ILLINOIS REAL ESTATE EXAM 2026
Questions and Answers
Confidential Information - Correct answer-All information the client directs to be
confidential, which, if disclosed, would have an adverse effect on the client's
position.
Latent Defect - Correct answer-A defect that is not visible or apparent; a hidden
defect that would not be discovered in a reasonably thorough inspection of
property.
Disclosures - Correct answer-Points or facts that must be revealed
Stigmatized Property - Correct answer-A property is undesirable to most people
because of a past event (often a crime or environmental hazard).
Designated Agency - Correct answer-A contractual relationship between a broker
and a client in which one or more licensees associated with the broker are
appointed to represent the client in an in-house transaction.
Patent Defect - Correct answer-A visible, apparent defect that can be seen in a
reasonably thorough inspection of property. COMPARE: Latent Defect.
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,Illinois Radon Awareness Act - Correct answer-Legislation that requires a seller to
provide to a buyer, before the buyer is obligated under any contract to purchase
residential real property, a disclosure of information on radon hazards along with a
pamphlet entitled "radon testing guidelines for Real Estate Transactions".
Concealment - Correct answer-Occurs when a licensee fails to disclose information
that is material to a decision to a party to whom the licensee has such a duty.
Material Fact - Correct answer-A piece of information that affects the value of real
property and is relevant to a person making a decision about that property.
Actual Fraud - Correct answer-This is an intentional misrepresentation or
concealment of a material fact. Actual fraud occurs when a person actively hides
information or makes statements known to be false or misleading. When any of
these are done with intent to deceive, they constitute actual fraud. (This is also
called deceit or intentional misrepresentation).
Constructive Fraud - Correct answer-This is a negligent misrepresentation or
concealment of a material fact. When information is not disclosed or false
statements are made unintentionally, it may be considered constructive fraud. Here,
the false statements or failures to disclose are the result of carelessness or
negligence, rather than an intent to deceive. This is also called negligent
misrepresentation.
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,Self-Dealing - Correct answer-When a fiduciary takes advantage of their position
in a transaction and acts in their own interests rather than in the interests of their
clients.
Collusion - Correct answer-Secret agreement or cooperation among people,
especially for deceitful or fraudulent purposes.
As-Is Clause - Correct answer-A statement in a contract that indicates the property
is being sold without warranty in its present condition at the time of the contract.
First Substantive Contact - Correct answer-An event triggering agency disclosure
(e.g., prior to entering into a listing agreement, prior to showing a property, at an
open house when a buyer displays serious interest, etc.).
Undisclosed Dual Agency - Correct answer-A situation where one licensee
represents both buyer and seller in a single transaction without the informed
consent of both parties; very often may be practiced unintentionally, possibly by
implying to one party that he is represented when, in fact, there is no agency
agreement. This is illegal in all 50 states.
Illinois Residential Real Property Disclosure Report - Correct answer-A
standardized form that sellers of residential property are required to complete,
identifying defects and issues related to the condition of the property for sale,
including its improvements and fixtures, to the best of the seller's knowledge.
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, Informed Consent - Correct answer-Written evidence that a client is aware of and
has given permission to an agent to perform a specific action or take on a specific
role in the client-agent relationship.
Real Estate Recovery Fund - Correct answer-Provides funds to compensate injured
parties who have obtained a court judgment against an insolvent licensed
salesperson or broker.
Inactive - Correct answer-License status of any salesperson who returns his or her
license to Division of Real Estate to pursue non-real estate activities. License may
remain inactive indefinitely if it is renewed each year and continuing education
requirements are met.
Broker - Correct answer-One who is licensed to represent another (the principal) in
a real estate transaction; a person authorized to represent the principal in dealings
with third parties (clients or customers).
Illinois Department of Financial and Professional Regulation (IDFPR) - Correct
answer-The entity responsible for administering and enforcing the Illinois Real
Estate License Act of 2000
Sponsoring Broker - Correct answer-The broker who has issued a sponsor card to a
licensed broker or a leasing agent.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
Questions and Answers
Confidential Information - Correct answer-All information the client directs to be
confidential, which, if disclosed, would have an adverse effect on the client's
position.
Latent Defect - Correct answer-A defect that is not visible or apparent; a hidden
defect that would not be discovered in a reasonably thorough inspection of
property.
Disclosures - Correct answer-Points or facts that must be revealed
Stigmatized Property - Correct answer-A property is undesirable to most people
because of a past event (often a crime or environmental hazard).
Designated Agency - Correct answer-A contractual relationship between a broker
and a client in which one or more licensees associated with the broker are
appointed to represent the client in an in-house transaction.
Patent Defect - Correct answer-A visible, apparent defect that can be seen in a
reasonably thorough inspection of property. COMPARE: Latent Defect.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Illinois Radon Awareness Act - Correct answer-Legislation that requires a seller to
provide to a buyer, before the buyer is obligated under any contract to purchase
residential real property, a disclosure of information on radon hazards along with a
pamphlet entitled "radon testing guidelines for Real Estate Transactions".
Concealment - Correct answer-Occurs when a licensee fails to disclose information
that is material to a decision to a party to whom the licensee has such a duty.
Material Fact - Correct answer-A piece of information that affects the value of real
property and is relevant to a person making a decision about that property.
Actual Fraud - Correct answer-This is an intentional misrepresentation or
concealment of a material fact. Actual fraud occurs when a person actively hides
information or makes statements known to be false or misleading. When any of
these are done with intent to deceive, they constitute actual fraud. (This is also
called deceit or intentional misrepresentation).
Constructive Fraud - Correct answer-This is a negligent misrepresentation or
concealment of a material fact. When information is not disclosed or false
statements are made unintentionally, it may be considered constructive fraud. Here,
the false statements or failures to disclose are the result of carelessness or
negligence, rather than an intent to deceive. This is also called negligent
misrepresentation.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,Self-Dealing - Correct answer-When a fiduciary takes advantage of their position
in a transaction and acts in their own interests rather than in the interests of their
clients.
Collusion - Correct answer-Secret agreement or cooperation among people,
especially for deceitful or fraudulent purposes.
As-Is Clause - Correct answer-A statement in a contract that indicates the property
is being sold without warranty in its present condition at the time of the contract.
First Substantive Contact - Correct answer-An event triggering agency disclosure
(e.g., prior to entering into a listing agreement, prior to showing a property, at an
open house when a buyer displays serious interest, etc.).
Undisclosed Dual Agency - Correct answer-A situation where one licensee
represents both buyer and seller in a single transaction without the informed
consent of both parties; very often may be practiced unintentionally, possibly by
implying to one party that he is represented when, in fact, there is no agency
agreement. This is illegal in all 50 states.
Illinois Residential Real Property Disclosure Report - Correct answer-A
standardized form that sellers of residential property are required to complete,
identifying defects and issues related to the condition of the property for sale,
including its improvements and fixtures, to the best of the seller's knowledge.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Informed Consent - Correct answer-Written evidence that a client is aware of and
has given permission to an agent to perform a specific action or take on a specific
role in the client-agent relationship.
Real Estate Recovery Fund - Correct answer-Provides funds to compensate injured
parties who have obtained a court judgment against an insolvent licensed
salesperson or broker.
Inactive - Correct answer-License status of any salesperson who returns his or her
license to Division of Real Estate to pursue non-real estate activities. License may
remain inactive indefinitely if it is renewed each year and continuing education
requirements are met.
Broker - Correct answer-One who is licensed to represent another (the principal) in
a real estate transaction; a person authorized to represent the principal in dealings
with third parties (clients or customers).
Illinois Department of Financial and Professional Regulation (IDFPR) - Correct
answer-The entity responsible for administering and enforcing the Illinois Real
Estate License Act of 2000
Sponsoring Broker - Correct answer-The broker who has issued a sponsor card to a
licensed broker or a leasing agent.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
