1. The seller prepaid $4,320 in property taxes for the calendar year. Closing is April 20, and the seller owns the day of closing. Using a 360-day year (30-day months), what is the proration?
Answer & explanation
Answer: B. Daily = $4,320 / 360 = $12. Seller owned Jan 1-Apr 20 = 3 months + 20 days = 110 days, so the buyer owes for 360 - 110 = 250 days. 250 x $12 = $3,000, credited to the seller (who prepaid) and debited to the buyer.
2. A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:
Answer & explanation
Answer: D. Specific performance compels the breaching party to perform; it is available because land is unique. The buyer could alternatively seek monetary damages.
3. Who holds legal and equitable title to real estate held in an Illinois land trust?
Answer & explanation
Answer: A. The trustee holds both legal and equitable title, while the beneficiary retains control, possession and income through the trust agreement.
4. An Illinois licensee is not liable for failing to disclose that:
Answer & explanation
Answer: A. Section 15-20 bars any cause of action for failing to disclose that an occupant had HIV or another medical condition. Known latent physical defects must be disclosed under Section 15-25.
5. A special warranty deed warrants title only against defects that:
Answer & explanation
Answer: D. Special (limited) warranty deeds protect only against problems created during the grantor's ownership; general warranty deeds cover the entire history.
6. The Illinois Real Estate Recovery Fund compensates aggrieved persons for:
Answer & explanation
Answer: D. Section 20-85 limits recovery to actual cash losses (not market-value losses) resulting from a licensee's act or omission, after a valid judgment and post-judgment order.
7. A property manager owes fiduciary duties primarily to the:
Answer & explanation
Answer: D. The property manager is the owner's (general) agent and owes fiduciary duties to the owner, while dealing honestly with tenants.
8. Which is the most common and desirable way a real estate sales contract terminates?
Answer & explanation
Answer: C. Contracts ideally end by performance. They can also end by mutual agreement, impossibility, operation of law, or breach.
9. What is the maximum an individual aggrieved person may recover from the Illinois Real Estate Recovery Fund?
Answer & explanation
Answer: D. 68 Ill. Adm. Code 1450.945 allows up to $50,000 per aggrieved person plus costs and fees; $300,000 is the cap on liability arising from one licensee's activities in a single transaction or set of facts.
10. Which deed is exempt from the Illinois state transfer tax?
Answer & explanation
Answer: A. 35 ILCS 200/31-45(e) exempts deeds where actual consideration is less than $100. Ordinary sales for value are taxable.
11. The four elements that must all be present for real property to have value are summarized by the acronym DUST, which stands for:
Answer & explanation
Answer: D. Value requires Demand, Utility, Scarcity and Transferability.
12. The subject property has a garage; a comparable that sold for $300,000 does not. The garage is worth $15,000. The adjusted value of the comparable is:
Answer & explanation
Answer: A. Adjust the comparable, never the subject. The subject is superior, so add $15,000 to the comp: $315,000.
13. The reasonably probable use of a property that is legally permissible, physically possible, financially feasible and maximally productive is its:
Answer & explanation
Answer: B. Highest and best use is the use producing the greatest value that meets the four tests.
14. Which property is exempt from the Illinois Radon Awareness Act's seller disclosure requirement?
Answer & explanation
Answer: C. Section 20 exempts dwelling units located on the third story or higher above ground level, including condominium units.
15. A building has a no-pets policy. An applicant who is blind has a guide dog. The property manager must:
Answer & explanation
Answer: B. Fair housing law requires reasonable accommodations for persons with disabilities, including service animals despite no-pet rules.
16. Recording a deed in the county records primarily serves to:
Answer & explanation
Answer: B. Recording provides public (constructive) notice, protecting the owner's interest against later claims.
17. A property owner who wants to deviate from a zoning requirement (e.g., a setback) would seek a:
Answer & explanation
Answer: C. A variance grants relief from a specific zoning requirement; a setback deviation is an area variance. A building permit only authorizes construction that complies with the rules.
18. A downstate home has a fair cash value of $240,000. It is assessed at 33 1/3%, the equalization factor is 1.0, the owner claims a $6,000 general homestead exemption, and the tax rate is 8%. What is the tax?
Answer & explanation
Answer: A. Assessed value = $240,000 / 3 = $80,000. EAV = $80,000 x 1.0 = $80,000. Taxable EAV = $80,000 - $6,000 = $74,000. Tax = $74,000 x 0.08 = $5,920. $6,400 omits the exemption.
19. A built-in dishwasher attached to the cabinetry is best classified as:
Answer & explanation
Answer: C. Once personal property is permanently attached to real estate it becomes a fixture and is treated as real property. A trade fixture is installed by a tenant for business use, which is not the case here.
20. The government's power to take private property for public use with just compensation is:
Answer & explanation
Answer: D. Eminent domain (exercised through condemnation) allows taking for public use with just compensation. Escheat applies when an owner dies without a will or heirs.
21. Which deed provides the GREATEST protection to the grantee?
Answer & explanation
Answer: B. A general warranty deed contains the fullest covenants, warranting title against all defects, including those arising before the grantor owned it.
22. An investment property with NOI of $63,000 sells for $900,000. What is the capitalization rate?
Answer & explanation
Answer: C. Cap rate = NOI / value = $63,000 / $900,000 = 0.07 = 7%.
23. Which person may perform real estate activities in Illinois for compensation without a license?
Answer & explanation
Answer: B. Section 5-20 exempts a resident manager who lives on the premises and leases that property. A manager who lives off-site does not fit the exemption, and hosting open houses or marketing for a percentage fee are licensed activities.
24. A buyer purchases a home for $300,000 and takes title subject to the seller's existing $120,000 mortgage, which remains outstanding. What is the state transfer tax?
Answer & explanation
Answer: B. Section 31-10 excludes the outstanding balance of a mortgage the property is transferred subject to. Taxable value = $300,000 - $120,000 = $180,000. $180,000 / $500 = 360 units. 360 x $0.50 = $180.00.
25. Under the Illinois Radon Awareness Act, a seller of residential property must:
Answer & explanation
Answer: C. Section 10 requires the IEMA pamphlet and the Disclosure of Information on Radon Hazards before the buyer is obligated under a contract. The Act does not require testing or mitigation.
Sources
Source verification pending. Confirm current requirements with your state regulator.