ILLINOIS REAL ESTATE BROKER PSI EXAM Q&A
2026 STUDY GUIDE GRADED A+
◉To qualify as tax-deferred exchange, the property must be Answer:
held for productive use in trade or business
◉A buyer wants a guarantee that there are no unknown encumbrances
against the property he is buying. The buyer should require Answer:
Title Insurance
◉John Jones has owned and operated a gas station for 15 years. The city
has decided to rezone the area from commercial to residential use.
Which of the following is true regarding this situation? Answer: John
has non conforming use and can continue to operate the gas station
◉Regarding ownership of one's home, which of the following would be
income tax deductible? Answer: Points paid to obtain the loan
◉A broker, acting as a buyer's agent, is helping a married couple find a
home that meets their needs. The wife's mother is going to live with
them. They want to take title in such a way that if anything happens to
either one of them, the remaining spouse would have a % interest in the
,property and the mother a 1% interest. The broker should advise them
to: Answer: Consult with an attorney
◉Which of the following factors would tend to increase the price of
residential real estate in a given area? Answer: A large manufacturing
plant opening in the city
◉Which of the following is considered a tax benefit of owning
investment property? Answer: Sheltering other income
◉Which of the following improvements would have the most positive
effect on the value of a property? Answer: Installing a second bathroom
in a four bedroom house
◉A broker was hired by a property manager to lease and manage
properties. Each lease was different based on negotiations of the parties.
Which of the following is true in these circumstances? Answer: Legal
counsel should be sought to write or review the lease
◉A buyer gives a broker a deposit with an offer to purchase. The deposit
is known as Answer: Earnest money
◉A property has suffered a loss in value due to lack of maintenance and
upkeep. This would classify as Answer: physical depreciation
, ◉The most important element for a property manager to consider in
selecting rental rates would be Answer: the rental rates for similar units
in the area
◉Which of the following is considered the most important factor
affecting value? Answer: Location
◉Which of the following is a requirement of an independent contractor
relationship between a broker and a licensee. Answer: The licensee
must enter into a written agreement with the broker
◉A comparative market analysis is based on the principle that Answer:
the anticipated selling price may be estimated by recent sales of similar
properties
◉A broker is listing a rural property. The property was owned by a
deceased woman who has 6 children. 2 of the children put up the house
for sale. Before completing the listing agreement, the broker should:
Answer: Check the ownership of record
◉Which of the following would most directly affect the supply of real
estate int he market place? Answer: Labor force
◉Which of the following is considered a primary lender in the mortgage
market? Answer: Commercial Banks
2026 STUDY GUIDE GRADED A+
◉To qualify as tax-deferred exchange, the property must be Answer:
held for productive use in trade or business
◉A buyer wants a guarantee that there are no unknown encumbrances
against the property he is buying. The buyer should require Answer:
Title Insurance
◉John Jones has owned and operated a gas station for 15 years. The city
has decided to rezone the area from commercial to residential use.
Which of the following is true regarding this situation? Answer: John
has non conforming use and can continue to operate the gas station
◉Regarding ownership of one's home, which of the following would be
income tax deductible? Answer: Points paid to obtain the loan
◉A broker, acting as a buyer's agent, is helping a married couple find a
home that meets their needs. The wife's mother is going to live with
them. They want to take title in such a way that if anything happens to
either one of them, the remaining spouse would have a % interest in the
,property and the mother a 1% interest. The broker should advise them
to: Answer: Consult with an attorney
◉Which of the following factors would tend to increase the price of
residential real estate in a given area? Answer: A large manufacturing
plant opening in the city
◉Which of the following is considered a tax benefit of owning
investment property? Answer: Sheltering other income
◉Which of the following improvements would have the most positive
effect on the value of a property? Answer: Installing a second bathroom
in a four bedroom house
◉A broker was hired by a property manager to lease and manage
properties. Each lease was different based on negotiations of the parties.
Which of the following is true in these circumstances? Answer: Legal
counsel should be sought to write or review the lease
◉A buyer gives a broker a deposit with an offer to purchase. The deposit
is known as Answer: Earnest money
◉A property has suffered a loss in value due to lack of maintenance and
upkeep. This would classify as Answer: physical depreciation
, ◉The most important element for a property manager to consider in
selecting rental rates would be Answer: the rental rates for similar units
in the area
◉Which of the following is considered the most important factor
affecting value? Answer: Location
◉Which of the following is a requirement of an independent contractor
relationship between a broker and a licensee. Answer: The licensee
must enter into a written agreement with the broker
◉A comparative market analysis is based on the principle that Answer:
the anticipated selling price may be estimated by recent sales of similar
properties
◉A broker is listing a rural property. The property was owned by a
deceased woman who has 6 children. 2 of the children put up the house
for sale. Before completing the listing agreement, the broker should:
Answer: Check the ownership of record
◉Which of the following would most directly affect the supply of real
estate int he market place? Answer: Labor force
◉Which of the following is considered a primary lender in the mortgage
market? Answer: Commercial Banks
