IL Brokers Exam Practice
Renee, an Illinois licensee, applies to the Illinois Real Estate Recovery Fund to seek damages for a judgment the courts awarded her for another licensee's slander. What's the maximum amount she can recover? A) $0 B) $25,000 C) $50,000 D) $75,000
A) $0 The Illinois Real Estate Recovery Fund may help consumers recover damages as a result of a judgment based on a real estate transaction; Renee's claim and judgment aren't covered.
Broker Betty will be representing both the buyer and the seller in a transaction. The Disclosure and Consent to Dual Agency is included in her brokerage agreements. How will the seller indicate consent to dual agency? A) By initialing the section of the brokerage agreement that indicates consent to dual agency B) By shaking hands with the buyer in Betty's presence C) By signing a new brokerage agreement specific to dual agency situations D) Through an oral agreement with Betty and the buyer
A) By initialing the section of the brokerage agreement that indicates consent to dual agency When the Disclosure and Consent to Dual Agency is included in the brokerage agreement, the client agrees to dual agency by initialing the section of the contract indicating consent to dual agency.
An investor receives title to a property, but she never makes mortgage payments and rents out the home until foreclosure occurs. What type of mortgage fraud does this describe? A) Equity skimming B) False identity C) Property flipping D) Straw buyers
A) Equity skimming These actions are associated with the mortgage fraud scheme known as equity skimming. Often, a straw buyer is used in the transaction.
Your buyer client wants to make an offer on a house that meets all of his needs, but the list price is a bit outside of his budget. When discussing the offer with the seller's agent, you ask about the seller's goals. This is a good example of _____. A) Creating options for mutual gain B) Focusing on interests, not positions C) Insisting on using objective criteria D) Separating the people from the problem
B) Focusing on interests, not positions This example illustrates the principle of focusing on interests, not positions. By learning more about the seller's goals, you may understand how to structure an offer that satisfies the seller's interests even if it's not a full-price offer.
Neal, the designated managing broker for At Your Service Brokerage Services, requires his licensees to work set hours and work from the brokerage firm's office. Which of the following statements is true? A) The broker can implement specific performance requirements as long as they're outlined in the policies and procedures manual. B) The broker can make these activities a requirement if licensees are hired as employees instead of independent contractors. C) The broker can require independent contractor licensees to work from a specific location but can't require set work hours. D) The broker can't require specific performance of tasks such as these for any licensed individual.
B) The broker can make these activities a requirement if licensees are hired as employees instead of independent contractors. Designated managing brokers may only make requirements like these for employees, not independent contractors.
Violators of the Sherman Antitrust Act may be subject to fines. For what amount may corporations and individuals be liable? A) Up to $100,000 for corporations and $1,000 for individuals B) Up to $100 million for corporations and $1 million for individuals C) Up to $10 million for corporations and $1 million for individuals D) Up to $1 million for corporations and $100,000 for individuals
B) Up to $100 million for corporations and $1 million for individuals Fines may reach up to $100 million for corporations and $1 million for individuals.
Tawonda, a licensed Illinois broker, has been taken to court six times on various charges, including misrepresentation and breach of confidentiality. The court has awarded a judgment to each of the plaintiffs, but Tawonda has no money. Which of these statements about the plaintiffs' ability to receive compensation from the Illinois Real Estate Recovery Fund is true? A) Each of the plaintiffs can recover up to the maximum of $25,000 plus court costs and attorney's fees. B) The plaintiffs may only seek compensation from the fund if they can prove the exam amount of monetary damages that Tawonda caused. C) The recovery fund caps the amount that can be recovered against any one licensee based on a single transaction. D) These plaintiffs will all have to seek compensation through the civil court system.
C) The recovery fund caps the amount that can be recovered against any one licensee based on a single transaction. Because the recovery fund caps the amount of reimbursement for any one licensee in a single transaction, some plaintiffs may not receive reimbursement from the fund (or may not receive the full amount of their losses).
Which of these could a landlord use the tenant's security deposit to pay for? A) A warped kitchen cabinet B) Dirty curtains C) The removal of half of the bedroom carpet D) Water marks in a sink where the protective coating has worn away
C) The removal of half of the bedroom carpet Removing a large amount of carpet requires a major repair, which is paid for out of the security deposit.
Analise received earnest money from her clients after executing a contract between all parties. When must her managing broker deposit the earnest money? A) By the close of business of the second day following receipt B) Within five business days C) Within one business day after the contract is signed or per the contract terms C) Within one week
C) Within one business day after the contract is signed or per the contract terms The managing broker must deposit earnest money in an escrow account within one business day after the contract is signed or per the contract terms.
Which of these items will be either accrued or prepaid? A) Credit B) Debit C) Prepaid D) Prorated
D) Prorated Prorated items are either accrued or prepaid.
During an escrow money dispute in which no civil action has been filed, sponsoring brokers in Illinois retain the funds ______. A) And use them to pay the agents' commissions B) In an interest-bearing account C) Until they are directed by the courts to release them D) Until they receive written release and disbursement directions, signed by both parties or their agents
D) Until they receive written release and disbursement directions, signed by both parties or their agents Sponsoring brokers retain the funds until they receive written release and disbursement directions, which must be signed by both parties or their agents. Funds are disbursed accordingly no later than the next business day.
Contract clause that, if the property doesn't appraise at or above the sales price, the buyer is allowed to terminate Ex. If the appraised value is close to the sales price, often the parties can reach agreement. If not, and a(n) ________ is in place, the buyer can use the fact that the property didn't appraise to terminate and receive a refund of earnest money deposited.
appraisal contingency
When prorating expenses for a real estate transaction, this method uses the actual number of days in a year Ex. When determining amounts to prorate, the lender used a 365-day ________ to figure daily rates.
calendar year
Carlene sold her Illinois house to Todd for $492,500. She lives in a city that charges a $.10 transfer tax. How much transfer tax will be owed on this transaction? A) $344.75 B) $591.00 C) $837.25 D) $98.50
C) $837.25 The State of Illinois charges a $.50 transfer tax; each county charges $.25. With Carlene's city tax of $.10, the total transfer tax rate is $.85 per $500 of value. Divide the sales price by $500, then multiply by .85, for total transfer tax of $837.25.
Contract clause that allows the buyer to terminate if an issue arises during the inspection that can't be successfully negotiated Ex. If a repair issue arises that's more than the buyer is willing to take on, the ________ will allow the buyer to negotiate repairs, a sales price reduction, or terminate, receiving a refund of the earnest money. This must be accomplished during the inspection period.
inspection contingency
Services performed that are routine and do not involve judgment, advocacy, or negotiation Ex. Keira helped a buyer fill in some of the blanks in their contract offer for her seller's house, but did not advocate for or advise them in any way.
ministerial acts
A clause written into a sales contract that allows the buyer to cancel and receive back the buyer's deposit in the event that the buyer cannot obtain a loan commitment Ex. Perry's sales contract includes a(n) ________. Although he attempted to obtain a loan, his lender would not make a loan commitment. Because of the ________ clause, Perry can terminate and receive a refund of his deposit.
mortgage contingency
A listing agreement that allows the owner to work with multiple brokers, only paying a commission to the broker who procures the buyer Ex. Dwight entered into ________ agreements with five brokers, knowing he'd only pay commission to the one who brought him a buyer.
open listing
A buyer's ability to continue with a transaction is dependent on the buyer's current home selling first Ex. Sellers are often reluctant to accept contingent offers, and when they do, they usually reserve the right to continue to market and show the property to other buyers.
sales contingency
Assumes that all months in the year have 30 days; calculations are made based upon a 360-day year Ex. Lenders often use the ________ method in their calculations.
statutory proration
While working with an Illinois buyer client, Terry filled in the blanks on the purchase agreement, drafted an early-occupancy addendum, and assured his buyer that she was "fully protected" and would get her earnest money back if the sale didn't close. He encouraged her to hire an attorney to review the contract and addendum and invoiced her for a nominal $15 fee to prepare transaction documents. Which of these tasks would NOT be considered unauthorized practice of law? A) Charged a fee for preparing legal documents B) Drafted an addendum C) Filled in the contract blanks D) Interpreted contract provisions
C) Filled in the contract blanks Terry did just about everything wrong! The only two tasks he performed that aren't considered unauthorized practice of law are filling in the blanks on the purchase agreement and encouraging the buyer to seek legal advice.
Illinois licensee Will is working with seller client Jessica. Jessica is eager to get her home sold, so Will gets the details from her over the phone and lists it for her. The following week, Will meets with Jessica to sign the brokerage agreement, and he makes his required disclosures. Has Will met his disclosure requirements? A) No. Designated agency disclosures must be made before performing any agency activities, so Will should have made them before listing Jessica's home. B) No. Designated agency disclosures must be made before the licensee has any significant contact with the client, so the brokerage should have provided them to Jessica before Will had his first phone call with her. C) Yes. Designated agency disclosures can be made any time before closing, and he's made them with the execution of the brokerage agreement. D) Yes. Designated agency disclosures can be made in or along with the brokerage agreement, which he's accomplished.
A) No. Designated agency disclosures must be made before performing any agency activities, so Will should have made them before listing Jessica's home. Illinois designated agency disclosures must be provided to a prospective client before or upon entering into a designated agency relationship with a licensee, and before the licensee performs any agency activities.
In Illinois, beneficiary interest in land that's part of a land trust is considered ______. A) Personal property B) Protected from creditors C) Real property D) Subject to partition
A) Personal property When real property is conveyed to a trust, the trust becomes the owner. The owner who transferred the interest holds a beneficial interest in the property. This interest is considered personal property, though what the interest conveyed is real property.
Which of these accurately describes the Illinois Veteran's with Disabilities Exemption for Specially-Adapted Housing? A) Qualified veterans may deduct up to $100,000 of property taxes on their state income tax return. B) Up to $100,000 of the assessed property value for veterans with disabilities may be exempt. C) Up to $2,500 in property taxes may be exempt for qualifying veterans. D) Veterans are exempt from paying additional property taxes if adaptations to the property to accommodate a disability increase the property value.
A) Qualified veterans may deduct up to $100,000 of property taxes on their state income tax return. This exemption allows qualifying veterans to deduct up to $100,000 of their property's assessed valuation under certain circumstances.
In Illinois, what's the permitted homestead exemption for homestead land owned by one person? A) $10,000 B) $15,000 C) $20,000 D) $30,000
B) $15,000 When homestead land is owned by one person (estate in severalty), as much as $15,000 worth of the property value is exempt from.
Like Illinois brokers, managing brokers must complete four hours of core courses and eight hours of electives each renewal period. What is the other CE requirement for managing brokers? A) 12 additional hours of broker management B) 12 additional hours of supervisory skills C) Eight additional hours of fair housing and agency law D) Six additional hours of legal issues
A) 12 additional hours of broker management In addition to the CE requirements for brokers, managing brokers must complete 12 additional hours of broker management coursework.
Developer Constance Roberts subdivided a parcel of land into 25 five-acre lots and properly recorded the subdivision. Before she could build on the lots, she became ill and sold the entire subdivision to another developer, Accolade Homes, which plans to further subdivide into lots half the original size. Which of these statements is true? A) Accolade Homes can further divide the property without a new land survey and or subdivision plat if no new streets or access points will be required. B) Accolade Homes must develop the subdivision according to the previous subdivision plat. C) Because building hadn't begun at the time of the sale, Accolade Homes must complete a new subdivision process. D) The Illinois Plat Map Act requires Accolade Homes to add new streets and access points if they further subdivide the property.
A) Accolade Homes can further divide the property without a new land survey and or subdivision plat if no new streets or access points will be required. As long as Accolade's plans don't include addition of new streets or access points, it can further subdivide the parcel without a new survey or certification by the Illinois Registered Land Surveyors Association.
Kelsey is a Georgia licensee. She's moving to Illinois. What must she do to get her Illinois broker's license? A) Apply for reciprocal licensing and take the state portion of the Illinois licensing exam. B) Apply for reciprocal licensure and complete the national portion of the Illinois licensing exam. C) Provide proof of three years of broker activity within the past five years. D) Take the prelicensing coursework and pass the Illinois broker's license exam.
A) Apply for reciprocal licensing and take the state portion of the Illinois licensing exam. A broker's reciprocal license requires application to the state and successful completion of the state licensing exam.
In what circumstance do you have the authority to host an open house for another company's listing for compensation? A) Both brokerage firms consulted their attorneys and insurers and entered into a written agreement B) The listing agent authorized you to cooperate with her brokerage firm C) The listing brokerage has authorization from the seller. D) Under no circumstances do you have the authority to host an open house for another company's listing for compensation
A) Both brokerage firms consulted their attorneys and insurers and entered into a written agreement In Illinois, the only permissible way to host an open house for another company's listing for compensation is if both brokerage owners consulted their attorneys and insurers and entered into a written agreement.
Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison. A) Bracketing B) Competition C) Correlation D) Substituting
A) Bracketing Bracketing determines a probable range of property values by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison, such as age and transaction price.
Citywide Development is planning a new subdivision called Leydan Rock. Each lot will be two acres, and the entire subdivision will include 32 residential lots. Which of these statements about this subdivision and the Illinois Plat Map Act is FALSE? A) Citywide must get the subdivision plat commissioned and certified by the clerk and recorder of the county where the subdivision is located. B) Citywide must have the land surveyed. C) The Illinois Registered Land Surveyors Association must certify the plat map. D) The plat map is required because the lots are under five acres each.
A) Citywide must get the subdivision plat commissioned and certified by the clerk and recorder of the county where the subdivision is located. The Illinois Registered Land Surveyors Association is responsible for the commission and certification of subdivision plats.
Robert has met with prospective clients who say they want him to represent them in an exclusive buyer representation capacity. However, they are tired and want to leave and complete the form at home. What should Robert do? A) Complete what he can, and send it to them for their signatures that night. B) Fill out everything and sign their names for them. C) Insist they stay and complete the form there and then. D) Send it home with them.
A) Complete what he can, and send it to them for their signatures that night. It's best for the licensee to complete the form so the client doesn't fill in information that the licensee will later have to renegotiate.
Seller's agent Hank receives a call from buyer's agent Lydia, who describes the offer her client is willing to make. He knows his client will find the offer too low, so he asks Lydia if her buyer could make an all-cash offer. He knows his client would see this as enough of a benefit to consider the low offer. What is Hank doing in this example? A) Creating options for mutual gain B) Focusing on interests, not positions C) Insisting on using objective criteria D) Separating the people from the problem
A) Creating options for mutual gain Hank's suggestion would benefit both the buyer and the seller in this situation, so he's creating options for mutual gain.
Which of these is a quality that differentiates Illinois escrow accounts from other accounts? A) Distribution of funds from escrow accounts is restricted by law. B) Escrow accounts can't be interest-bearing accounts. C) Escrow accounts must be interest bearing. D) Funds in escrow accounts can be used for any purpose.
A) Distribution of funds from escrow accounts is restricted by law. Funds deposited in an escrow account belong to others (not the brokerage firm) and are designated for special purposes. State laws regulate distribution of funds from escrow accounts.
Grant owns a parking structure in Chicago. One of his renters, Millie, hasn't paid rent in three months. What are Grant's options? A) He can just lock Millie out. B) He is required to give 72 hours' notice before evicting. C) He must send an eviction letter to Millie by registered mail. D) He will have to take Millie to small claims court.
A) He can just lock Millie out. There are many benefits to owning a parking structure. One big one is that almost every transaction is simpler than owning a home. Keep this in mind when choosing a property to rent out.
Illinois licensee Sandra has provided her client Clint with a designated agency disclosure along with their brokerage agreement. Which of the following pieces of information is included in that disclosure? A) Sandra's full name and a statement that a designated agency relationship exists between the two of them B) Sandra's full name and license number C) Sandra's full name and the brokerage's policies on compensation and working with cooperating brokers D) Sandra's sponsoring broker's full name, and the brokerage's policies on compensation and working with cooperating brokers
A) Sandra's full name and a statement that a designated agency relationship exists between the two of them Illinois designated agency disclosures must contain a statement that a designated agency relationship exists between the agent and the client, and the name of the designated agent.
How will the buyer or seller know where and when the closing is being held? A) Their agents will inform them of the date once it's set. B) The lender will inform them according to MDIA rules and regulations. C) The seller will set the time and date and is responsible for notifying all parties. D) The title insurance company will inform them of a date once the title search is complete.
A) Their agents will inform them of the date once it's set. Agents are responsible for ensuring their clients know where and when the closing's being held.
Which of the following items must be included in the security instrument used for a real estate transaction? A) Borrower credit report B) Legal description of the property C) Lender disclosures D) Title insurance abstract
B) Legal description of the property The finance agreement must have certain elements such as a detailed statement of the loan and an accurate legal description of the property.
Which of the following statements is true about a deed in lieu of foreclosure? A) A lender may pursue a judicial foreclosure as well as a deed in lieu of foreclosure. B) A lender that accepts a deed in lieu of foreclosure can't pursue a deficiency judgment for the balance owed. C) The borrower owns the property after the foreclosure is complete. D) The borrower's assets may be seized if the lender pursues collecting the debt.
B) A lender that accepts a deed in lieu of foreclosure can't pursue a deficiency judgment for the balance owed. The property is returned to the lender and there's no additional judgment allowed against the borrower.
The best definition of a short sale is which of the following? A) A property available through HUD B) A property in which the seller is upside down C) A property that has been foreclosed on by a bank and is available for auction D) A property that is part of an urban renewal project
B) A property in which the seller is upside down A short sale is one in which the encumbrances outweigh the market value, and the seller is or will soon be in default.
Illinois licensee Alma is one busy woman: In addition to her regular broker duties, she also mentors three other licensees. The company owner has approached her about managing two additional office locations, but she'd need to take more coursework to be qualified to do that. What kind of broker is she? A) Associate broker B) Broker C) Managing broker D) Sponsoring broker
B) Broker Alma is a broker. She'd need to take additional coursework and become a designated managing broker to manage a brokerage office.
Regal, an out-of-state licensee who is friends with Cari, a licensee with Perfectly at Home, referred one of her buyer friends to Cari. Cari plans to pay Regal a referral fee. Which statement about this fee is true? A) Cari must pay the fee directly to Regal since Regal is an out-of-state licensee. B) Cari must pay the referral fee through her brokerage firm to Regal's brokerage firm. C) It's illegal for Cari to pay an out-of-state licensee a referral fee. D) Since Cari is paying (not receiving) the referral fee, there are no disclosure requirements.
B) Cari must pay the referral fee through her brokerage firm to Regal's brokerage firm. As long as the payment goes through both brokerage firms, it's legal to pay an out-of-state licensee a referral fee. Cari would only need to disclose the compensation if she were receiving the referral fee.
Christian's license has been expired for four years and two months. He has decided he wants to renew his license. Which of these statements is true? A) Christian must complete all pre-licensing coursework and retake the licensing exam. B) Christian must complete the CE requirements for the most recent pre-renewal period. C) Christian must complete the continuing education coursework that would have been required if he'd remained licensed. D) Christian must complete the state portion of the licensing exam.
B) Christian must complete the CE requirements for the most recent pre-renewal period. To reinstate a license that's been expired more than two years but less than five years, the licensee must apply to the IDFPR/DRE, complete the CE requirements for the most recent renewal period, and provide proof of fitness to have the license restored.
Which agency enforces federal fair housing laws? A) FHA B) FHEO C) NFHA D) NHA
B) FHEO The Office of Fair Housing and Equal Opportunity (FHEO) administers and enforces fair housing laws.
Which of these licensee's actions is most likely to warrant an immediate emergency license suspension in Illinois? A) Crispin failed to pay his property taxes. B) Gene hosted an open house while intoxicated and became belligerent toward the guests. C) Margo accepted compensation from someone other than her broker. D) Nikki failed to pay her state income taxes.
B) Gene hosted an open house while intoxicated and became belligerent toward the guests. Illinois law aims to protect the public's interest and welfare above all else, so if that's in danger, a license may be suspended temporarily as an emergency action.
Illinois licensee Albert is completing his designated agency disclosures to his client Patty. He's walked her through the written disclosures and must discuss with her the topics required by Illinois state law as part of those disclosures. What topics must Albert discuss? A) His brokerage's policy on funds handling and accounting B) His sponsoring broker's compensation and policy with regard to cooperating with brokers C) The different types of agency relationships that are available to Patty D) The fiduciary duties that he and his sponsoring broker will owe to Patty once the brokerage agreement is signed
B) His sponsoring broker's compensation and policy with regard to cooperating with brokers In addition to the written designated agency disclosure, Illinois licensees must also discuss with the client the sponsoring broker's compensation and policy with regard to cooperating with brokers who represent other parties in a transaction.
Johnathan has a wife, child, and both his parents are living. If he were to pass away without a will, how would his estate be divided? A) His child would get everything B) His spouse and children would split the estate 50/50 C) His spouse and parents would split the estate 50/50 D) His spouse would get everything
B) His spouse and children would split the estate 50/50 State intestate succession dictates that if both the spouse and the children are living, they would split the estate 50/50. The spouse only gets the entire if there are no surviving children.
When there's a dual agency agreement in place, and a licensee is working with a buyer client, which of the following questions should a licensee NOT answer, assuming she had all of this information? A) Has there ever been a mold problem in the house? B) How much should I offer? C) Is there a homeowners association for this subdivision? D) What year was the house built?
B) How much should I offer? In a dual agency relationship, licensees can provide specific property information and disclose known material facts, but they can't provide advice about how much to offer or how much a counter-offer should be.
Which of these statements about an Illinois guaranteed sales plan is TRUE? A) A guaranteed sales plan is a licensee's guarantee that a property will sell within a specified period of time, or the seller will owe no commission to the listing broker. B) Illinois statute requires that licensees who offer guaranteed sales plans must market properties impacted by these plans the same way they'd market any other property. C) Illinois statutes prohibit licensees from offering guaranteed sales plans. D) Licensees may purchase a property that's subject to a guaranteed sales plan at any time during the listing agreement's term.
B) Illinois statute requires that licensees who offer guaranteed sales plans must market properties impacted by these plans the same way they'd market any other property. Illinois statute permits licensees to offer guaranteed sales plans. Licensees must comply with the rules set out for these plans, including marketing the property the same way the licensee would market any other property.
Thebiggestbaddestcoolestsellerinthewindycity@Trustworthyagency.com is a bad email address because __________. A) Dot-com addresses cannot be used for real estate transactions. B) It's hard for someone to remember. C) It's too long for an email server. D) It won't fit on a flyer.
B) It's hard for someone to remember. Be careful using an email address that is hard to remember.
Which one of these statements about Illinois land trusts is true? A) A beneficiary's interest in the land must be conveyed through a deed. B) Land trusts generally continue for a specified term, such as 10, 20, or 30 years. C) The identity of the trust owner is made public. D) The person who establishes the trust (the trustor) is rarely the beneficiary.
B) Land trusts generally continue for a specified term, such as 10, 20, or 30 years. Land trusts generally continue for a specified term, such as 10, 20, or 30 years. At the end of the term, the trustee can extend the term or sell the land and provide the proceeds to the beneficiary.
Larry created an Illinois land trust agreement naming Renken Properties, Inc., as the trustee, and himself as the beneficiary. Which of these statements is NOT true? A) Larry retains complete control of the property during the trust's term. B) Larry's interest in the property is considered real property. C) Renken can make decisions regarding the property as long as it's held in trust. D) Renken can release Larry's name as the beneficiary if questioned.
B) Larry's interest in the property is considered real property. As the beneficiary, Larry retains full control of the property; his identity can't be made public (except under court order). His interest is considered personal property so it's more easily sold, pledged, or assigned than if it were real property.
Where will you find official documentation about the licensing of Illinois real estate professionals? A) Codes of conduct B) Laws and regulations C) Ordinances D) Zoning codes
B) Laws and regulations License laws are recorded as laws or as regulations. The Illinois Real Estate License Act of 2000 (as amended in 2018) provides the primary guidance for real estate licensees.
Which of these property management situations is NOT an exception to the federal Fair Housing Act? A) A private club may restrict the rental or sale of its property to members (as long as the property is not offered to the general public). B) Owners of buildings with two or more floors and units available on the ground-level floor can restrict those ground-level units to disabled tenants. C) Religious organizations that sponsor housing may restrict residency to members of that organization as long as the religion doesn't discriminate against protected classes when allowing membership in the organization. D) Senior housing facilities or communities may refuse to sell or rent properties to families with minor children or those younger than 55.
B) Owners of buildings with two or more floors and units available on the ground-level floor can restrict those ground-level units to disabled tenants. Exceptions may apply to senior housing, religious organizations, and private clubs.
Renda, an Illinois licensee, meets with Julie, who wants to buy a house. Julie has bought and sold many properties, and she wants Renda to help her just with contract forms and negotiations with the seller. What does Renda need to do? A) Provide Julie with a Disclosure and Consent to Dual Agency form. B) Provide Julie with a Non-Agency Disclosure and Consent form. C) Refuse to work with Julie unless she signs a representation agreement. D) Require that Julie sign an Indemnity and Disclosure form.
B) Provide Julie with a Non-Agency Disclosure and Consent form. Any time a consumer requests assistance from an Illinois licensee but chooses to not sign a representation agreement, the licensee must provide a Non-Agency Disclosure and Consent form for signatures.
Beverly holds an active New York broker's license. She's worked for a broker for several years, and her license is in good standing. Under Illinois reciprocity regulations, which of the following is correct? A) All she must do is submit $100 and a transfer application. B) She must complete all Illinois pre-licensing coursework and pass both portions of the licensing exam. C) She must complete only the state portion of the Illinois licensing exam. D) She's eligible for an Illinois broker's license.
B) She must complete all Illinois pre-licensing coursework and pass both portions of the licensing exam. Illinois doesn't have a reciprocity agreement with New York, so Beverly must complete the entire Illinois pre-licensing process.
The Illinois Housing Development Authority (IHDA) provides various homeownership and rental assistance programs. A) Immediately B) Within 15 days C) Within 30 days D) Within seven days
B) Within 15 days If there are changes to managing brokers, an office or a branch office, sponsoring broker should notify the division in writing within 15 days.
When must licensees in Illinois notify the Division of Real Estate of a name change? A) Within 15 days B) Within 24 hours C) Within 30 days D) Within seven days
B) Within 24 hours Licensees in Illinois must immediately (within 24 hours) notify the division of change to name, office location, or address.
Which of these describes a "blind ad" according to Illinois license law definition? A) An ad for a listing that doesn't include any photos B) An ad for a listing that doesn't include the designated managing broker's name C) A real estate ad that doesn't include the sponsoring broker's business name or that doesn't provide a direct link to a display page with required disclosures D) A real estate ad that isn't accessible by sight-impaired people
C) A real estate ad that doesn't include the sponsoring broker's business name or that doesn't provide a direct link to a display page with required disclosures Blind ads are prohibited, other than in certain exceptions as listed in the law.
When filing for funds from the Illinois Real Estate Recovery Fund, complainants must provide court documents, relevant transaction documents, and ______. A) A copy of the license of the broker who engaged in the violation B) A list of the names and contact information of all parties involved in the transaction C) An itemized statement of alleged losses D) The routing number for the bank account where the complainant would like the funds deposited
C) An itemized statement of alleged losses If no itemized statement is available, the claimant must state under oath that losses are estimated and the calculation is as accurate as circumstances permit.
Which of the one of these statements about transaction records retention in Illinois is true? A) All escrow and transaction records may be retained offsite or at the sponsoring broker's office. B) All escrow and transaction records must be retained at the sponsoring broker's office for five years. C) Escrow and transaction records related to active or pending transactions must be maintained at the sponsoring broker's office. D) Escrow records three years old and newer must be maintained at the sponsoring broker's office.
C) Escrow and transaction records related to active or pending transactions must be maintained at the sponsoring broker's office. In Illinois, escrow and transaction records related to active or pending transactions must be available for easy review at the sponsoring broker's office. Escrow records two years old and newer must be at the office location.
Marsha and Todd have discovered that the homestead status doesn't protect them from an action that's just occurred. Which of these is the likely culprit? A) Marsha and Todd aren't married, and homestead status applies only to married couples. B) The action is based on a judgment lien. C) The action is related to their mortgage loan. D) The action occurred after they filed for homestead status.
C) The action is related to their mortgage loan. Any kind of lien for which the property was pledged as collateral is exempt from the protection of the homestead law.
Which one of these statements about transaction records retention in Illinois is true? A) All escrow and transaction records may be retained offsite or at the sponsoring broker's office. B) All escrow and transaction records must be retained at the sponsoring broker's office for five years. C) Escrow and transaction records related to active or pending transactions must be maintained at the sponsoring broker's office. D) Escrow records three years old and newer must be maintained at the sponsoring broker's office.
C) Escrow and transaction records related to active or pending transactions must be maintained at the sponsoring broker's office. In Illinois, escrow and transaction records related to active or pending transactions must be available for easy review at the sponsoring broker's office. Escrow records two years old and newer must be at the office location.
Kirsten has several clients who've used Monica, a local mortgage broker, for their mortgage loans. Monica recently had an opportunity to return the favor, and she referred a buyer client to Kirsten. Through her broker, Kirsten sent Monica a $200 gift card as a referral fee. Which of these statements best represents this transaction? A) Because Monica holds a mortgage broker's license, Kirsten can pay her a referral fee. B) Because she paid the referral fee through her broker, Kirsten didn't violate any laws. C) Kirsten and her broker violated federal (and perhaps state) laws prohibiting referral fees to third-party vendors. D) Kirsten should have sent the referral fee directly to Monica to avoid violating RESPA.
C) Kirsten and her broker violated federal (and perhaps state) laws prohibiting referral fees to third-party vendors. While Kirsten was correct in thinking that all compensation paid or received has to go through her broker, both Kirsten and broker broke the law by providing a referral fee to a mortgage broker. They violated RESPA and likely state licensing laws.
Which of the following licensees are allowed to work independently in Illinois without being sponsored? A) Associate brokers B) Brokers C) Managing brokers D) Residential leasing agents
C) Managing brokers Only a managing broker operating as sole proprietorship can practice real estate independently in Illinois.
Which of these conversations would be considered substantive contact and thus require that Jen, an Illinois broker, provide an agency disclosure? A) Jen is talking with her coffee club about a recent surge in Illinois home prices. B) Jessie attends one of Jen's open houses and asks how old the property's major systems are. C) Martine tells Jen about her financial situation and asks how much she'd be able to sell her house for. D) Melvin talks with Jen at an open house about his current job and asks what it's like to be a licensed agent.
C) Martine tells Jen about her financial situation and asks how much she'd be able to sell her house for. Substantive contact occurs any time a consumer shares confidential information or requests buyer or seller representation.
A hurricane destroyed Stu's brokerage, including all of his records. In addition to immediately obtaining copies of and reconstructing the missing records, what is he required to do in this case? A) Do nothing. B) Notify all clients whose records are affected within 30 days by signature-restricted delivery. C) Notify the IDFPR enforcement division within 30 days by signature-restricted delivery. D) Wait for instructions from his insurance company.
C) Notify the IDFPR enforcement division within 30 days by signature-restricted delivery. If escrow records are lost, destroyed, or stolen, a managing broker must notify the IDFPR enforcement division within 30 days by signature-restricted delivery.
The ______ provides administration and enforcement of federal fair housing laws. A) Federal Housing Administration B) Housing and Urban Development Department (HUD) C) Office of Fair Housing and Equal Opportunity (FHEO) D) The Federal Housing Finance Agency (FHFA)
C) Office of Fair Housing and Equal Opportunity (FHEO) The Office of Fair Housing and Equal Opportunity (FHEO) enforces federal laws and establishes policies to ensure that all Americans have equal access to housing.
How long does a licensee relocating to Illinois have to complete all the reciprocity requirements? A) 30 days B) Five years C) One year D) Six months
C) One year A licensee has one year to complete all the requirements for reciprocity when relocating to Illinois. This includes paying the fee, submitting the application and sponsor card, providing proof of a held license in another state, and earning a passing grade on the exam covering Illinois brokerage laws.
At what point in a residential transaction must a seller's agent deliver a completed Residential Real Property Disclosure Report to a buyer? A) At least five days prior to closing B) Prior to showing the property to the prospective buyer C) Prior to the parties signing a purchase agreement D) Within three days after the parties sign a purchase agreement
C) Prior to the parties signing a purchase agreement A disclosure report must be provided to a prospective buyer before the parties sign a purchase agreement. If it's not provided in the proper timeframe, the buyer is allowed to cancel the contract prior to closing.
Bart and Claire are under contract for Claire to buy Bart's house, but her financing fell through. They decide to cancel the contract just as if it never happened. Which termination method does this describe? A) Reformation B) Release C) Rescission D) Restraint
C) Rescission A rescission is a definitive end of the parties' commitments under an agreement—one in which the parties are returned to their pre-contract status.
Several situations are exempt from the provisions of the Illinois Land Sales Registration Act. Which situation is not exempt? A) Land sold for commercial or industrial use B) Sales subdivided into 25 or fewer lots C) Sales subdivided into 25 or more lots D) Single home sales
C) Sales subdivided into 25 or more lots The sale of single homes, land sold for commercial or industrial use, or the sale of 25 or fewer lots are exempt from the Illinois Land Sales Registration Act. Sales subdivided into 25 or more lots are not exempt.
Which of these statements about Illinois transfer tax rates is true? A) Municipality transfer tax rates are often lower than those charged by counties and the state. B) Only the state can charge transfer taxes. C) State and county tax rates are often lower than the rates municipalities charge. D) The transfer tax rate charged by the state and various cities and counties is the same.
C) State and county tax rates are often lower than the rates municipalities charge. Municipality transfer tax rates should be carefully examined because their tax rates can be significantly higher than rates imposed by the state or county.
Carissa is an Illinois broker. Her managing broker, Thomas, is also the firm's sponsoring broker. The staff includes one licensed residential leasing agent, Reuben. Which of these statements about license renewals is true? A) Carissa's license expires on June 31 of each even-numbered year. B) Reuben's license expires on July 31 of each odd-numbered year. C) The firm's license expires on October 31 of each even-numbered year. D) Thomas's license expires on April 30 of each even-numbered year.
C) The firm's license expires on October 31 of each even-numbered year. All Illinois licenses except managing broker's licenses expire in even-numbered years; brokers renew on April 30, residential leasing agents on July 31, and firms on October 31. Managing brokers must renew on April 30 of each odd-numbered year.
Lakeshore Homes has received notice that its sponsoring broker license is being suspended. Which of these statements best describes the impact of this suspension? A) The firm is permitted to operate for 30 days without a licensed sponsoring broker. B) The firm's licensees can continue to operate as usual until a new sponsoring broker is in place. C) The firm's licensees may not perform real estate brokerage services until a new sponsoring broker is in place. D) The managing broker can temporarily serve as the sponsoring broker.
C) The firm's licensees may not perform real estate brokerage services until a new sponsoring broker is in place. Illinois brokerage firms cannot operate without a sponsoring broker in place. Lakeshore Homes affiliated licensees are inoperative until the sponsoring broker's license is restored or the licensees get another sponsor.
Roger, an Illinois broker working for Metro Homes, lists a property for seller clients Trina and Samuel. Roger's sponsoring broker is Ted Britton and his managing broker is Sonjay Treva. Which of these statements about the relationship is true? A) Roger's managing broker will designate him as Trina and Samuel's agent. B) The listing agreement is between Sanjay, Trina, and Samuel. C) The listing agreement is between Trina, Samuel, and Metros Homes. D) The listing agreement is between Trina, Samuel, and Roger.
C) The listing agreement is between Trina, Samuel, and Metros Homes. Buyer or seller agency agreements are agreements between the clients and the sponsoring broker, not the listing or selling broker.
Wesley is selling his three-bedroom home. His agent, Marty, has advised him of his obligation to complete the Residential Real Property Disclosure Report. Which of these statements is true about the disclosures that Wesley makes about the property? A) If Wesley learns of any material defects after submitting the disclosure report to the buyer, he's not obligated to tell the buyer of them. B) Wesley can ask Marty to complete the disclosure report on Wesley's behalf. C) Wesley is only responsible for disclosing material defects of which he's aware. D) Wesley must use a licensed home inspector to identify all material defects in his home before completing the report.
C) Wesley is only responsible for disclosing material defects of which he's aware. Wesley is obligated to disclose all material defects of which he's aware, but he's not required to perform any investigation or inspection to find issues that he doesn't already know about.
In Illinois, when two or more parties own the land, what's the permitted homestead exemption for their property? A) $10,000 B) $15,000 C) $20,000 D) $30,000
D) $30,000 When two or more parties own the land, as much as $30,000 of the property value is exempt from liens.
The State of Illinois placed a lien on Margo's property that must be resolved upon Margo's death or when Margo's property no longer meets certain criteria. What type of lien is this? A) A homestead lien B) A mortgage lien C) A property tax extension lien D) A senior citizens tax deferral program lien
D) A senior citizens tax deferral program lien Margo used the Illinois Senior Citizens Tax Deferral Program. Deferrals become payable on the homeowner's death or when the property no longer qualifies.
Ivan qualifies for and takes advantage of the Illinois Senior Citizens Assessment Freeze Homestead Exemption. Which of these is true? A) Ivan isn't permitted to make any improvements to his property as long as the exemption is in place. B) Ivan's property tax bill will never increase as long as he qualifies for the exemption. C) Ivan's tax bill can only go up as much as the published rate of inflation every year. D) Ivan's tax bill may go up even with the exemption in place if he makes property improvements.
D) Ivan's tax bill may go up even with the exemption in place if he makes property improvements. This exemption freezes the property's assessed value, though taxes may go up if Ivan makes improvements to the property or tax rates increase.
Which one of these statements best describes Illinois license reciprocity? A) Licensees from another state are required to cooperate with Illinois licensees when working on opposite sides of the same transaction. B) Licensees from another state don't have to be licensed in Illinois to practice real estate there, as long as they affiliate with an Illinois sponsoring broker. C) Licensees in another may practice real estate to a limited extent in Illinois as long as they're licensed in a state that has a reciprocity agreement with Illinois. D) Licensees in another state that has a reciprocity agreement with Illinois may skip some or all of the Illinois pre-licensing requirements.
D) Licensees in another state that has a reciprocity agreement with Illinois may skip some or all of the Illinois pre-licensing requirements. Reciprocity agreements allow licensees from another state to skip some or all of the Illinois pre-licensing requirements when applying for Illinois licensure.
Liz listed her property with an agreement end date of May 31. The property went under contract on May 12, and the buyer's earnest money was deposited on May 13. Based on the home inspection results, the buyer legally terminated the contract on May 20. When did the listing agreement between Liz and the listing broker officially terminate? A) May 12 B) May 13 C) May 20 D) May 31
D) May 31 The listing agreement officially terminated on May 31.
Marquis Realty moved to a larger office in a busier part of town. What's one of the first things the firm is required by Illinois licensing laws to do? A) Change the bank that holds their trust funds to one closer to the new office. B) Change the office location address for all the firm's sponsored licensees within 24 hours. C) Notify all the firm's past and current clients of the new location within five days. D) Notify the Division of Real Estate immediately.
D) Notify the Division of Real Estate immediately. Marquis must immediately notify the Division of Real Estate about the change in location.
Sandra enters into a contract to sell her home to Paul. Under the statute of frauds, in order to be legally enforceable, the written contract must name the contracting parties, identify the subject matter of the contract, and ______. A) Be for a legal purpose B) Be signed by two or more attorneys C) Include a certain amount of financial consideration D) Present the essential terms and conditions of the contract
D) Present the essential terms and conditions of the contract Under the statute of frauds, in order to be legally enforceable, the written contract must name the contracting parties, identify the subject matter of the contract, and present the essential terms and conditions of the contract.
Which type of lien is a specific lien? A) Deceased person's debt lien B) Income tax lien C) Judgment lien D) Real property tax lien
D) Real property tax lien A real property tax lien is a specific lien because it is against a single property.
In Illinois, which of these events would stigmatize a property? A) Former residence of a celebrity B) Located near a former hazardous waste facility C) More than three sales within the last year D) Site of a notorious murder
D) Site of a notorious murder A stigmatized property is one that has been psychologically impacted by an event that occurred on the property.
Which of these license designations does NOT require a separate examination? A) Associate broker B) Broker C) Managing broker D) Sponsoring broker
D) Sponsoring broker A sponsoring broker holds a managing broker's license, so no separate examination is required.
Which of these statements about the Illinois sponsoring broker exam is true? A) Candidates who fail just one portion of the exam will be permitted to re-take just the failed portion. B) Candidates will be presented with simulation problems and essay questions on the licensing exam. C) Sponsoring broker candidates must pass the licensing exam with a scaled score of 75%. D) Sponsoring brokers don't take a separate exam.
D) Sponsoring brokers don't take a separate exam. Sponsoring brokers hold a managing broker's license; there's not a separate exam.
The duties that Illinois licensees owe to their clients are called _____________ duties. A) Brokerage B) Client C) Fiduciary D) Statutory
D) Statutory In Illinois, Article 15 of the Real Estate License Act replaced the standard six fiduciary duties agents owe to clients with five statutory duties.
Jessica is a first-time homebuyer in Illinois. Where can she get financial assistance to help her with the down payment for her home? A) The Illinois Affordable Housing Tax Credit Act B) The Illinois Down Payment Assistance Fund C) The Illinois Housing and Rental Assistance Association D) The Illinois Housing Development Authority
D) The Illinois Housing Development Authority The Illinois Housing Development Authority (IHDA) provides various homeownership and rental assistance programs.
A borrower has no protection from a deficiency judgment when ______________. A) A consent foreclosure is approved by the lender B) A deed in lieu of foreclosure is approved by the lender C) A non-judicial foreclosure is pursued by the lender D) The auction sale price is less than the mortgage balance
D) The auction sale price is less than the mortgage balance The lender will file a deficiency judgment against the borrower when there's a loan balance after the foreclosure auction.
Illinois licensee Shawn is meeting with his seller clients, the Martins. Within the brokerage agreement is a statement that a designated agency relationship exists, and he intends to explain his brokerage's policies on compensation and working with cooperating brokers. What else must be disclosed to satisfy the state's designated agency disclosure requirements? A) A description of other forms of agency available to the consumer B) A list of licensees from which to choose their designated agent C) An opt out of designated agency option D) The designated agent's name
D) The designated agent's name In Illinois, the designated agency disclosure must clearly state that a designated agency relationship exists, unless otherwise agreed to, and must list the name of the designated agent.
How much real estate practice experience must an Illinois broker have to become a managing broker? A) Five years B) Four years C) Three years D) Two years
D) Two years Brokers in Illinois must have at least two years of real estate experience as a licensee to become a managing broker.
Adam works for a rental finding service. He's working with a landlord, Trendmaker Apartments. He just located a tenant for one of the apartments, and the tenant has signed a lease. Which of these statements is true? A) Adam is required to include the contract term, fee to be paid, unit type and location, and other information in the landlord's representation agreement. B) Adam is responsible for ensuring that the lease agreement is accurate. C) Illinois law prohibits licensees from have a dual agency relationship with a tenant and landlord. D) Upon entering into a lease contract, the tenant must be provided with specific information regarding the unit and the owner.
D) Upon entering into a lease contract, the tenant must be provided with specific information regarding the unit and the owner Individuals who work for a rental finding service don't do so in a licensed capacity. They therefore don't represent either party, but work to bring the parties together. Tenants must be provided with specific information regarding the unit and the owner.
In Illinois, in order to engage in dual agency, a licensee must have written informed consent from both the buyer and the seller. When must it be obtained? A) At any time, as long as there is an agency agreement in place with each party B) Once the purchase contract has been accepted and signed C) Prior to entering into the purchase contract for the transaction D) When entering into a listing/buyer agreement with the client
D) When entering into a listing/buyer agreement with the client Informed consent must be obtained at the time a listing/buyer agreement is signed, to provide the client an opportunity to make an informed choice whether or not to accept dual agency. And clients can revoke their permission at any time.
Annette recently moved out of the apartment she'd been in for two years. She was careful to leave everything in good repair and clean when she left, but the landlord retained most of her security deposit anyway. He also refused to respond to her demands to return it. Does Kennedy have any options left? A) No. Illinois law doesn't control how landlords handle security deposits, and the deposit may be retained at the landlord's discretion. B) No. Since Annette lived in the unit for more than one year, she's not entitled to the return of any part of her security deposit. C) Yes. She can file a complaint with the Illinois Real Estate Commission. Her landlord may be required to return the full amount of her security deposit. D) Yes. She can file suit in small claims court.
D) Yes. She can file suit in small claims court. Landlords may only retain a security deposit for certain reasons, such as damage or unpaid rent. If it's illegally retained, the tenant can file suit in small claims court for amounts up to $10,000.
A condition of an offer; all ________ must be satisfied or removed before a transaction can close Ex. In Frank's offer to purchase Jennifer's estate, he wrote in a(n) ________ that stated, "Offer is ________ on buyer's ability to obtain financing at no more than 5% interest." If Frank is unable to obtain financing under those terms, he may terminate the contract.
contingency
A type of agency agreement in which the real estate licensee or firm is the only one allowed to represent the buyer/seller and earns a commission if the sale goes through unless the client finds a buyer/property without the licensee's assistance Ex. Because James had signed a(n) ________ agreement with his broker, Jackie, James had the option of selling his house himself and not paying a commission.
exclusive agency
A listing agreement in which the broker has earned a commission no matter who finds the buyer for the property during the term of the listing Ex. To protect her commission, Amy always asked for a(n) ________ agreement when working with sellers.
exclusive right-to-sell
