Illinois Real Estate Practice Exam
Questions and Answers
Guaranteed Success
1. Objectives of Federal Reserve System
Answer> To counteract inflationary and defla- tionary trends, to create a favorable
economic climate, to maintain sound credit conditions but NOT to control the
secondary mortgage market
2. Remainder Interest
Answer> A fee simple holder of a parcel of real estate grants a life estate to her
daughter and stipulates that upon the daughters death, the property will pass to
her grandson. The second estate is called
3. A property buyer obtains a term loan to finance a home purchase.
Answer> The entire loan principal is due at the end of the loan period
4. Best evidence of marketable title
Answer> Title Insurance
5. Balloon Loan
Answer> A borrower has a mortgage loan that requires monthly payments of
,$936.25 for 10 years and a final payment of $136,287. Type of loan?
6. Commingling
Answer> Brokers should deposit all earnest money checks they receive into an
escrow account or trust account to prevent being accused.
7. Conversion
Answer> Fancy name for theft
8. Puffing
Answer> Exaggeration of a fact it is legal as long as it doesn't come in as a fraud
9. In performing an appraisal of real estate, the appraiser
Answer> Estimates the prop- erty's market value
10. Local zoning ordinances are used to regulate
Answer> Allowable uses for buildings, building heights, population density NOT
rules for the conducting open spaces
11. 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
12. 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
13. 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
14. 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
15. Easements
Answer> Are rights of way on someone else's land
16. 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
17. Easement In Gross
Answer> Utilities
18. Easement By Prescription
Answer> Trespassers rights due for a period of time you earn 20 years
19. Easement Appurtenant
Answer> For adjacent properties it's a right
20. Personal Easement In Gross
Answer> Individual access to property not transferable only till alive
21. Adverse Possession
Answer> Squatter Rights 20 years to earn it
22. License
Answer> Personal privilege last for specific period of time
23. 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
24. 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
Questions and Answers
Guaranteed Success
1. Objectives of Federal Reserve System
Answer> To counteract inflationary and defla- tionary trends, to create a favorable
economic climate, to maintain sound credit conditions but NOT to control the
secondary mortgage market
2. Remainder Interest
Answer> A fee simple holder of a parcel of real estate grants a life estate to her
daughter and stipulates that upon the daughters death, the property will pass to
her grandson. The second estate is called
3. A property buyer obtains a term loan to finance a home purchase.
Answer> The entire loan principal is due at the end of the loan period
4. Best evidence of marketable title
Answer> Title Insurance
5. Balloon Loan
Answer> A borrower has a mortgage loan that requires monthly payments of
,$936.25 for 10 years and a final payment of $136,287. Type of loan?
6. Commingling
Answer> Brokers should deposit all earnest money checks they receive into an
escrow account or trust account to prevent being accused.
7. Conversion
Answer> Fancy name for theft
8. Puffing
Answer> Exaggeration of a fact it is legal as long as it doesn't come in as a fraud
9. In performing an appraisal of real estate, the appraiser
Answer> Estimates the prop- erty's market value
10. Local zoning ordinances are used to regulate
Answer> Allowable uses for buildings, building heights, population density NOT
rules for the conducting open spaces
11. 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
12. 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
13. 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
14. 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
15. Easements
Answer> Are rights of way on someone else's land
16. 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
17. Easement In Gross
Answer> Utilities
18. Easement By Prescription
Answer> Trespassers rights due for a period of time you earn 20 years
19. Easement Appurtenant
Answer> For adjacent properties it's a right
20. Personal Easement In Gross
Answer> Individual access to property not transferable only till alive
21. Adverse Possession
Answer> Squatter Rights 20 years to earn it
22. License
Answer> Personal privilege last for specific period of time
23. 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
24. 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
