-acre parcel. A buyer who is willing to pay a finder's fee for the 20- acre parcel contacts the Licensee. The Licensee arranges a meeting between the buyer and the seller and explains to each that the Licensee is receiving compensation from both parties. The Licensee also asks each party to sign a written disclosure and give written permission before he begins to represent the buyer. This is proper because: A. The Licensee is disclosing to both parties of the transaction that he is acting as a dual agent and receiving compensation from both B. The 20-acre parcel is his listing C. It was mentioned orally to his employing broker D. The Licensee is operating as an "independent contractor"
A. The Licensee is disclosing to both parties of the transaction that he is acting as a dual agent and receiving compensation from both
Which of the following statements is true about a branch office manager? A. The branch office manager is responsible for all Licensees at that branch; B. If the branch office manager is an officer of the corporation; he does not have any responsibilities over the Licensees C. If the branch office manager resigns, the most senior Licensee can manage the branch office on an interim basis D. The branch manager may be an experienced Licensee
A. The branch office manager is responsible for all Licensees at that branch;
Real estate taxes are based on: A. The dollar and cents per $1,000 of the equalized assessed value B. Dollars and cents per $1.00 of assessed value C. The recent sales of comparable properties D. A percentage of the market value of the property as established by the assessor
A. The dollar and cents per $1,000 of the equalized assessed value
The responsibility for the activities of an employed "unlicensed assistant" rests with the: A. The employing Licensee B. Board of Realtors C. IDFPR D. The employing licensee's broker
A. The employing Licensee
A buyer and seller enter into a purchase contract, but the improvements burn down before the closing. Who is responsible for the loss? A. The seller B. The buyer C. The broker D. The Licensee
A. The seller
A licensee must disclose in writing to a customer when the Licensee is not acting as the customer's agent A. This must be done in time to prevent the customer from disclosing confidential information to the licensee B. The written disclosure may be made after the preparation of an offer to purchase or lease real property C. The law does not apply to a residential lease or rental transaction if it includes an option to purchase the real estate D. The disclosure is usually done at the time the transaction closes
A. This must be done in time to prevent the customer from disclosing confidential information to the licensee
Broker Roberts has received an exclusive right-to-sell listing from seller Thomas in which seller Thomas promises to pay the broker a 15% commission for selling the property. Under these conditions, such a commission is considered to be: A. Valid B. In violation of the Illinois Usury Law, and the Illinois License Act of 2000, C. A violation of the National Realtor's Code of Ethics, D. In violation of the Law of Agency as it applies to Illinois
A. Valid There is no set limit on a commission as long as the commission amount is agreed to between the broker and the principal.
Written listing agreements that do not provide for automatic expiration within a definite period of time are considered to be: A. Void B. Subject to termination upon notice by the seller to the listing broker, C. Commonly used by real estate brokers in Illinois, D. None of the above.
A. Void All written listing contracts must provide for an automatic expiration date within a definite period of time or the listing contract is void.
Broker Harry listed a piece of property for a friend. The property was difficult to market because of an unusually high sales price demanded by the seller. Therefore, the listing contract was written up with no expiration date. This listing contract is: A. Void B. Voidable C. Properly completed D. Enforceable in court
A. Void Any listing not providing a definite termination date is void.
The Illinois (state and county) transfer tax is based upon: A. $.25 per $500 of purchase price; B. $.75 per $500 of purchase price; C. $1.00 per $500 of the purchase price; D. None of the above.
B. $.75 per $500 of purchase price; (B) The Illinois (state) transfer tax is based on $.50 per $500 of the purchase price. The Illinois transfer tax at the county level is based on $.25 per $500. When the two taxes are combined, they result in a figure of $.75 PER EACH $500 or portion of $500.
The Illinois (state) transfer tax on a real property sale of $250,000 with a $25,000 assumable loan is: A. $337.50 B. $225.00 C. $250.00 D. $375.00
B. $225.00 Step I: $250,000 - Units $25,000 Assumed Loan = $225,000 New Money Step 2: Purchase price $225,000/500 = 450 Step 3 : Amount 450 x $.50 = $225.00 Transfer Tax
A landowner who is the sole owner of a piece of property dies without a will. His property will be disposed of: A. According to the grandfather clause B. According to the laws of descent and distribution C. According to the inheritance tax laws D. According to the laws of testate succession
B. According to the laws of descent and distribution p173 In Illinois, when the owner of real estate dies, how title to the property was held (rather than the laws of descent and distribution or the presence of a will) may dictate who the new owners will be:
Real estate licensees are permitted to employ: A. A "gopher" to perform the more mundane tasks in a real estate transaction B. An "unlicensed assistant" to-perform certain limited activities relating to a real estate transaction C. A "personal representative" to handle all matters which the licensee elects to delegate to the employee D. An "assistant Licensee" who after serving a two year apprenticeship may qualify for a real estate license without taking any formal real estate course or the state examination
B. An "unlicensed assistant" to-perform certain limited activities relating to a real estate transaction
Any unlicensed person who performs a real estate act that requires a license may be prevented from doing so by IDFPR filing a(n): A. Civil lawsuit B. An injunction called a "cease and desist order" C. Bankruptcy report D. None of the above
B. An injunction called a "cease and desist order" If an unlicensed person continues to perform real estate activities without a real estate license, the state is empowered to pursue legal action.
If a parcel of property is forfeited or sold because of unpaid taxes, that property could be acquired by submitting a bid under a (n): A. Reclamation sale B. Assessor's sale C. Repossession Sale D. Redemption sale
B. Assessor's sale
A contractor performed work on a piece of property and has a signed contract. What is the length of time that he has to file a mechanic's lien notice with the county clerk? A. Four months from the date the contract was first signed B. Four months from the date the work was completed C. One year from the date the work was completed D. One year from the date the contract was signed
B. Four months from the date the work was completed
If a seller has an open listing contract with a broker, and the broker immediately erects a "for sale" sign on the seller's property without the seller's permission: A. He is in violation of a state statute of the State of Illinois B. He is in violation of the Real Estate License Act of 2000 C. He is not in violation because it is an open listing D. It is not a violation because he is duly licensed by the State of Illinois as a broke
B. He is in violation of the Real Estate License Act of 2000
A "blind ad" placed by a real estate licensee is considered to be: A. Illegal unless authorized by the seller B. Illegal C. Permissible, provided the licensee's name and address are included in the advertisement D. One that adequately describes the property with the name and phone number of the listing broker, without disclosing the address of the property
B. Illegal A "blind ad" is any ad in which the property appears to be owned by a licensee without disclosing that the property is in fact listed by a broker who is not the owner. Such an ad is illegal. All advertising must include the company name of the broker.
Licensees must fully disclose any interest they may have in a property, which must be made: A. Orally B. In writing C. Through their sponsoring broker D. Through an attorney
B. In writing Real estate licensees must fully disclose any interest they may have in a property they are involved in selling, leasing, buying, etc. The disclosure must be made in writing.
A closing statement is for the purpose of: A. Transferring ownership B. Making a full accounting of all the moneys involved in the transaction C. Delivery of the deed D. None of the above
B. Making a full accounting of all the moneys involved in the transaction
The agency law defines a "customer" as a person who is: A. Represented by a licensee B. Not being represented by a licensee but for whom the licensee is performing ministerial acts C. Named by a broker as the legal agent of a client D. A public source of real estate information
B. Not being represented by a licensee but for whom the licensee is performing ministerial acts
A co-owner can seek division of a property ownership through action by: A. Participation B. Partition C. Severance D. Joint tenancy
B. Partition Suit for partition is the way to legally dissolve ownership between co-owners. p45 Partition is a legal way to dissolve the relationship when the parties do not voluntarily agree to its termination.
A real estate broker would be required to have more than an ordinary knowledge of accounting procedures in which of the following businesses? A. Selling real property securities B. Property management C. The appraisal of real estate D. Selling residential rental properties,
B. Property management Due to the complexity of Internal Revenue Service rules and regulations, and the resultant tax consequences for income property, a property manager would be required to have more than a passing knowledge of accounting procedures.
A farmer has 180 acres of land with three houses on it. The farmer is planning to retire and wants to give one house and 15 acres to his son John, and 4 acres and one house to his son Paul, and keep 161 acres and a house for himself. Which of the following would come under the jurisdiction of the Illinois Plat Act? A. Son John's house and the 15 acres B. Son Paul's house and the 4 acres C. The farmer's house and the 161 acres D. None of the above because it was a division of land within the family
B. Son Paul's house and the 4 acres (B) When dividing acreage, if the resulting parcel were less than 5 acres, such parcel would come under the jurisdiction of the Illinois Plat Act. p72 Under the Illinois Plat Act, when an owner divides a parcel of land into two or more parts, any of which is less than five acres, the parts must be surveyed and a plat of subdivision recorded.
Jane Mills is moving to Indiana. She needs to sell her home in Illinois. She hires Suzy Smith, a licensed real estate broker, to sell her home. After Suzy has been hired, Suzy finds out that the neighborhood where Jane Mills' property is located is being rezoned commercial. Suzy decides to purchase an option on Jane's home but fails to disclose to Jane that her neighborhood is being rezoned commercial. Suzy decides to exercise her option. Suzy then resells the property to an investor for twice the price she paid to Jane. According to Illinois law, such conduct would be permissible provided that: A. Suzy gave a cash deposit to the seller B. Suzy discloses to Jane that her area is being rezoned commercial and that Suzy would make a profit once she exercises her option C. The real estate contract is in writing and properly signed by all parties D. Suzy holds the earnest money
B. Suzy discloses to Jane that her area is being rezoned commercial and that Suzy would make a profit once she exercises her option (B) Under Illinois law, it is permissible for a broker to obtain an option on property, which the broker has listed, and exercise that option provided that the broker's profit is revealed to the seller and the broker has obtained written consent prior to exercising the option.
Mary Smith, who is the wife of John Smith, is the beneficiary of property held in trust by the Illinois Land Trust. If this property is conveyed to Helen and George Jones, which of the following must occur? A. The trustee's deed must be signed by Mary Smith B. The trustee's deed must be signed by the trustee C. A warranty deed must be signed by Mary Smith D. A warranty deed must be signed by Mary Smith and her husband John Smith
B. The trustee's deed must be signed by the trustee (B) The legal title to the property is invested in the trustee, whereas, the beneficial interest of the trust accrues to the beneficiary.
In Illinois, the broker's escrow account must be reconciled within how many days after receipt of the bank statement? A. 2 days B. 5 days C. 10 days D. 20 days
C. 10 days
Which of the following licensees would be required to complete 120 classroom hours at an approved real estate school? A. A high school graduate with 90 hours of college course work wanting to become a licensed Licensee B. A licensee that renewed their real estate license one year past their expiration date C. A broker who has an expired real estate license in excess of two years D. An attorney who is licensed or approved by the Illinois State Supreme Court to practice in the State of Illinois
C. A broker who has an expired real estate license in excess of two years A real estate broker who has allowed their real estate license to expire for more than two years must start at the beginning; 120 hours of pre-license education and pass the state exam.
Under the Agency - Brokerage Relationships Law, a "client may be defined as: A. Any person who walks into a real estate office in Illinois B. Person who view homes on their own at any 'open house" showing C. A person who is represented by a licensee D. Any person who is employed by an Illinois real estate broker to assist the broker in providing real estate services to others for compensation
C. A person who is represented by a licensee
Sponsoring Broker Matthews expanded his operation and opened a branch office. Broker Matthews must now: A. Do nothing, since he is already a licensed broker B. Apply for a branch office license in the name of the main office C. Apply for a branch office license in the name of the main office and designate a managing broker D. Make a copy of the broker's license and place it in the branch office next to the license of the managing broker
C. Apply for a branch office license in the name of the main office and designate a managing broker (C) When a broker opens a branch office, a separate branch office license must be obtained and the license must be in the name of the main office. It must also indicate the name of the managing broker who will manage the branch office.
In Illinois, probably the greatest single cause for license suspension or revocation is commingling of funds. Of the following, all are considered to be commingling except: A. Depositing earnest money received from the buyer in the broker's personal checking account to be held there until requested by the seller B. Placing cash received by the broker from the buyer in the broker's safety deposit box and clearly identifying the money as the buyer's deposit C. Being authorized by the seller to hold an earnest money check in an uncashed form after the offer has been accepted D. None of the above
C. Being authorized by the seller to hold an earnest money check in an uncashed form after the offer has been accepted The broker may hold an uncashed earnest money check after the offer has been accepted, provided the broker has authority from the seller
A property manager could perform all of the following functions except: A. Order property insurance B. Set the rental rates C. Complete the building owner's personal income taxes D. Sell residential rental properties
C. Complete the building owner's personal income taxes
The "equalization factor" used in Illinois in computing real estate taxes is designed primarily to: A. Equalize urban and rural taxes B. Compensate for differences in tax rates among various taxing bodies C. Counteract discrepancies in assessments in different localities D. Reduce real estate taxes for senior citizens.
C. Counteract discrepancies in assessments in different localities p171 The financing data helps the Department of Revenue accurately determine equalization factors between different counties and eliminate inconsistencies caused by the use of nonconventional or creative financing.
Concerning real estate mortgages, the lien theory applied in Illinois is considered to be: A. Mortgage theory B. Title theory C. Intermediate theory D. Lien theory
C. Intermediate theory Illinois subscribes to an intermediate theory. The borrower remains the legal owner of the property against all parties except the lender.
Mr. Rogers is planning to move to New Mexico. His neighbor, Ms. Young, has had some real estate experience but has not renewed her real estate license. Mr. Rogers tells Ms. Young that he will give $5,000 to anyone who sells his house for him. Ms. Young finds a buyer and the deal is consummated. Mr. Rogers then decides that he is not going to pay the commission, so Ms. Young decides to sue for her commission. Can she do this? A. Yes, because she had an oral agreement with the seller B. Yes, because she did perform a service for which she was entitled to a commission C. No, because she is not licensed under the Illinois Real Estate Licensing Act of 2000 D. No, because the agreement was not in writing
C. No, because she is not licensed under the Illinois Real Estate Licensing Act of 2000
A real estate Licensee has a listing on a vacant farmhouse and barn. A Licensee from another company has a prospect that wants to rent only the house. The prospect does not want to buy the property nor the barn, just rent the house. The Licensee from another company who has the renter prospect goes directly to the owner of the property is this proper? A. Yes, because the prospect is only interested in renting B. Yes, because the Licensees may be able to convince the homeowner to rent the house rather than the sell the house C. No, because the property is listed with a broker and the Licensee from another company cannot negotiate anything with the seller who is being represented by a broker without the presence and/or permission of the listing broker D. No, because it was an offer to rent, not an offer to purchase
C. No, because the property is listed with a broker and the Licensee from another company cannot negotiate anything with the seller who is being represented by a broker without the presence and/or permission of the listing broker
A real estate broker may lawfully collect a commission from both the buyer and seller, provided the broker has: A. Persuaded both the buyer and seller to sign a sales contract, B. Obtained an exclusive listing agreement signed by just the seller, C. Obtained prior written disclosure and written consent from both buyer and seller, D. Notified both the buyer and seller of this fact after the sale has closed.
C. Obtained prior written disclosure and written consent from both buyer and seller,
Concerning government owned property, which of the following statements is most correct? A. Only government property can be acquired by adverse possession B. Any property may be acquired by adverse possession C. Only privately owned real property can be acquired by adverse possession D. None of the above
C. Only privately owned real property can be acquired by adverse possession Adverse possession, sometimes referred to as squatter's rights, is another means of involuntary transfer. An individual who makes a claim to certain property, takes possession of it, and uses it may take title away from an owner who fails to use or inspect the property for a period of years.
A broker who offers a guaranteed purchase plan must: A. Explain the plan orally to the seller B. Provide the seller with a list of lenders who would finance the sale C. Provide the seller with a written proposal, including the broker's financial resources; D. Supply the seller only with a current financial statement.
C. Provide the seller with a written proposal, including the broker's financial resources;
Sponsoring Broker West has an exclusive right-to-sell listing agreement on Beck's property. Under which of the following conditions could Broker West sign a valid sales contract for principal Beck? A. Under no circumstances, since this would be a violation of the "Statute of Fraud's" B. Under the Law of Agency, when a broker has an exclusive right-to-sell listing agreement, the broker may do any act for the benefit of the principal C. Provided the broker has a written power of attorney from principal Beck D. Under no circumstances, since this would be a violation of the Illinois Broker-Attorney Accord.
C. Provided the broker has a written power of attorney from principal Beck p222 The principal makes all contractually related decisions and will sign on her own. A special power of attorney is another legal means of authorizing an agent to carry out only a specified act or acts.
Who is not required to have a real estate license? A. Part-time Licensee B. Broker manager C. Real estate appraiser D. None of the above
C. Real estate appraiser
Who must provide written consent prior to a broker advertising a property for sale? A. Buyer B. Listing broker C. Seller D. Commissioner
C. Seller
Once a broker has terminated a Licensee's license: A. The broker must send the original license to the Illinois Department of Financial and Professional Regulations within 24 hours of termination B. The broker must send a copy the Licensee's license to the Illinois Department of Financial and Professional Regulations within 24 hours of termination C. The broker must send a copy the Licensee's license to the Illinois Department of Financial and Professional Regulations within 2 days after termination D. The broker must send the original license to the Office of Banks and Real Estate within 2 days of termination
C. The broker must send a copy the Licensee's license to the Illinois Department of Financial and Professional Regulations within 2 days after termination
A licensee sells a building. It is later discovered by the buyer that the building was poorly constructed, and had numerous flaws. If the buyer files a claim with the Illinois Real Estate Recovery Fund: A. The buyer can recover all moneys back from the Recovery Fund B. The buyer can only collect up to $10,000 from the Recovery Fund C. The buyer can only use the Recovery Fund if the buyer has exhausted all other avenues for recovering the money D. The Recovery Fund will pay the buyer the amount of loss, up to the maximum of $50,000
C. The buyer can only use the Recovery Fund if the buyer has exhausted all other avenues for recovering the money
Who pays the Licensee their commission? A. The seller B. The buyer C. The sponsoring broker D. A cooperative broker
C. The sponsoring broker
A broker put his own property on the market, and is advertising that property for sale by owner. On the yard sign he only includes the statement "agent owned". He does not indicate who his sponsoring broker is. Is this proper? A. No, it is against the disclosure regulations of IDFPR B. No, because it is a blind ad and all blind ads are illegal C. Yes, because Illinois licensees are allowed to advertise their property "by owner" so long as they do not use the brokerage services of any broker and they disclose "agent owned property" D. Yes, because he possesses a real estate license
C. Yes, because Illinois licensees are allowed to advertise their property "by owner" so long as they do not use the brokerage services of any broker and they disclose "agent owned property"
The sales price of a parcel of property is $150,000. The sales commission is 6% of the sales price. If the commission were split 50/50 between the broker and the Licensee, less a 10% commission to the listing broker in another office, what would be the amount of commission payable to the licensee? A. $9,000 B. $4,500 C. $900 D. $4,050
D. $4,050
Concerning Licensee licensing fees, all of the following are true, except : A. $110 processing fee B. $150 bi-annual renewal fee C. $10 Recovery Fund Fee D. $40 processing fee
D. $40 processing fee In Illinois, the Licensee license fee does involve a $150 bi-annual renewal fee; a $10 Recovery Fund fee; and a $110 processing fee. It is not true that the processing fee is $40.
A real estate transaction closed on January 31. On the closing statement, the buyer will be credited with: A. 1 month of tax payments B. 11 months of tax payments C. 12 months of tax payments D. 13 months of tax payments
D. 13 months of tax payments In a real estate transaction that closes on January 31st of a given year, the closing statement would reflect that the buyer is to be credited with 13 month's taxes. In Illinois, taxes are paid in arrears, so it would equal 12 months of taxes from the previous year and 1 month of taxes from the present year. p85 General real estate taxes are levied annually for the calendar year and become a prior first lien, superior to all other liens, on January 1 of that tax year. However, they are not due and payable until the following year. In other words, Real Estate Taxes in Illinois are paid in arrears.
The Illinois Department of Financial and Professional Regulations (IDFPR) have the power to hold hearings, to impose penalties, and to revoke and suspend licenses for which of the following circumstances? A. Advertising a piece of property using a blind ad B. Commingling funds C. Acting as an attorney while at the same time acting as a broker for both buyer and seller without written consent D. All of the above
D. All of the above
Concerning all exclusive right-to-sell listing agreements and all exclusive agency listing agreements, which of the following, in Illinois, is most correct? A. No change in the amount of the commission or the time of payment shall be valid unless made in writing and signed by the involved parties B. The agreed amount of basis of the commission must be included C. The time of payment of the commission must be included D. All of the above are correct
D. All of the above are correct In Illinois, in any exclusive right-to-sell listing agreement or exclusive agency agreement, the amount or basis of the commission, and the time of payment of the commission must be included and no changes in the amount or method of payment shall be valid unless such change is in writing and signed by all of the parties.
Broker Able listed a home that he knew was situated on a landfill site and where area homes have been sinking due to the lack of a solid foundation. Broker Able did not reveal this information to a prospective buyer. Given this information, the licensee in this situation could be subjected to: A. Criminal action B. Civil action C. Disciplinary action D. Any of the above
D. Any of the above (D) If a licensee fails to reveal pertinent information, the licensee could be subjected to civil action, criminal action, and/or disciplinary action for the one (1) violation.
Regardless of interest or non-interest bearing accounts, earnest money deposits must be placed into: A. Money market funds B. Mutual funds C. Federally chartered banks D. Banks or federally insured deposits
D. Banks or federally insured deposits (D) Earnest money deposits placed into interest or non-interest bearing accounts must be placed into federally insured depositories.
The Director of the Real Estate Division must meet which of the following requirements: A. Be a licensed Illinois real estate broker B. Be a resident of Illinois C. Reside in Springfield D. Both a and b
D. Both a and b (D) It is required that the Director of the Real Estate Division be actively engaged as a broker for 10 years prior to appointment and be a resident of Illinois.
Which of the following types of listing agreements must be in writing to be enforceable? A. Exclusive agency listing agreements only B. Exclusive Right-to-Sell listing agreements only C. All listing agreements D. Both a and b
D. Both a and b All exclusive agency listing contracts and exclusive right-to-sell listing Contracts must be in writing, in Illinois, to be enforceable.
What is the difference between a sponsor card and a pocket card? A. A sponsor card is issued once a licensee is newly sponsored by a broker and the pocket card is issued once the license has been received B. A pocket card is issued once a licensee is newly sponsored by a broker and the sponsor card is issued once the license has been received C. A pocket card is the 45 day permit that goes in your pocket D. A sponsor card is the copy of the license that indicates who your sponsoring broker is
(A) A sponsor card, (a 45 day temporary work permit), is issued before a real estate license/pocket card.
Ms. Mars has two rooms in her home that she wishes to rent to women only. Under the Illinois Human Rights Act, may she do so? A. Yes, if she owns the property and she is not a real estate broker B. No, because this action is considered unlawful under the Illinois Human Rights Act C. Yes, but only if the rent is less than $200 per month per tenant D. None of the above
(A) Under the Illinois Human Rights Act, an owner-occupant may rent to a particular sex, provided the owner does in fact own the property, is not a real estate licensee, AND one of the units is owner-occupied.
