Illinois Real Estate Broker Exam Study Guide

Joint tenancy carries the right of survivorship (a deceased co-owner's share passes to survivors) and requires the four unities. Tenancy in common has no survivorship — each owner's share passes to their heirs and shares can be unequal.

The greatest protection to a buyer, with the grantor warranting clear title against all defects arising at any time, including before the grantor owned the property. It includes covenants such as seisin, quiet enjoyment, and warranty forever.

An encumbrance is any claim or restriction on a property held by someone other than the owner (liens, easements, deed restrictions). A lien is a specific type of encumbrance — a financial/monetary claim used as security for a debt.

A right to use adjoining land that benefits one parcel (the dominant estate) and burdens another (the servient estate). It runs with the land and transfers with ownership.

Race, color, religion, national origin, sex, disability, and familial status. Discrimination in the sale, rental, or financing of housing against these classes is prohibited.

Steering: directing buyers toward or away from areas based on a protected class. Blockbusting: inducing sales by claiming a protected group is moving in. Redlining: denying loans or insurance in certain areas. All are illegal discriminatory practices.

Both secure a loan with real property. A mortgage involves two parties (borrower and lender) and typically requires judicial foreclosure; a deed of trust adds a neutral trustee holding title and often allows non-judicial foreclosure.

Sales comparison (comparing similar recently sold properties), cost approach (land value plus replacement cost minus depreciation), and income approach (capitalizing net operating income). The approach emphasized depends on property type.

Offer and acceptance (mutual assent), consideration, legal capacity of the parties, legal purpose, and — for real estate — compliance with the Statute of Frauds requiring the contract to be in writing to be enforceable.

Real property is land and everything permanently attached to it (buildings, fixtures), plus the associated bundle of rights. Personal property (chattel) is movable and not permanently affixed.

The most complete form of ownership — the largest bundle of rights, of indefinite duration, freely inheritable and transferable, subject only to government powers and any private restrictions.

Police power (regulation like zoning), Eminent domain (taking for public use with compensation), Taxation, and Escheat (property reverts to the state when an owner dies with no heirs or will).

Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care/diligence. The agent must place the client's interests above their own.

A brokerage names specific licensees to represent the buyer and seller separately, allowing the firm to represent both parties in a transaction without the whole firm being a dual agent.

A latent defect is a hidden, material physical flaw not discoverable by ordinary inspection. Known latent material defects must be disclosed to buyers.

A broker is a person licensed to conduct real estate business for others in exchange for compensation. Brokers must hold an active Illinois Real Estate License and supervise affiliated agents.

The broker-in-charge is the licensed real estate broker responsible for all brokerage office activities, supervision of licensed agents, and compliance with state and federal regulations.

A broker must disclose all compensation earned from a transaction at closing and in writing. Material facts about compensation must be disclosed before a transaction is finalized.

A formal relationship between a broker/agent and a client where the agent has fiduciary duties to act in the client's best interest and maintain confidentiality of client information.

A listing agreement where only the named broker may represent the seller, and the seller must pay commission if the property sells during the listing period, regardless of who procures the buyer.

A binding agreement giving one party the right to buy or lease property at a specified price within a set time period, without obligation to exercise the option.

Conditions that must be satisfied for a contract to be binding, such as financing approval, home inspection, or appraisal. If contingencies are not met, the buyer may withdraw without penalty.

Written disclosure to a buyer or seller confirming whether an agent represents them exclusively, both parties, or is unrepresented. Required before a transaction begins in Illinois.

Earnest money (deposit) is credited toward the purchase price at closing as part of the buyer's down payment and closing costs.

A tax-deferred real estate exchange where a property owner sells one investment property and purchases another similar property of equal or greater value within specified IRS timeframes.

The legal process of acquiring ownership of land through continuous, open, exclusive, and hostile possession for a statutory period (20 years in Illinois).

An agent who makes false statements about property can face civil liability, license suspension or revocation, and potential criminal charges for fraud.

Radon testing is recommended for residential properties. While not always mandated, sellers should disclose radon testing results. Many lenders and agencies encourage pre-purchase testing.

A lease grants exclusive possession of real property for a set term with landlord-tenant rights and responsibilities. A license is a non-exclusive permission to use property without the legal protections of a lease.

Title that is free from defects and encumbrances that would reasonably alarm a prudent buyer, allowing the seller to deliver clear ownership to the buyer.

Brokers must maintain trust accounts, deposit client funds within specified timeframes, keep detailed records, and never commingle client money with business funds.

A legal right allowing a homeowner to exempt a portion of home equity from creditors' claims. In Illinois, this provides protection for the primary residence.

A broker's agreement to work with another broker in a transaction, typically sharing commission when both buyer and seller are represented by different brokers in a sale.

Violations include fraud, misrepresentation, commingling of funds, failure to disclose material facts, breaching fiduciary duties, or violating fair housing laws.