Illinois Real Estate Exam Version 1
Practice exam for Salesperson and Broker License Exam under Real Estate Exams (Licensing Exams). 5 sample questions.
Sample Questions
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Question 1
A feature of joint tenancy with survivorship is that
Correct Answer: D
Rationale: 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.
Rationale: 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 2
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?
Correct Answer: C
Rationale: 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.
Rationale: 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 3
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?
Correct Answer: B
Rationale: 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.
Rationale: 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 4
Which of the following items would be prorated at closing with the credit going to the seller?
Correct Answer: B
Rationale: 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.
Rationale: 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.
Question 5
A real estate licensee is a partial owner of a local inspection company. It is permissible for the licensee to tell all clients to use this company when
Correct Answer: D
Rationale: Ethical standards require a licensee to disclose any financial interest in a recommended company to avoid conflicts of interest. Choice A is incorrect as it does not address disclosure. Choice B is irrelevant to the licensee’s ownership. Choice C is incorrect because failing to disclose the interest is unethical, regardless of client inquiries.
Rationale: Ethical standards require a licensee to disclose any financial interest in a recommended company to avoid conflicts of interest. Choice A is incorrect as it does not address disclosure. Choice B is irrelevant to the licensee’s ownership. Choice C is incorrect because failing to disclose the interest is unethical, regardless of client inquiries.