Illinois Real Estate Exam
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Question 1 of 5.
While showing an apartment, the licensee learns that numerous tenants in the building have complained about a tenant who has loud parties and visitors late at night. Which of the following is the most appropriate action for the licensee?
A. Schedule a meeting with the tenant's association.
B. Suggest the complaining tenants call law enforcement.
C. Inform the manager of the brokerage firm.
D. Talk to the tenant about their allegations.
Explanation: The licensee should report the issue to their brokerage manager for guidance, as it may involve legal or management issues. Choice A is inappropriate as it’s not the licensee’s role. Choice B shifts responsibility improperly. Choice D risks escalating the situation without proper authority.
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.