Free Illinois Real Estate Practice Exam

Q1.Under the Illinois Residential Real Property Disclosure Act (765 ILCS 77), in which situation is a seller NOT required to provide a property disclosure report?

• A.Sale of a single-family home built in 1985 that has been the seller's primary residence
• B.Sale of a condominium unit in a building constructed in 1990
• C.Sale of a residential property through a court-ordered foreclosure proceeding
• D.Sale of a duplex where the seller occupies one unit as their primary residence

Q2.What is the Illinois state transfer tax rate for real estate transactions?

• A.$0.25 per $500 of sale price
• B.$0.50 per $500 of sale price
• C.$1.00 per $500 of sale price
• D.$1.50 per $500 of sale price

Q3.A broker-owner operates a residential brokerage and has a referring arrangement with a title company in which the broker receives a fee for each transaction referred. The broker discloses this arrangement to clients in the listing agreement but does not provide a separate written disclosure at or before the time of referral. A buyer later files a complaint. Under RESPA Section 8 (12 U.S.C. § 2607), which statement BEST describes the broker's legal exposure?

• A.The broker is in violation of RESPA because a referral fee arrangement with a settlement service provider requires a written affiliated business arrangement (AfBA) disclosure to the client at or before the time of each referral, separate from the listing agreement.
• B.The broker has no RESPA violation because RESPA Section 8 only prohibits undisclosed kickbacks; disclosure in the listing agreement satisfies the statute's written notice requirement for all subsequent referrals.
• C.The broker is exempt from RESPA Section 8 requirements because the referral fee is paid by the title company to the broker, not by the consumer, so no settlement cost is increased.
• D.RESPA Section 8 applies only to lenders and mortgage brokers, so a real estate broker's referral arrangement with a title company is regulated exclusively by state licensing law.

Q4.Under the Fair Housing Act, which of the following is NOT a protected class at the federal level?

• A.Race
• B.Religion
• C.Sexual orientation
• D.National origin

Q5.RESPA (Real Estate Settlement Procedures Act) primarily protects consumers by requiring disclosure of what information?

• A.Property inspection results
• B.Property tax assessments
• C.Settlement costs and loan servicing details
• D.Homeowners insurance requirements

Q6.What is the purpose of the safety clause (protection clause) in an Arizona listing agreement?

• A.To protect the seller from liability if a buyer is injured on the property during the listing period
• B.To prevent the listing agent from disclosing the seller's motivation to prospective buyers
• C.To allow the broker to automatically extend the listing if the property does not sell
• D.To protect the broker's commission if the seller sells to a buyer the broker introduced during the listing period, even after it expires

Q7.Which of the following is an essential element required to form a valid real estate contract?

• A.Mutual assent (offer and acceptance)
• B.A licensed real estate agent as a party
• C.Notarization by a public notary
• D.A minimum purchase price of $500

Q8.Under the Illinois Condominium Property Act, what percentage of unit owners must approve the termination of a condominium?

• A.51% of unit owners
• B.67% of unit owners
• C.75% of unit owners
• D.80% of unit owners

Q9.In a joint tenancy, what happens to a deceased owner's interest in the property?

• A.It passes to the deceased owner's heirs according to their will
• B.It is distributed equally among all remaining joint tenants
• C.It reverts to the state through escheat
• D.It automatically passes to the surviving joint tenant(s) by right of survivorship

Q10.In states where attorneys are required to conduct real estate closings, what is the primary reason for this requirement?

• A.To ensure compliance with federal lending regulations
• B.To provide legal protection through the unauthorized practice of law statutes
• C.To guarantee title insurance coverage
• D.To meet federal settlement requirements under RESPA

Q11.Under the Truth in Lending Act (TILA) and Regulation Z, a lender must provide a borrower with a Loan Estimate within how many business days of receiving a completed loan application?

• A.1 business day
• B.3 business days
• C.5 business days
• D.7 business days

Q12.A seller accepts a buyer's offer on a home. Before closing, the seller receives a higher offer and wants to cancel the contract. What best describes the original buyer's contractual position?

• A.The buyer has no legal recourse because the property is still owned by the seller
• B.The buyer may sue for specific performance or damages because a valid contract exists
• C.The buyer must accept the return of their earnest money as full remedy
• D.The contract is automatically void once the seller receives a higher offer

Q13.A property sold for $350,000 and generates annual net operating income of $28,000. What is the capitalization rate?

• A.6.5%
• B.8.0%
• C.7.2%
• D.8.5%

Q14.An Illinois sponsoring broker's office runs an online advertisement for a listed property that displays the property address and price, a photo, and the team name 'The Apex Group.' No other identifying information appears in the ad. Under 68 Ill. Adm. Code 1450 and the Illinois Real Estate License Act of 2000, which violation has MOST LIKELY occurred?

• A.The advertisement is compliant because the property address serves as sufficient identification of the brokerage.
• B.The advertisement violates Illinois advertising rules because it fails to clearly and conspicuously identify the sponsoring broker's licensed name or trade name.
• C.The advertisement violates Illinois law only if it appears on a third-party listing portal rather than the brokerage's own website.
• D.The advertisement is permissible because team names are treated as equivalent to brokerage names under Illinois law.

Q15.An Illinois sponsoring broker is holding earnest money in the firm's escrow account. Under 68 Ill. Adm. Code 1450 and the Illinois Real Estate License Act of 2000, which of the following practices would constitute a violation regarding escrow account handling?

• A.Depositing earnest money into a federally insured interest-bearing account with written consent of all parties.
• B.Maintaining a separate escrow account that is not commingled with the broker's operating funds.
• C.Using earnest money funds held in escrow to pay the brokerage's monthly office rent before the transaction closes.
• D.Retaining escrow records for the period required by Illinois administrative rule.