Illinois Real Estate Practice Exam
Questions and Verified Correct Answers
After paying the brokers fee of 6%, a seller want to net $180,000 from the sale of his house.
What must the property sell for to satisfy both the eh broker and the seller? answer - 100%-
6%=94%=.94
180,000 / .94 = 191489
A property owner constructed a commercial building on the property. Three years later an
ordinance was passed prohibiting commercial buildings in the owners area: answer - The
building is a nonconforming use
Servient Tenement answer - The owner of a parcel of land holds an easement right over an
adjoining parcel of land. The parcel of land on which the easement runs is referred to as the:
Dominant Tenement answer - Benefits from the servient tenement
What is the amount of real estate tax due on a property with a market value of $140,000 if it is
assessed at 30% of market value, has an equalizer of 1.5, and a tax rate of $5.00 per $100.00 of
assessed value? answer - 140,000 x .30 = 42,000
42,000 x 1.5 = 63,000
63,000 x .05 = 3150
Easements answer - Are rights of way on someone else's land
,Easement By Necessity answer - A property owner subdivided a piece of property, selling the
front half and retaining the back half. The back half of the property retained by the owner does
not have access to any roads. The type of easement the courts might grant in this situation is
Easement In Gross answer - Utilities
Easement By Prescription answer - Trespassers rights due for a period of time you earn 20 years
Easement Appurtenant answer - For adjacent properties it's a right
Personal Easement In Gross answer - Individual access to property not transferable only till
alive
Adverse Possession answer - Squatter Rights 20 years to earn it
License answer - Personal privilege last for specific period of time
A property manager defaulted on a mortgage and the lender foreclosed on the property. The
property sold at the foreclosure sale for less than the loan balance. To recover the remainder of
the money, the lender may: answer - Obtain a deficiency judgement
On Wednesday, Sam offers to sell his house to Beau for $220,000. On Sunday, Beau makes a
counter offer of $210,000. On Friday, Beau withdraws the counter offer of $210,000 and accepts
Sam's offer of $220,000. In this situation, there is: answer - No valid agreement because Beau's
counteroffer ended Sam's offer
(Just change one aspect and you kill the contract)
Graduated Payment Loan answer - Amount goes up after period of time
, Package Loan answer - A home buyer obtains a loan to finance the purchase of the house as
well as personal property
Blanket Loan answer - One loan secures multiple properties
Wraparound Loan answer - New loan pays off old loan
Granting Clause answer - Is a requirement for a valid deed
(Signature of grantor is needed in Illinois)
An investor purchase an apartment building for $360,000 by paying 10% down and financing
the rest of the purchase price. The lender charge two points as a loan origination fee. How
much was the investor charge for the fee? answer - 360,000 x .90 = 324,000
324,000 x .02 = 6480
(Discount points are figured on loan & points are 1% of loan amount)
A 55%/45% commission split is agreed to by a selling and listing brokerages. They then split
their share of the commission evenly wit their salespeople. If a house sells for $190,000 and the
commission rate is 6%, how much commission will the selling agent receive? answer - 190,000
x .06 = 11400
11400 x .55 = 6270
6270 x .50 = 3135
Using the income approach to value, what is the value of an apartment building if it has gross
income of $60,000, operating expenses of $10,000 and a capitalization rate of 8%? answer -
60,000 - 10,000 = 50,000
50,000/.08 = 625,000
Questions and Verified Correct Answers
After paying the brokers fee of 6%, a seller want to net $180,000 from the sale of his house.
What must the property sell for to satisfy both the eh broker and the seller? answer - 100%-
6%=94%=.94
180,000 / .94 = 191489
A property owner constructed a commercial building on the property. Three years later an
ordinance was passed prohibiting commercial buildings in the owners area: answer - The
building is a nonconforming use
Servient Tenement answer - The owner of a parcel of land holds an easement right over an
adjoining parcel of land. The parcel of land on which the easement runs is referred to as the:
Dominant Tenement answer - Benefits from the servient tenement
What is the amount of real estate tax due on a property with a market value of $140,000 if it is
assessed at 30% of market value, has an equalizer of 1.5, and a tax rate of $5.00 per $100.00 of
assessed value? answer - 140,000 x .30 = 42,000
42,000 x 1.5 = 63,000
63,000 x .05 = 3150
Easements answer - Are rights of way on someone else's land
,Easement By Necessity answer - A property owner subdivided a piece of property, selling the
front half and retaining the back half. The back half of the property retained by the owner does
not have access to any roads. The type of easement the courts might grant in this situation is
Easement In Gross answer - Utilities
Easement By Prescription answer - Trespassers rights due for a period of time you earn 20 years
Easement Appurtenant answer - For adjacent properties it's a right
Personal Easement In Gross answer - Individual access to property not transferable only till
alive
Adverse Possession answer - Squatter Rights 20 years to earn it
License answer - Personal privilege last for specific period of time
A property manager defaulted on a mortgage and the lender foreclosed on the property. The
property sold at the foreclosure sale for less than the loan balance. To recover the remainder of
the money, the lender may: answer - Obtain a deficiency judgement
On Wednesday, Sam offers to sell his house to Beau for $220,000. On Sunday, Beau makes a
counter offer of $210,000. On Friday, Beau withdraws the counter offer of $210,000 and accepts
Sam's offer of $220,000. In this situation, there is: answer - No valid agreement because Beau's
counteroffer ended Sam's offer
(Just change one aspect and you kill the contract)
Graduated Payment Loan answer - Amount goes up after period of time
, Package Loan answer - A home buyer obtains a loan to finance the purchase of the house as
well as personal property
Blanket Loan answer - One loan secures multiple properties
Wraparound Loan answer - New loan pays off old loan
Granting Clause answer - Is a requirement for a valid deed
(Signature of grantor is needed in Illinois)
An investor purchase an apartment building for $360,000 by paying 10% down and financing
the rest of the purchase price. The lender charge two points as a loan origination fee. How
much was the investor charge for the fee? answer - 360,000 x .90 = 324,000
324,000 x .02 = 6480
(Discount points are figured on loan & points are 1% of loan amount)
A 55%/45% commission split is agreed to by a selling and listing brokerages. They then split
their share of the commission evenly wit their salespeople. If a house sells for $190,000 and the
commission rate is 6%, how much commission will the selling agent receive? answer - 190,000
x .06 = 11400
11400 x .55 = 6270
6270 x .50 = 3135
Using the income approach to value, what is the value of an apartment building if it has gross
income of $60,000, operating expenses of $10,000 and a capitalization rate of 8%? answer -
60,000 - 10,000 = 50,000
50,000/.08 = 625,000
