Illinois Real Estate Exam
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Question 1 of 5.
An Illinois sponsored licensee acting as a buyer’s agent has prepared an offer for the client and delivered it to the listing agent. After presenting the offer to the seller, the listing agent calls the buyer’s agent and says the seller would accept the offer if the brokerage fee were reduced by $1000. The listing agent is willing to reduce their share by $500 and asks the buyer’s agent to do the same. Which of the following is the best action for the buyer’s agent to take?
A. Write a check for $500 payable to the seller
B. Write a check for $500 payable to the buyer
C. Discuss the issue with the designated managing broker
D. Show the buyer alternative properties.
Explanation: The buyer’s agent should consult their managing broker to ensure ethical handling of the fee reduction request. Choices A, B, and D are inappropriate.
Question 2 of 5.
A feature of joint tenancy with survivorship is that
A. it provides for the disposition of personal possessions.
B. a corporation can be a joint tenant.
C. the surviving joint tenant(s) acquire the property free and clear of any liens against the deceased.
D. it eliminates probate.
Explanation: Joint tenancy with survivorship means that upon the death of one tenant, their interest automatically passes to the surviving tenant(s), bypassing probate. Choice A is incorrect because joint tenancy deals with real property, not personal possessions. Choice B is incorrect as corporations cannot be joint tenants due to their perpetual existence. Choice C is incorrect because liens against the deceased may still affect the property.
Question 3 of 5.
What type of mortgage loan is likely to be tied to a publicly available index that is mutually acceptable to the lender and the borrower?
A. Renegotiable rate mortgage.
B. Graduated payment mortgage.
C. Adjustable rate mortgage.
D. Freddie Mac.
Explanation: An adjustable rate mortgage (ARM) has an interest rate tied to a publicly available index, which adjusts periodically. Choice A is incorrect because renegotiable rate mortgages are less common and not specifically tied to public indexes. Choice B is incorrect as graduated payment mortgages have fixed rates with increasing payments. Choice D is incorrect because Freddie Mac is not a loan type but a government-sponsored entity.
Question 4 of 5.
An owner has decided to sell a home. The home currently has a one-car garage. All the recent sales comps in the neighborhood have two-car garages. After checking with contractors, the owner finds that expanding the garage to accommodate a second car would cost $12,000. When performing a comparative market analysis for this property, a broker would make what kind of an adjustment?
A. Add to the value of the owner's home.
B. Subtract from the value of owner's home.
C. Add to the sales price of recent sales comps.
D. Subtract from the sales price of recent sales comps.
Explanation: In a comparative market analysis, the subject property (with a one-car garage) is less desirable than comps with two-car garages. Thus, its value is adjusted downward by the cost of adding a second garage ($12,000). Choice A is incorrect because adding to the value would overstate the property’s worth. Choices C and D are incorrect as adjustments are made to the subject property’s value, not the comps’ sales prices.
Question 5 of 5.
Which of the following items would be prorated at closing with the credit going to the seller?
A. accrued interest on an assumed mortgage
B. prepaid property taxes
C. earnest money
D. unearned rent collected in advance
Explanation: Prepaid property taxes are a seller’s expense already paid for a period extending beyond the closing date, so the seller receives a credit for the unused portion. Choice A is incorrect because accrued interest is a buyer’s responsibility. Choice C is incorrect as earnest money is not prorated but held in escrow. Choice D is incorrect because unearned rent benefits the buyer, not the seller.
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