Illinois Real Estate Broker's Practice Exam | Actual
Exam Questions with Verified Correct Answers and
Rationales (100% Verified and Correct Answers) | Latest
Update – 2026/2027 | Already Graded A+
Question 1
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.
Answer: D
Rationale: Marquis must immediately notify the Division of Real Estate about the
change in location.
Question 2
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.
Answer: C
Rationale: 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.
pg. 1
,Question 3
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.
Answer: D
Rationale: This exemption freezes the property's assessed value, though taxes may go
up if Ivan makes improvements to the property or tax rates increase.
Question 4
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
Answer: D
Rationale: 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.
Question 5
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.
Answer: B
Rationale: 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.
pg. 2
,Question 6
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.
Answer: D
Rationale: Reciprocity agreements allow licensees from another state to skip some or
all of the Illinois pre-licensing requirements when applying for Illinois licensure.
Question 7
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
Answer: D
Rationale: The designated agent's name must be disclosed to satisfy the state's
designated agency disclosure requirements.
Question 8
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
Answer: C
pg. 3
, Rationale: Removing a large amount of carpet requires a major repair, which is paid
for out of the security deposit.
Question 9
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 can't be charged any fees.
D) Escrow accounts are insured by the state.
Answer: A
Rationale: 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.
Question 10
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
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.
Answer: C
Rationale: 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.
Question 11
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?
pg. 4
Exam Questions with Verified Correct Answers and
Rationales (100% Verified and Correct Answers) | Latest
Update – 2026/2027 | Already Graded A+
Question 1
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.
Answer: D
Rationale: Marquis must immediately notify the Division of Real Estate about the
change in location.
Question 2
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.
Answer: C
Rationale: 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.
pg. 1
,Question 3
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.
Answer: D
Rationale: This exemption freezes the property's assessed value, though taxes may go
up if Ivan makes improvements to the property or tax rates increase.
Question 4
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
Answer: D
Rationale: 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.
Question 5
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.
Answer: B
Rationale: 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.
pg. 2
,Question 6
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.
Answer: D
Rationale: Reciprocity agreements allow licensees from another state to skip some or
all of the Illinois pre-licensing requirements when applying for Illinois licensure.
Question 7
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
Answer: D
Rationale: The designated agent's name must be disclosed to satisfy the state's
designated agency disclosure requirements.
Question 8
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
Answer: C
pg. 3
, Rationale: Removing a large amount of carpet requires a major repair, which is paid
for out of the security deposit.
Question 9
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 can't be charged any fees.
D) Escrow accounts are insured by the state.
Answer: A
Rationale: 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.
Question 10
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
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.
Answer: C
Rationale: 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.
Question 11
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?
pg. 4
