Free Illinois State Law Practice Test — LicenseIQ

Question 1

Which deed is exempt from the Illinois state transfer tax?

Accepted Answer

35 ILCS 200/31-45(e) exempts deeds where actual consideration is less than $100. Ordinary sales for value are taxable.

Question 2

Which statement about FHA-insured loans is correct?

Accepted Answer

FHA loans are made by approved lenders and insured by FHA, with down payments as low as 3.5% and mortgage insurance premium (MIP) required on all FHA loans, for 1-4 family homes.

Question 3

Mixing client trust funds with the broker's own business funds is:

Accepted Answer

Commingling client/escrow funds with the broker's operating funds is prohibited and grounds for discipline. Using those funds for personal purposes is conversion.

Question 4

On a closing statement, the purchase price is a:

Accepted Answer

The seller receives the price (credit); the buyer owes it (debit).

Question 5

According to the Illinois License Act, payment of compensation by a seller to a buyer's broker:

Accepted Answer

Section 15-40 states that payment or promise of payment of compensation does not determine whether an agency relationship has been created.

Question 6

A candidate completed pre-license education in January 2024 and has not yet taken the exam. What is the latest she can use that education?

Accepted Answer

Under Section 5-35, approved pre-license education is valid for 2 years after completion. The one-year period applies to a passing exam score. Four failures trigger a retake requirement but do not extend the two-year validity.

Question 7

An Illinois broker prepares a broker price opinion for a lender. Which statement is required?

Accepted Answer

Section 10-45 requires a BPO or CMA to be in writing and to include, among other items, a statement that it is not an appraisal of the property.

Question 8

Under the Truth in Lending Act (Regulation Z), which phrase in an ad is a 'trigger term' requiring full credit disclosures?

Accepted Answer

Specific terms like the down payment amount, number or amount of payments, finance charge or repayment period trigger full disclosure (including APR). General statements do not.

Question 9

A landlord intends to deduct damage from a tenant's deposit. The itemized statement of damage must be delivered within:

Accepted Answer

The Act requires the itemized statement within 30 days after the tenant vacates. If no statement is given, the full deposit must be returned within 45 days.

Question 10

When must a licensee acting as a designated agent give the client written disclosure of the designated agency relationship?

Accepted Answer

Section 15-35(a) requires written disclosure of the designated agency relationship and the names of the designated agents no later than when the licensee begins working as a designated agent.

Question 11

Which is a requirement for an Illinois managing broker license?

Accepted Answer

Section 5-28 requires the applicant to be at least 20, to have been licensed as a broker for at least 2 consecutive years of the preceding 3, to complete 165 total hours of education, and to pass the exam. There is no transaction-count requirement.

Question 12

A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?

Accepted Answer

Total = $520,000 x 0.05 = $26,000. Buyer broker gets 2.5% = $13,000, leaving $13,000 for the listing side. Salesperson = $13,000 x 0.60 = $7,800.

Question 13

Two brokerages agree that one will work only on the east side of town and the other only on the west side. This is:

Accepted Answer

Dividing territories or customers among competitors eliminates competition and is illegal market allocation.

Question 14

Which statement about dual agency is correct?

Accepted Answer

Dual agency creates an inherent conflict; with informed written consent, the agent provides limited representation and must keep each party's confidences.

Question 15

A landlord held a $1,200 security deposit and, in bad faith, failed to return it or send an itemized statement. A court may award the tenant:

Accepted Answer

The Act makes a landlord who fails to provide the statement or acts in bad faith liable for twice the deposit due: 2 x $1,200 = $2,400, plus court costs and reasonable attorney fees.

Question 16

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:

Accepted Answer

Specific performance compels the breaching party to perform; it is available because land is unique. The buyer could alternatively seek monetary damages.

Question 17

A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?

Accepted Answer

Rate = commission / sale price = $15,750 / $450,000 = 0.035 = 3.5%.

Question 18

Which activity may an unlicensed assistant generally perform?

Accepted Answer

Unlicensed staff may perform clerical tasks like typing licensee-prepared ads, but may not compose ads, negotiate or show property.

Question 19

Two brokers agree not to cooperate with a discount brokerage in order to drive it out of business. This is:

Accepted Answer

Agreeing with competitors to refuse to deal with another business is an illegal group boycott.

Question 20

In a lease, the tenant holds a ____ estate and the landlord holds a ____.

Accepted Answer

The lessee has a leasehold (non-freehold) estate; the lessor retains the leased fee interest plus the reversion.

Question 21

What happens after a broker candidate fails the Illinois licensing exam four consecutive times?

Accepted Answer

Section 5-35 requires a candidate who fails four consecutive times to repeat the pre-license education; the next attempt is treated as a first attempt. There is no one-year bar or 15-hour remedial course in the statute.

Question 22

A real estate licensee who is not an attorney may:

Accepted Answer

Licensees may complete attorney-prepared forms but may not draft contracts, amendments or addenda or give legal advice - that is the unauthorized practice of law.

Question 23

Which task may an unlicensed personal assistant perform for an Illinois broker?

Accepted Answer

Unlicensed assistants may perform clerical tasks. Showing property, hosting open houses in place of a licensee, and negotiating are licensed activities.

Question 24

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)

Question 25

When an owner dies with no will and no heirs, the property passes to the state through:

Accepted Answer

Escheat transfers ownerless property to the state when there is no will and no heirs.

Illinois real estate state law practice test

1. Which deed is exempt from the Illinois state transfer tax?

2. Which statement about FHA-insured loans is correct?

3. Mixing client trust funds with the broker's own business funds is:

4. On a closing statement, the purchase price is a:

5. According to the Illinois License Act, payment of compensation by a seller to a buyer's broker:

6. A candidate completed pre-license education in January 2024 and has not yet taken the exam. What is the latest she can use that education?

7. An Illinois broker prepares a broker price opinion for a lender. Which statement is required?

8. Under the Truth in Lending Act (Regulation Z), which phrase in an ad is a 'trigger term' requiring full credit disclosures?

9. A landlord intends to deduct damage from a tenant's deposit. The itemized statement of damage must be delivered within:

10. When must a licensee acting as a designated agent give the client written disclosure of the designated agency relationship?

11. Which is a requirement for an Illinois managing broker license?

12. A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?

13. Two brokerages agree that one will work only on the east side of town and the other only on the west side. This is:

14. Which statement about dual agency is correct?

15. A landlord held a $1,200 security deposit and, in bad faith, failed to return it or send an itemized statement. A court may award the tenant:

16. 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:

17. A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?

18. Which activity may an unlicensed assistant generally perform?

19. Two brokers agree not to cooperate with a discount brokerage in order to drive it out of business. This is:

20. In a lease, the tenant holds a estate and the landlord holds a .

21. What happens after a broker candidate fails the Illinois licensing exam four consecutive times?

22. A real estate licensee who is not an attorney may:

23. Which task may an unlicensed personal assistant perform for an Illinois broker?

24. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

25. When an owner dies with no will and no heirs, the property passes to the state through:

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