Illinois Real Estate Broker Practice Exam

1. A neighbor has openly fenced, occupied, and maintained a strip of an adjoining owner's land continuously, exclusively, and without the owner's permission for the entire period required by state law. The neighbor now asks a court to declare him the owner of the strip. Which doctrine supports this claim?

• A. Constructive eviction
• B. Adverse possession
• C. Easement by prescription
• D. Eminent domain

2. A restaurant tenant installed commercial ovens, a walk-in cooler, and custom booths in leased space for use in its business. The lease is about to expire, and the tenant wants to take the equipment to a new location. What is the tenant's right regarding these items?

• A. They may be removed only if a court issues an order authorizing removal
• B. They are the landlord's personal property because they were installed on the landlord's premises
• C. The items became real property when attached and now belong permanently to the landlord
• D. They are trade fixtures the tenant may remove before the lease ends, repairing any damage caused by removal

3. A farmer leasing cropland planted corn during the tenancy. The tenancy ends through no fault of the farmer before the corn can be harvested. Who owns the growing crop, and why?

• A. The tenant farmer, because annually cultivated crops are emblements treated as the tenant's personal property
• B. The landowner, because the lease ended before harvest
• C. The county, which must sell the crop and divide the proceeds
• D. The landowner, because crops are part of the real estate once planted

4. An owner's parcel borders a small non-navigable river, and the owner uses the water for irrigation. The legal rights this owner holds by virtue of owning land along the flowing watercourse are known as what?

• A. Littoral rights
• B. Severable mineral rights
• C. Appropriative rights
• D. Riparian rights

5. Over many years, a slow-moving river gradually deposits soil along the bank of a waterfront parcel, measurably enlarging the owner's usable land. By which process does the owner acquire title to this added land?

• A. Reliction caused by sudden flooding
• B. Erosion
• C. Accretion
• D. Avulsion

6. A survey ordered by a purchaser reveals that the seller's garage extends two feet across the boundary line onto the neighboring parcel. The portion of the garage crossing the line is best described as:

• A. An encroachment on the neighboring property
• B. An easement appurtenant benefiting the seller's land
• C. A variance from the local zoning ordinance
• D. A license granted by the neighbor

7. A homeowner tells a friend, "You can park your boat in my side yard until I change my mind." The friend receives no written agreement and pays nothing. The friend's privilege to use the yard is best classified as:

• A. A leasehold estate in the side yard
• B. A license, a personal privilege that the owner may revoke at any time
• C. A restrictive covenant running with the land
• D. An easement in gross that binds future owners

8. A landowner divides a parcel and sells the rear half, which has no access to any public road except across the front half that the seller kept. The deed is silent about access. What right will a court most likely recognize for the rear parcel's buyer?

• A. A revocable license across the front parcel
• B. An easement by necessity across the front parcel
• C. No right at all, because the deed granted none
• D. An easement in gross personal to the seller

9. A purchaser buys a unit in a residential condominium. Which statement correctly describes what the purchaser owns?

• A. A fee interest in the entire building held jointly with all other residents
• B. Shares of stock in a corporation together with a proprietary lease for the unit
• C. Fee simple title to the individual unit plus an undivided interest in the common elements shared with other unit owners
• D. A leasehold interest in the unit and a fee interest in the hallways and grounds

10. A buyer acquires the right to occupy apartment 4B in a building owned by a resident-controlled corporation. Instead of a deed, the buyer receives shares of the corporation's stock and a proprietary lease for the apartment. What has the buyer purchased?

• A. A tenancy in common with the other residents of the building
• B. A timeshare estate in the apartment
• C. A fee simple condominium interest in real property
• D. A cooperative interest, which is personal property in the form of stock coupled with a lease

11. A state highway authority needs a privately owned parcel for a new interchange. The owner refuses to sell, so the authority files a court action to acquire the parcel and pays the owner just compensation. This acquisition is an exercise of which governmental power?

• A. Police power, exercised through zoning
• B. Taxation through a special assessment
• C. Eminent domain, carried out through condemnation proceedings
• D. Escheat

12. A property owner dies without a will, and an exhaustive search locates no heirs entitled to inherit. What ultimately happens to the deceased owner's real estate?

• A. It is sold at auction and the proceeds are destroyed
• B. Title remains permanently in the deceased's name
• C. Title passes to the state through escheat
• D. It passes to the deceased's closest business associates

13. A tenant signs a lease for a warehouse running from June 1 of this year through May 31 of next year. On the final day the lease simply ends, and neither party is required to give the other any advance notice of termination. Which leasehold estate does this lease create?

• A. An estate for years
• B. A tenancy at sufferance
• C. A tenancy at will
• D. A periodic tenancy

14. An item of personal property becomes so permanently attached to real estate that it is now legally treated as part of the real property. This converted item is referred to as:

• A. A fixture
• B. An emblement
• C. A chattel
• D. A trade appurtenance

15. An owner grants her neighbor the right to cross her driveway to reach a public road. The neighbor does not own or possess the land but has a right to use it for that limited purpose. This right is best described as:

• A. A fee simple interest
• B. An easement
• C. A freehold estate
• D. A homestead

16. A life estate is granted to a person "for the duration of her life." What happens to the property interest when the life tenant dies?

• A. It escheats to the state automatically in all cases
• B. It passes according to the terms of the original grant, to either a remainderman or by reversion to the grantor
• C. The life tenant may will it to her own heirs
• D. It converts into a tenancy in common

17. A charge or claim against a property that may affect its title or limit its use — such as a lien, easement, or restrictive covenant — is generally categorized as:

• A. An estate in land
• B. An encumbrance
• C. A freehold
• D. An allodial right

18. Two unmarried business partners take title to an investment property as co-owners. Each holds an undivided fractional interest, they may own unequal shares, and each partner's interest passes to his own heirs upon death rather than to the other partner. Which form of co-ownership is described?

• A. Ownership in severalty
• B. Joint tenancy
• C. Tenancy in common
• D. Tenancy by the entirety

19. A homeowner holds a bundle of legal interests in her property, including the right to occupy it, sell it, lease it, and exclude others. In property law, this concept is best described as which of the following?

• A. The bundle of rights
• B. An easement in gross
• C. A restrictive covenant
• D. A lien priority

20. Two people take title to a parcel together. Their deed states that upon the death of one owner, that owner's interest automatically passes to the survivor rather than to the deceased's heirs. Which form of co-ownership does this describe?

• A. Tenancy in common
• B. Joint tenancy with right of survivorship
• C. Ownership in severalty
• D. A leasehold estate

21. An owner conveys land to another person "for as long as the land is used as a public library." This grant creates an estate that could end automatically if the stated condition is violated. This is an example of which category of estate?

• A. A fee simple absolute
• B. A defeasible fee
• C. A life estate pur autre vie
• D. A tenancy at sufferance

22. A single individual purchases a condominium unit and takes title in her name alone, with no other person holding an interest. This manner of holding title is known as:

• A. Tenancy by the entirety
• B. Ownership in severalty
• C. Community property
• D. Tenancy in common

23. Which of the following best distinguishes real property from personal property?

• A. Real property is always more valuable than personal property
• B. Real property can be owned; personal property cannot
• C. Personal property is always exempt from taxation
• D. Real property includes land and things permanently affixed to it, while personal property is movable and not affixed

24. A tenant's lease expired last month, yet the tenant remains in the apartment without the landlord's consent and continues to occupy it while the landlord decides whether to evict. What is the tenant's status during this holdover period?

• A. A freeholder with equitable title
• B. A tenant at will occupying with implied permission
• C. A tenant at sufferance, holding over without the landlord's consent
• D. A periodic tenant on a renewed month-to-month term

25. An apartment renter pays rent on the first of each month with no fixed end date; the arrangement simply continues month after month until either party gives proper advance notice. Which leasehold estate is this?

• A. A tenancy at sufferance
• B. A periodic tenancy
• C. A life estate
• D. An estate for years

26. A commercial tenant with three years remaining on its lease transfers the entire remaining term and all of its rights in the space to another business, retaining no interest in the premises. What has the tenant done?

• A. Made an assignment of the lease
• B. Executed a novation releasing itself from the lease
• C. Granted a sublease for the remaining term
• D. Surrendered the premises to the landlord

27. A landlord ignores repeated requests to restore heat and running water in an occupied apartment during winter, making the unit unlivable. The tenant finally moves out and stops paying rent, claiming the landlord's neglect ended the lease obligations. What doctrine supports the tenant?

• A. Actual eviction by the landlord
• B. Constructive eviction, because the landlord's failure made the premises uninhabitable and the tenant vacated
• C. Abandonment, which forfeits the tenant's security deposit
• D. Adverse possession of the rental unit

28. A single-tenant commercial building is leased on terms requiring the tenant to pay base rent plus the property taxes, hazard insurance premiums, and maintenance costs of the building. What type of lease is this?

• A. A percentage lease
• B. A graduated lease
• C. A net lease
• D. A gross lease

29. A shopping-center clothing store pays its landlord a modest fixed base rent each month plus an additional amount calculated from the store's gross sales. Which lease arrangement is being used?

• A. A percentage lease
• B. A ground lease
• C. A net lease based on operating expenses
• D. An index lease tied to inflation

30. A court enters a money judgment against a debtor, and the judgment becomes a lien that can attach to any real and personal property the debtor owns in the jurisdiction, not just one parcel. How is this lien classified?

• A. A specific lien limited to the debtor's residence
• B. A voluntary lien created by agreement of the parties
• C. An equitable servitude on the debtor's land
• D. A general lien, because it affects all of the debtor's property rather than a specific parcel

31. A roofing contractor completes a major roof replacement on a home but is never paid. To secure the debt from the value of the property the work improved, the contractor records a claim against that specific parcel. Which lien has the contractor used?

• A. A judgment lien against all the owner's assets
• B. A general tax lien
• C. A voluntary mortgage lien
• D. A mechanic's lien against the improved property

32. While researching title, a buyer's attorney finds a recorded notice stating that a lawsuit is pending that could affect ownership of the parcel the buyer wants. What is this notice, and what is its effect on the buyer?

• A. A lis pendens, which gives constructive notice that anyone acquiring the property takes it subject to the suit's outcome
• B. A judgment that has already transferred title to the plaintiff
• C. A writ of attachment that freezes the seller's bank accounts
• D. A satisfaction of mortgage confirming clear title

33. A seller signs a deed and hands it to the buyer, who accepts it, but the deed does not name the buyer as a party. Under the required elements of a valid deed, what is the effect of this omission?

• A. The deed remains fully effective because delivery and acceptance occurred
• B. The deed fails to satisfy the requirement that a deed name the parties
• C. The deed is automatically converted into a quitclaim deed
• D. The omission is cured automatically once the deed is recorded

34. A rural deed describes the land by starting at a marked point of beginning, then reciting a series of compass directions and distances that trace the boundary until the description returns to the starting point. Which method of legal description is being used?

• A. Metes and bounds
• B. A street-address description
• C. The rectangular government survey system
• D. The lot-and-block system

35. A deed for a suburban home describes the property simply as "Lot 12 in Block 3 of the Sunny Meadows Subdivision, as shown on the plat recorded in the county records." Which method of legal description does this deed use?

• A. The rectangular survey system
• B. The lot-and-block (recorded plat) system
• C. A monument-based description
• D. Metes and bounds

36. A title search reveals a decades-old mortgage against a parcel that appears to have been paid off long ago, but no release was ever recorded. The stale lien makes buyers and title insurers nervous. What is this defect called, and how is it typically removed?

• A. A deed restriction, removable by rezoning
• B. An encroachment, removable by moving the improvement
• C. A latent physical defect, removable by inspection
• D. A cloud on title, removable through a quiet title action or a recorded release

37. An owner holds title in fee simple absolute. Which statement correctly describes this estate?

• A. It is the highest and most complete form of ownership, freely inheritable and transferable
• B. It requires the grantor's consent before any resale
• C. It terminates automatically upon the owner's death and cannot be inherited
• D. It reverts to a remainderman when a named person dies

38. A woman is granted the right to occupy and use a home for as long as she lives; upon her death the property is to pass to her nephew. What is the nephew's interest called?

• A. Reversion
• B. Remainderman
• C. Life tenant
• D. Grantor

39. A document purporting to be a deed omits a legal description of the property but is otherwise in writing, names the parties, includes a granting clause, and is signed by the grantor and delivered and accepted. Is this deed effective?

• A. Yes, because delivery and acceptance are the only requirements
• B. No, because a legal description is one of the required elements of an effective deed
• C. Yes, because a granting clause substitutes for a legal description
• D. No, because only a notary's signature can cure the omission

40. A borrower's home loan requires equal monthly payments that include both principal and interest, with the loan balance reduced to zero by the final scheduled payment. Over the life of this loan, how does the makeup of each payment change?

• A. The principal portion shrinks while the interest portion grows each month
• B. Each payment is applied entirely to principal until the balance is halved
• C. The interest portion shrinks and the principal portion grows as the balance declines
• D. The portions of principal and interest remain identical in every payment

41. A commercial borrower's loan calls for monthly payments calculated as if the loan would be repaid over thirty years, but the entire remaining balance is due in a single large payment at the end of year seven. What is this final payment called, and how is the loan classified?

• A. A margin payment on an adjustable-rate loan
• B. A balloon payment on a partially amortized loan
• C. A deficiency payment on a fully amortized loan
• D. An escrow payment on a budget mortgage

42. A homeowner sells her mortgaged property to a buyer without notifying or obtaining consent from her lender. The loan documents contain a clause permitting the lender, upon such a transfer, to declare the entire remaining balance immediately due. Which clause is this?

• A. Alienation clause, also called a due-on-sale clause
• B. Defeasance clause
• C. Escalation clause
• D. Subordination clause

43. An investor purchases a home by taking title "subject to" the seller's existing mortgage rather than formally assuming it. The investor later stops making payments and the lender forecloses, leaving a shortfall. Who bears personal liability for the unpaid debt?

• A. The lender, which accepted the risk of transfer
• B. The original seller-borrower, who remains personally liable on the note
• C. Neither party, because the foreclosure extinguished all liability
• D. The investor alone, because the investor took over the payments

44. A first-time buyer with limited savings obtains a loan through a government program in which an agency of the federal government protects the lender against loss from borrower default, though the funds are advanced by an approved private lender. Which describes this program's structure?

• A. The agency insures loans made by approved lenders rather than lending money itself
• B. The agency guarantees the property's future market value for the lender
• C. The agency lends government funds directly to the borrower
• D. The agency purchases the home and resells it to the borrower on contract

45. A buyer purchases a home for $300,000, making a $60,000 down payment and financing the rest with a mortgage loan. What is the loan-to-value ratio of this financing?

• A. 20 percent
• B. 80 percent
• C. 75 percent
• D. 85 percent

46. After closing hundreds of home loans, a lender bundles and sells the loans to a large investor so that the lender can replenish its funds and originate new mortgages. In which market did this sale take place?

• A. The secondary mortgage market
• B. The municipal bond market
• C. The commercial paper market
• D. The primary mortgage market

47. In a financing arrangement, a home buyer conveys bare legal title to a neutral third party as security for the lender, with the borrower keeping possession and full use of the home, and the third party empowered to sell the property if the borrower defaults. Who are the three parties, and who holds the bare title?

• A. Trustor (borrower), beneficiary (lender), and trustee — the trustee holds bare legal title
• B. Vendor, vendee, and escrowee — the vendee holds title
• C. Optionor, optionee, and broker — the broker holds title
• D. Mortgagor, mortgagee, and appraiser — the mortgagee holds title

48. In one state, a borrower who signs a mortgage keeps full legal title to the home, and the lender receives only a lien against it, so the lender must complete a court-supervised foreclosure to reach the property after default. Which legal theory of mortgages does this state follow?

• A. The recording-first doctrine
• B. Intermediate contract theory
• C. Title theory
• D. Lien theory

49. Three years into a fixed-rate home loan, a borrower inherits money and pays the entire remaining balance ahead of schedule. The lender responds by charging an extra fee authorized by the loan documents for early retirement of the debt. Which provision permits this charge?

• A. A prepayment penalty clause
• B. The acceleration clause
• C. The defeasance clause
• D. A partial release clause

50. A landowner's existing recorded loan is in first position. To let a construction lender finance a new building on the site, the existing lender signs an agreement voluntarily allowing the new construction loan to move ahead of it in priority. What is this agreement called?

• A. A subordination agreement
• B. An estoppel certificate
• C. A satisfaction of mortgage
• D. An assumption agreement

51. A private lender makes a consumer loan at an interest rate that exceeds the maximum rate the state permits lenders to charge for that kind of loan. What is this practice called?

• A. Usury
• B. Rate escalation
• C. Discounting
• D. Arbitrage

52. A mortgage applicant with steady income and strong credit is told by a loan officer that her application will be scored lower because she is recently divorced and receives part of her income from public assistance. Which federal law most directly prohibits this treatment?

• A. The Equal Credit Opportunity Act
• B. The Real Estate Settlement Procedures Act
• C. The Uniform Commercial Code
• D. The Truth in Lending Act

53. A bank's internal map marks certain neighborhoods, selected because of the racial composition of their residents, as areas where the bank will not make home loans regardless of individual applicants' qualifications. What is this practice, and is it lawful?

• A. Redlining, an illegal lending practice under federal fair housing and fair lending laws
• B. Blockbusting, which is unlawful only when done by real estate licensees
• C. Steering, a lawful marketing technique for lenders
• D. Permissible portfolio risk management, lawful if applied consistently

54. A lender fails to disclose the annual percentage rate and total finance charge to a borrower refinancing their principal residence. Which law and implementing regulation require this disclosure?

• A. RESPA, implemented by Regulation X
• B. The Fair Housing Act, implemented by HUD guidelines
• C. The Truth in Lending Act, implemented by Regulation Z
• D. The Statute of Frauds, implemented by state licensing law

55. For a negotiated fee, a landowner gives a developer the exclusive right to purchase a parcel at a fixed price at any time during the next six months. The developer has not promised to buy. Which statement best describes this arrangement?

• A. It is unenforceable because the developer gave no consideration
• B. It is an option contract: the owner must sell if the developer elects to buy, but the developer is not obligated to purchase
• C. It is a bilateral contract binding both parties to close
• D. It is a right of first refusal triggered only by a third-party offer

56. A buyer and seller sign a valid purchase agreement for a house, with closing set for next month. Before the deed is delivered, which interest does the buyer hold in the property?

• A. Equitable title, with legal title remaining in the seller until closing
• B. A leasehold interest pending the closing date
• C. No interest of any kind until the deed is recorded
• D. Legal title, with equitable title remaining in the seller

57. A purchase agreement states that if the buyer defaults, the seller may keep the earnest money as the seller's sole remedy, and both parties agreed to that amount when they signed. This contractual remedy is known as:

• A. Specific performance
• B. Liquidated damages
• C. Punitive damages
• D. An injunction against resale

58. With the lender's written agreement, a home buyer formally takes over the seller's existing loan, and the lender fully releases the original borrower from any further liability, substituting the buyer as the sole obligor. This substitution of parties is called:

• A. Novation
• B. Reformation
• C. Assignment
• D. Subrogation

59. Weeks after signing a purchase agreement, the buyer and seller mutually agree in writing to move the closing date back by ten days. The document they sign to change the existing term of their contract is best described as:

• A. A novation replacing the original contract parties
• B. An amendment modifying a term of the existing contract
• C. A rider that was part of the offer when first made
• D. An escrow instruction to the title company

60. Before closing, a buyer and seller both conclude the transaction no longer suits them. They sign an agreement canceling the purchase contract, and the earnest money is returned so each side stands where it stood before the contract existed. This unwinding is called:

• A. Assignment of the contract
• B. Mutual rescission
• C. Forfeiture of the deposit
• D. Unilateral breach

61. In a signed real estate purchase agreement, the seller promises to convey title at closing and the buyer promises to pay the purchase price. Because each party has exchanged a promise for a promise, this contract is classified as:

• A. Unilateral
• B. Bilateral
• C. Voidable
• D. Implied

62. A purchase agreement has been signed by both buyer and seller, but the closing is still three weeks away: the deed has not been delivered and the price has not been paid. During this interval, how is the contract classified with respect to performance?

• A. Executed, because both signatures are on the document
• B. Void, because performance has not begun
• C. Executory, because duties remain to be performed by both parties
• D. Implied, because performance is assumed

63. A buyer submits a signed written offer for a condominium but includes no earnest money deposit whatsoever. The seller signs and accepts. Later, the seller's attorney argues the contract is invalid because no deposit accompanied the offer. Is the attorney correct?

• A. Yes — but the defect is cured if a deposit is paid before closing
• B. Yes — a real estate contract without a deposit lacks consideration
• C. No — because contracts require consideration only when a broker is involved
• D. No — earnest money is not required for validity, because the parties' mutual promises supply the consideration

64. A purchase agreement declares that "time is of the essence." The buyer tenders performance two days after the contractual closing date, and the seller refuses to close and declares the buyer in default. What effect did the quoted clause have?

• A. It made the stated deadlines strictly enforceable, so missing the closing date is a breach
• B. It converted the agreement into an option contract
• C. It required both parties to close early if either requested it
• D. None — courts always allow a reasonable grace period for closing

65. While showing a house with a history of repeated basement flooding known to him, the seller's licensee assures a buyer that the basement "has never taken on water." The buyer purchases in reliance and floods follow the first spring rain. How is the licensee's statement best characterized?

• A. Fraudulent misrepresentation of a material fact, exposing the licensee to liability
• B. Permissible salesmanship because the seller authorized it
• C. A ministerial act with no legal consequence
• D. Puffing, a lawful statement of opinion

66. A seller owns two adjacent lots. During negotiations the seller intends to sell the smaller lot, while the buyer believes the deal covers the larger one; the sloppy contract description could refer to either. When the confusion surfaces, what is the likely status of this agreement?

• A. Enforceable at the seller's election only
• B. Unenforceable, because mutual mistake about the subject matter prevented a true meeting of the minds
• C. Fully enforceable against the buyer as written
• D. Cured automatically once the deed is recorded

67. A party makes an offer and the other party responds with different terms rather than accepting the original terms as stated. In general contract principles, how is this response best characterized?

• A. A binding acceptance regardless of the changed terms
• B. A counteroffer that rejects the original offer
• C. An automatic extension of the original offer's deadline
• D. A ratification of the original offer

68. During a review session, a student asks what 'consideration' means in the context of contract law. Which statement best describes consideration?

• A. The physical location where the contract is signed
• B. Something of value exchanged between the parties
• C. The emotional motive of one party
• D. A government fee paid to register the agreement

69. A licensing candidate is asked about the general purpose of a 'statute of frauds' concept in contract law. Which statement best captures its general purpose?

• A. To require that certain types of contracts be in writing to be enforceable
• B. To criminalize all oral agreements
• C. To eliminate the need for consideration
• D. To make every contract automatically renewable

70. After a valid contract is formed, both parties fully perform every obligation they owe. In contract terms, the contract is then said to be:

• A. Voided for lack of capacity
• B. Rescinded for fraud
• C. Breached
• D. Discharged by performance

71. A person who has not yet reached the age of legal majority signs an agreement. Under general contract principles, how is a contract entered into by a minor typically treated?

• A. Automatically void from the moment of signing in all cases
• B. Fully binding and non-cancelable like an adult's contract
• C. Generally voidable at the option of the minor
• D. Converted into a criminal matter

72. An agreement is formed for a purpose that the law prohibits. What is the general effect of an illegal purpose on the enforceability of the contract?

• A. It makes the contract enforceable only against the buyer
• B. It renders the contract generally unenforceable
• C. It has no effect on enforceability
• D. It doubles the damages available to each party

73. An examinee is asked which element must be present for a contract to be legally enforceable. The instructor emphasizes that this is one of the foundational requirements. Which of the following is a required element of a valid contract?

• A. Mutual assent between the parties
• B. A notarized signature on every page
• C. A witness present at signing
• D. Payment made in full before formation

74. Two parties dispute whether a valid contract exists because one claims there was never a true 'meeting of the minds.' What does the phrase 'meeting of the minds' most directly refer to?

• A. That a judge has pre-approved the agreement
• B. That the parties are related to one another
• C. That the parties mutually understand and agree to the essential terms
• D. That both parties are physically present in the same room

75. One party fails to perform its obligations under a valid contract without a legal excuse. This failure to perform is best described by which term?

• A. Ratification
• B. Novation
• C. Breach of contract
• D. Consideration

76. A contract is signed only because one party threatened the other with harm unless they signed. Which contract-law concept most directly describes this situation?

• A. Duress
• B. Consideration
• C. Assignment
• D. Performance

77. A consumer files a written complaint alleging that an Illinois real estate licensee mishandled a transaction. Which body has the authority to investigate the complaint and, if warranted, discipline the licensee's license?

• A. The county recorder of deeds
• B. The local multiple listing service
• C. The federal Department of Housing and Urban Development
• D. The Illinois Department of Financial and Professional Regulation

78. An Illinois broker sponsored by a brokerage firm completes a sale, and the grateful seller wants to hand the broker a bonus check made out to the broker personally. How must any compensation for this licensed activity be paid?

• A. Directly to the broker, since the broker performed the work
• B. Only through the broker's sponsoring broker, who may then compensate the sponsored licensee
• C. Into the transaction's escrow account for later division
• D. To the broker and sponsoring broker jointly in equal shares

79. An Illinois licensee runs an online ad for a listed home that shows attractive photos, the price, and the licensee's personal cell number — but never mentions any brokerage. Why is this advertisement improper?

• A. It is a blind ad, because advertising by a licensee must identify the sponsoring brokerage
• B. The price of a listing may never appear in an advertisement
• C. Personal phone numbers may not appear in any real estate ad
• D. Advertising residential property online is prohibited for licensees

80. A homeowner in Illinois decides to sell her own house herself, placing a yard sign, showing the home, and negotiating directly with buyers. She holds no real estate license. Is she violating the licensing law?

• A. Yes, because anyone negotiating a real estate sale must be licensed
• B. Yes, unless she first registers the sale with the state
• C. No, because an owner acting on her own behalf regarding her own property is exempt from licensure
• D. No, but only if she hires an attorney to conduct every showing

81. A sponsoring broker in Illinois receives a buyer's earnest money check with an accepted offer. Under the license law's handling requirements, into what kind of account must these funds be placed?

• A. Any interest-bearing account chosen by the listing licensee
• B. The brokerage's general business operating account, for accurate bookkeeping
• C. A special escrow account maintained for money belonging to others, kept separate from the firm's own funds
• D. The sponsoring broker's personal savings account until closing

82. An Illinois managing broker decides to sell a rental condo she owns personally, without listing it through any brokerage. When advertising the unit and negotiating with prospective buyers, what does Illinois license law require of her?

• A. She must first surrender her license to the state for the duration of the sale
• B. Nothing — license law does not apply to a licensee's personal transactions
• C. She must disclose to prospective buyers that she is a licensed real estate professional
• D. She must hire another brokerage to conduct all negotiations

83. A sponsoring broker hires an unlicensed personal assistant for a busy sales team. Which task may the unlicensed assistant lawfully perform?

• A. Preparing and mailing marketing materials and scheduling showing appointments at the licensee's direction
• B. Negotiating the repair credit on a pending contract when the licensee is unavailable
• C. Explaining contract contingencies to a buyer and recommending changes
• D. Hosting an open house alone and discussing price and terms with visitors

84. A seller tells his Illinois listing licensee that the furnace is failing but instructs the licensee to conceal it. A prospective buyer directly asks the licensee about the condition of the heating system. What must the licensee do?

• A. Refuse to answer any questions from buyers about the property's condition
• B. Answer falsely but note the truth in the transaction file
• C. Follow the seller's instruction, because obedience to the client always controls
• D. Decline to follow the instruction and refrain from misrepresenting the defect, because a licensee may not knowingly conceal or misstate material facts

85. An Illinois licensee closes a sale to a buyer referred by a neighbor who holds no real estate license. As a thank-you, the licensee wants his sponsoring broker to pay the neighbor several hundred dollars in cash for the referral. May this payment be made?

• A. Yes, if the amount is reasonable and disclosed to the parties
• B. Yes, provided it is paid after closing rather than before
• C. No — compensation for brokerage activity such as referrals for pay may not be paid to unlicensed persons
• D. Yes, but only by personal check rather than cash

86. A prospective buyer asks an Illinois listing licensee whether anyone ever died in the home. A prior occupant did die there of natural causes years ago. What best describes the licensee's disclosure position under Illinois law?

• A. A death on the property is not considered a material fact that must be disclosed, because it is a psychological rather than physical condition
• B. The licensee must refuse to show the property until the seller consents to disclosure
• C. The death must be disclosed only if it occurred in the last year
• D. The death must be disclosed in writing before any offer is accepted

87. A buyer and seller entered into a purchase agreement for a home, but the buyer's loan application is later denied and the financing contingency was not satisfied. What is the effect of an unsatisfied contingency on the parties' obligations?

• A. The contract becomes void immediately regardless of the contingency terms
• B. The buyer's performance obligation does not arise, since contingencies must be satisfied before a party is obligated to perform
• C. The seller may sue for specific performance regardless of the contingency
• D. The buyer forfeits the earnest money automatically with no recourse

88. A seller signed a contract to sell a parcel of land but later refuses to convey title. The buyer wants the actual property, not money damages. What remedy is most appropriate, and why?

• A. Liquidated damages, because earnest money covers any breach
• B. Rescission, because land disputes are always voidable
• C. Specific performance, because land is deemed unique and compels conveyance
• D. Reformation, because the deed lacked a legal description

89. A seller entered into an oral agreement to sell a house, and later refuses to close, claiming the agreement cannot be enforced because it was never put in writing. How should this contract be classified?

• A. Void, because it lacked a required element
• B. Voidable, because either party may disaffirm it
• C. Unenforceable, because it is otherwise valid but the Statute of Frauds requires land-sale contracts to be in writing
• D. Fully enforceable, because oral agreements bind real estate sales

90. A listing agent learns that the seller would accept a price well below the listed price. After the listing expires, a former customer of the agent asks what the seller would have accepted. Which fiduciary duty prevents the agent from disclosing this?

• A. Obedience, because the seller never instructed disclosure
• B. Accounting, because the information relates to trust funds
• C. Confidentiality, because it survives termination and forbids revealing information that would harm the principal's bargaining position
• D. Reasonable care, because the agent must protect their own reputation

91. A buyer working directly with the listing agent (without representation) discovers after closing that the agent knew of a hidden foundation crack but said nothing. What is the agent's liability exposure based on the duties owed to customers?

• A. None, because agents owe customers no duties at all
• B. None, because only fiduciary duties apply to customers
• C. Liability, because agents must disclose known material latent defects to customers even without owing them fiduciary duties
• D. Liability, but only because of the accounting duty

92. A buyer submits a written offer to purchase a home. Before the seller communicates acceptance, the buyer's financial situation changes and the buyer wants out. Can the buyer withdraw the offer?

• A. No, once submitted in writing an offer is irrevocable
• B. Yes, an offer may be revoked any time before acceptance is communicated
• C. No, only the seller's agent can withdraw an offer
• D. Yes, but only if the seller has not yet reviewed it

93. A seller signs a listing agreement authorizing a brokerage to market one specific house and find a ready, willing, and able buyer, with no authority beyond that transaction. In agency terms, what kind of agent is the brokerage?

• A. A universal agent empowered to handle all of the seller's affairs
• B. A general agent managing the seller's ongoing business
• C. A special agent authorized for a single, limited transaction
• D. A gratuitous agent, because listing services are free to sellers

94. A licensee representing the seller unlocks the door for an unrepresented buyer, hands over the printed listing sheet, and answers factual questions about the school district. The buyer later claims the licensee became the buyer's agent through these actions. How should these services be characterized?

• A. As a breach of the licensee's duty to the seller
• B. As ministerial acts, which are informational services that do not create an agency relationship
• C. As dual agency requiring immediate written consent
• D. As an implied buyer agency created by conduct

95. A buyer's designated agent negotiates a purchase for her client, and at closing the agent's compensation is paid out of the commission the seller agreed to pay the listing brokerage. The buyer worries this payment arrangement makes the agent represent the seller. Is the buyer correct?

• A. Yes — the agent becomes a dual agent the moment seller-side funds are used
• B. Yes — whoever pays the commission is automatically the principal
• C. No — the source of compensation does not determine the agency relationship, which is set by agreement and disclosure
• D. No — but only because compensation from a seller is illegal and must be refunded

96. A seller lists her home under an agreement providing that the listing brokerage earns the commission no matter who procures the buyer during the term — even if the seller finds the buyer entirely on her own. Which type of listing did she sign?

• A. An exclusive-agency listing
• B. An exclusive-right-to-sell listing
• C. A net listing
• D. An open listing

97. A seller gives nonexclusive authorization to several different brokerages to market his property, promising to pay only the brokerage that actually produces the buyer, and reserving the right to sell it himself and pay no one. Which listing arrangement is this?

• A. A designated-agency listing
• B. A multiple listing service placement
• C. An exclusive-right-to-sell listing
• D. An open listing

98. A seller tells a broker, "Get me $200,000 for the house, and anything you sell it for above that is yours to keep as your fee." What is the fundamental problem with this compensation arrangement?

• A. It is unobjectionable so long as the seller receives the target amount
• B. It is enforceable only if the excess is shared with the buyer
• C. It creates a net listing, in which the broker's personal profit motive conflicts with the fiduciary duty to obtain the best price for the seller
• D. It fails because commissions must always be a fixed percentage of price

99. Midway through a listing term, the seller — an individual owner — dies unexpectedly. No buyer has been found. What happens to the listing brokerage's agency relationship with the seller?

• A. It terminates by operation of law upon the principal's death
• B. It remains in force until the stated expiration date regardless of the death
• C. It converts to a buyer-agency relationship
• D. It continues automatically with the seller's heirs as the new principals

100. Two licensees sponsored by the same Illinois brokerage are involved in one transaction: the sponsoring broker appoints one to represent the seller and a different one to represent the buyer, each owing full duties to their own client. What is this arrangement called?

• A. Illegal undisclosed dual agency
• B. Subagency between the two licensees
• C. Designated agency, the standard Illinois approach when one brokerage serves both sides
• D. A transactional brokerage with no client duties