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Free Illinois Real Estate Managing Broker Examination — State Portion Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the Illinois Real Estate Managing Broker Examination — State Portion practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1An Illinois company offers, for a fee, to negotiate apartment leases for several unrelated owners. What licensing conclusion should its managing broker reach?

    1. A. The activity requires an Illinois real estate license
    2. B. Only a leasing permit is needed if every lease is residential
    3. C. No license is needed if compensation is paid after occupancy
    4. D. No license is needed unless the company also collects rent

    Answer: A

    Explanation: The Broker definition includes a person who "Negotiates, offers, attempts, or agrees to negotiate the sale, exchange, purchase, rental, or leasing of real estate." Because the company performs that activity for others for compensation, a license is required.

    Reference: Illinois General Assembly - FullText Real Estate License Act of 2000. — Section 1-10, definition of Broker (225 ILCS 454)

  2. 2A buyer asks whether an occupant of an Illinois home previously had HIV. The licensee has no information about a physical property defect. What disclosure duty applies?

    1. A. The licensee has no statutory duty to disclose that fact
    2. B. The licensee must disclose it before showing the home
    3. C. The licensee must disclose it only in writing at closing
    4. D. The licensee must obtain the seller's medical authorization

    Answer: A

    Explanation: Section 15-20 says, "No cause of action shall arise against a licensee for the failure to disclose" that an occupant had HIV or another medical condition. It is not a physical-property defect requiring disclosure here.

    Reference: Illinois General Assembly - FullText Real Estate License Act of 2000. — Section 15-20(c) (225 ILCS 454)

  3. 3What is the basic effect of the Illinois homestead exemption when a qualifying residence is subject to judgment enforcement?

    1. A. It protects a statutory amount of equity rather than eliminating every lien
    2. B. It transfers title automatically to the county
    3. C. It converts the property into a condominium
    4. D. It prevents the owner from selling voluntarily

    Answer: A

    Explanation: The statute says, "Every individual is entitled to an estate of homestead" to the stated value in qualifying occupied property. It protects a statutory equity amount rather than eliminating every lien.

    Reference: Illinois General Assembly — Section 12-901 et seq. (735 ILCS 5)

  4. 4A licensee holds a beneficial interest in an Illinois land trust that owns property the licensee is selling. How should the ownership be handled?

    1. A. Disclose the licensee's status and interest in writing before initiating the transaction
    2. B. Treat the interest as invisible because legal title is in the trustee
    3. C. Disclose only if the trust is revocable
    4. D. Wait until recording the deed to identify the interest

    Answer: A

    Explanation: The rule expressly covers a licensee who "Holds a beneficial interest in a land trust" selling or leasing the property. The licensee must disclose status and interest in writing before initiating the transaction.

    Reference: 68 Iac 1450 765 — Section 1450.765(b)

  5. 5Who remains ultimately responsible for a sponsored office's compliance after bookkeeping is delegated to a qualified accountant?

    1. A. The sponsoring broker
    2. B. The accountant alone
    3. C. Each escrow depositor
    4. D. The depository institution

    Answer: A

    Explanation: Although bookkeeping may be delegated, "Compliance with bookkeeping duties remains the responsibility of the sponsoring broker." The sponsoring broker therefore remains ultimately responsible.

    Reference: ADMINISTRATIVE CODE — Section 1450.750

  6. 6A salaried employee manages and leases only the apartment building owned by the employee's company. Which Illinois licensing treatment applies?

    1. A. The owner-employee exemption may apply to those activities
    2. B. A residential leasing agent license is always required
    3. C. A managing broker license is required because rent is collected
    4. D. A broker license is required once any lease exceeds one year

    Answer: A

    Explanation: Illinois exempts an owner's regular employee when the employee's duties concern only the owner's property. The exemption does not extend to brokerage for unrelated owners.

    Reference: Illinois General Assembly - FullText Real Estate License Act of 2000. — Section 5-20 (225 ILCS 454)

  7. 7A house was the site of a widely reported event that caused no physical or environmental effect. Must an Illinois licensee volunteer that history as a property condition?

    1. A. No, the Act excludes occurrences with no effect on the property or its environment
    2. B. Yes, whenever the event was reported publicly
    3. C. Yes, but only if the listing is exclusive
    4. D. No, unless the buyer asks after closing

    Answer: A

    Explanation: The Act removes liability for failure to disclose an act or occurrence that "had no effect on the physical condition of the property or its environment."

    Reference: Illinois General Assembly - FullText Real Estate License Act of 2000. — Section 15-20(c) (225 ILCS 454)

  8. 8An Illinois public body lawfully condemns a strip of private land for a highway. Which governmental power is being exercised?

    1. A. Eminent domain
    2. B. Escheat
    3. C. Police power
    4. D. Taxation

    Answer: A

    Explanation: The Act states that authorized public entities have "the powers of condemnation and eminent domain." A condemnation of private land for the highway exercises eminent domain.

    Reference: Illinois General Assembly - 735 ILCS 30/ Eminent Domain Act. — Section 15-1-5 (735 ILCS 30)

  9. 9How does the Illinois Residential Real Property Disclosure Act classify a residential cooperative unit?

    1. A. As residential real property within the Act's definition
    2. B. As a commercial leasehold categorically outside the Act
    3. C. As a condominium common element only
    4. D. As personal property that can never trigger disclosure

    Answer: A

    Explanation: The statutory definition of residential real property expressly includes "units in residential cooperatives." A residential cooperative unit therefore falls within that defined property category.

    Reference: FullText Residential Real Property Disclosure Act. — Section 5, Residential real property (765 ILCS 77)

  10. 10Which personal deposit may a sponsoring broker place in an escrow account without prohibited commingling?

    1. A. Only the documented minimum needed to avoid account service charges
    2. B. A reserve equal to one month's commissions
    3. C. Any amount intended for future office expenses
    4. D. The full balance of the brokerage operating account

    Answer: A

    Explanation: The permitted amount may not exceed what is needed to "maintain the account without incurring service charges." Larger operating or commission reserves would be commingling.

    Reference: 68 Iac 1450 750 — Section 1450.750(b)(5)

Topics in this practice bank

These topics describe the available practice for Illinois Real Estate Managing Broker Examination — State Portion. Review the examination outline and its sources for scope and allocation details.

  • I. Licensing Requirements
    • A. Activities requiring a license
    • B. License exemptions
    • C. Types of licenses
    • C. Types of licenses — 1. Broker
    • C. Types of licenses — 2. Managing Broker
    • C. Types of licenses — 3. Residential Leasing Agent
    • C. Types of licenses — 4. Instructor (pre-license and continuing education)
    • D. Eligibility for licensing, including sponsorship
    • E. Examination
    • F. License renewal
    • G. Post-licensing and continuing education
    • H. Change in address, name, or business information for a licensee
  • II. Illinois Real Estate License Act
    • A. Agency relationships
    • A. Agency relationships — 1. Stigmatized property issues
    • A. Agency relationships — 2. Material facts
    • B. Advertising
    • C. Sponsored licensee/sponsoring broker relationship
    • D. Brokerage agreements
    • D. Brokerage agreements — 1. Non-exclusive
    • D. Brokerage agreements — 2. Exclusive
    • D. Brokerage agreements — 2. Exclusive — a. Minimum services
    • E. Compensation requirements
    • E. Compensation requirements — 1. Contractual obligation
    • F. Interference with contracts or agreements
    • G. Licensed/Unlicensed assistants
    • H. Teams
    • H. Teams — 1. Team names
    • H. Teams — 2. Supervision
    • I. Handling of monies
    • I. Handling of monies — 1. Special accounts
    • I. Handling of monies — 2. Security deposits
    • J. Handling of documents
    • K. Disciplinary provisions
    • K. Disciplinary provisions — 1. Unprofessional conduct
    • L. Comparative market analysis (CMA)/Broker price opinion (BPO) requirements
    • M. Purchase contracts and lease agreements
    • M. Purchase contracts and lease agreements — 1. Chicago Bar Association et al vs Quinlan and Tyson inc.
    • N. Purpose of License Law
  • III. Additional Illinois Laws and Regulations Affecting Real Estate Practice
    • A. Ownership interests
    • A. Ownership interests — 1. Trusts
    • A. Ownership interests — 2. Homestead
    • A. Ownership interests — 3. Government powers
    • A. Ownership interests — 4. Co-ownership
    • A. Ownership interests — 5. Condominiums
    • A. Ownership interests — 6. Cooperatives
    • A. Ownership interests — 7. Ownership by business entities (managing broker only)
    • A. Ownership interests — 8. Deed restrictions and subdivision covenants, conditions and restrictions (CC&Rs) (managing broker only)
    • B. Performing activities exceeding the scope of real estate licensing
    • B. Performing activities exceeding the scope of real estate licensing — 1. Law
    • B. Performing activities exceeding the scope of real estate licensing — 2. Securities
    • B. Performing activities exceeding the scope of real estate licensing — 3. Illinois Business Broker Act
    • B. Performing activities exceeding the scope of real estate licensing — 4. Situations which require appraisal by a licensed or certified appraiser and brokerage-related actions that constitute unauthorized appraisal practice (managing broker only)
    • C. Transfer taxes
    • D. Transfer of title
    • D. Transfer of title — 1. Involuntary vs voluntary transfer
    • D. Transfer of title — 2. Title insurance policies and title searches (Managing Broker only)
    • D. Transfer of title — 2. Title insurance policies and title searches (Managing Broker only) — a. Owner policy and lender policy (Managing Broker only)
    • D. Transfer of title — 3. Marketable and insurable title (Managing Broker only)
    • D. Transfer of title — 4. Settlement procedures (closing) and parties involved (Managing Broker only)
    • D. Transfer of title — 5. Special issues in transferring foreclosed properties (Managing Broker only)
    • D. Transfer of title — 6. Special issues in short sale transactions (Managing Broker only)
    • D. Transfer of title — 7. Special issues in probate transactions (Managing Broker only)
    • E. Legal description/Plat Act
    • F. Real estate taxes and exemptions
    • G. Illinois Human Rights Act
    • G. Illinois Human Rights Act — 1. Fair Housing advertising rules
    • H. Illinois Assistance Animal Integrity Act
    • I. Illinois Landlord Tenant Act
    • J. Commercial Broker Lien Act
    • K. Radon Resistant Construction Act
    • L. Effect of the Statute of Frauds (managing broker only)
  • IV. Disclosures
    • A. Agency
    • A. Agency — 1. Designated agencies
    • A. Agency — 1. Designated agencies — a. Seller/landlord
    • A. Agency — 1. Designated agencies — b. Buyer/tenant
    • A. Agency — 1. Designated agencies — c. Dual
    • A. Agency — 2. Notice of no agency relationship
    • A. Agency — 3. Prohibition against transactional broker and facilitator
    • A. Agency — 4. Contemporaneous offers
    • B. Licensee status direct/indirect interest
    • C. Compensation sources
    • D. Property disclosure
    • D. Property disclosure — 1. Residential Real Property Disclosure Act
    • D. Property disclosure — 2. Material defects
    • E. Environmental and other disclosures
    • E. Environmental and other disclosures — 1. Radon
    • E. Environmental and other disclosures — 2. Lead based paint
    • E. Environmental and other disclosures — 3. Mine subsidence
    • E. Environmental and other disclosures — 4. Underground storage tanks
    • E. Environmental and other disclosures — 5. Flooding (landlords)
  • V. Managing Broker/Instructor (ONLY) Topics
    • A. Sponsoring broker/designated managing Broker responsibilities
    • A. Sponsoring broker/designated managing Broker responsibilities — 1. Training
    • A. Sponsoring broker/designated managing Broker responsibilities — 2. Supervision
    • A. Sponsoring broker/designated managing Broker responsibilities — 2. Supervision — a. Specific duties related to newly licensed brokers
    • A. Sponsoring broker/designated managing Broker responsibilities — 2. Supervision — b. Renewal of sponsored licensees
    • B. Special accounts
    • B. Special accounts — 1. Accounting requirements
    • B. Special accounts — 1. Accounting requirements — a. Timely deposits and disbursements
    • B. Special accounts — 1. Accounting requirements — b. Required documentation
    • B. Special accounts — 2. Prohibited acts
    • B. Special accounts — 3. Escrow disbursement
    • B. Special accounts — 4. Escrow disputes
    • C. Examination of records
    • C. Examination of records — 1. Record retention
    • C. Examination of records — 2. Compliance examination
    • D. Corporation/partnership/limited liability company licensure and renewal
    • E. Licensure by endorsement
    • F. Real Estate Recovery Fund
    • G. Rental finding services
    • H. Rental property management
    • I. Virtual and Branch offices
    • J. Real estate calculations
    • J. Real estate calculations — 1. Income analysis approach to property valuation and appropriate uses
    • J. Real estate calculations — 2. Seller’s net proceeds
    • J. Real estate calculations — 3. Buyer funds needed at closing
    • J. Real estate calculations — 4. Real property tax and other prorations
    • J. Real estate calculations — 5. Real property transfer fees
    • J. Real estate calculations — 6. PITI (Principal, Interest, Taxes and Insurance) payments estimate given loan rate and term
    • J. Real estate calculations — 7. Equity
    • J. Real estate calculations — 8. Loan-to-Value ratio
    • J. Real estate calculations — 9. Discount points and loan origination fees
    • K. Financing and lending
    • K. Financing and lending — 1. Owner financing (for example, installment or land contract/contract for deed)
    • K. Financing and lending — 2. Real Estate Settlement Procedures Act (RESPA), including kickbacks
    • K. Financing and lending — 3. Truth-in-Lending Act (Regulation Z), including advertising
    • K. Financing and lending — 4. Requirements and time frames of TRID (TILA-RESPA Integrated Disclosures)
    • K. Financing and lending — 5. Government loans (e.g., FHA, VA, USDA)
    • K. Financing and lending — 6. Loan features, such as prepayment penalties and balloon payments
    • L. Contract issues
    • L. Contract issues — 1. Void, voidable and unenforceable contracts
    • L. Contract issues — 2. Termination, rescission, breach, and cancellation of contracts
    • L. Contract issues — 3. Nature and use of option agreements
    • L. Contract issues — 4. Notice, delivery, acceptance and execution of contracts
    • L. Contract issues — 5. Proper handling of multiple offers and counteroffers
    • L. Contract issues — 5. Proper handling of multiple offers and counteroffers — a. Escalation clauses
    • L. Contract issues — 5. Proper handling of multiple offers and counteroffers — b. Disclosure and confidentiality
    • L. Contract issues — 6. Addenda and amendments to contracts
    • L. Contract issues — 7. Lease-purchase agreements
    • L. Contract issues — 8. Seller concessions
    • L. Contract issues — 8. Seller concessions — a. Compensation and brokerage fees
    • L. Contract issues — 8. Seller concessions — b. Financing/Closing costs
    • L. Contract issues — 8. Seller concessions — c. Repairs and other concessions
    • L. Contract issues — 9. Real estate tax proration issues
    • L. Contract issues — 10. Letters of intent
    • L. Contract issues — 11. Types of leases
    • M. Property management issues
    • M. Property management issues — 1. Fair Credit Reporting Act
    • M. Property management issues — 2. Procurement and qualification of prospective tenants
    • M. Property management issues — 3. Property manager responsibility for maintenance, improvements, reporting and risk management
    • M. Property management issues — 4. Handling landlord and tenant funds; trust accounts, reports and disbursements
    • M. Property management issues — 5. Provisions of property management contracts
    • N. Antitrust laws and types of violations
    • O. Employment law
    • O. Employment law — 1. Employees or independent contractors and governing rules

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These are independent study questions, not actual examination items. For examination requirements and official information, view Illinois Real Estate Managing Broker Examination — State Portion details.