15 free questions from the Cinna RE Illinois real estate exam bank (121 in the app). Tap an answer to check it. The rationale opens right away.
Mixing client escrow funds with the broker's own operating money in Illinois is best described as what prohibited practice?
Answer: B. Commingling
Commingling, mixing client trust funds with the broker's personal or business funds, is prohibited under Illinois license law.
An Illinois licensee deposits a client's earnest money into the licensee's personal checking account to cover a temporary cash shortfall, intending to repay it. This act is most accurately characterized as:
Answer: B. Conversion or commingling/misappropriation of client funds, a serious license-law violation
Escrow and earnest-money funds must be kept in a designated escrow/trust account, never mixed with personal or operating funds. Using client funds for personal purposes is conversion and commingling—prohibited conduct that can result in suspension or revocation regardless of intent to repay.
In Illinois, at what point must a licensee disclose in writing the agency relationship (whom the licensee represents) to a consumer who is NOT the licensee's client?
Answer: C. Before the customer discloses confidential information, generally at the first substantive contact about a specific property
Illinois requires that the agency relationship be disclosed to a customer no later than the beginning of any discussion of confidential information, and in any event before substantive negotiations begin regarding a specific property. Waiting until acceptance or closing is too late, and customers are entitled to know whom the licensee represents.
Under Illinois rules, when must a sponsoring broker deposit earnest money into the escrow account after the broker is directed to hold it?
Answer: A. Within the time required by the terms of the contract, and absent a stated time, by the next business day after the transaction is accepted
Earnest money must be deposited in accordance with the contract's terms. When the contract does not specify a time, Illinois rules require the funds to be deposited by the next business day following the transaction's acceptance. Holding funds beyond the required time is a violation.
An Illinois broker accepts a commission directly from a buyer without disclosing this to the seller-client and without the seller's knowledge. This conduct is best described as:
Answer: B. An undisclosed dual compensation arrangement constituting a breach of fiduciary duty and a license-law violation
Accepting compensation from more than one party without the informed written consent of all parties violates the Real Estate License Act of 2000 and breaches the duties of loyalty and disclosure owed to the client. Undisclosed dual compensation is prohibited conduct subject to discipline.
During the attorney review period under a standard Illinois residential contract, an attorney disapproves the contract within the allotted time. What is the typical effect?
Answer: C. The contract becomes null and void, generally returning the parties to where they were (e.g., earnest money returned), unless the parties agree otherwise
If an attorney properly disapproves the contract within the review period, the contract is typically rendered null and void and the earnest money is returned, restoring the parties' positions, unless they negotiate and agree to revised terms.
Which disclosure document must a seller of residential real property in Illinois generally complete and deliver to the buyer regarding the property's known defects?
Answer: B. The Residential Real Property Disclosure Report
Under the Illinois Residential Real Property Disclosure Act, the seller must complete and deliver the Residential Real Property Disclosure Report disclosing known material defects to the prospective buyer.
An Illinois sponsoring broker must keep a complete record of each transaction. Which of the following is NOT typically a required transaction record?
Answer: D. The personal tax returns of the buyer and seller
Required transaction records include sales contracts, agency and dual-agency disclosures, the Residential Real Property Disclosure Report, and escrow/financial records. The private tax returns of the buyer and seller are not records the brokerage is required to keep.
For how long does the Illinois Real Estate License Act generally require a sponsoring broker to retain transaction and escrow records?
Answer: B. 5 years from the date of the closing or termination of the transaction
Illinois requires brokers to keep transaction records, including escrow account records, for at least 5 years from the date of the closing or other termination of the transaction. These records must be available for inspection by the Division of Real Estate.
A buyer walks into an open house in Illinois. The licensee hosting it is the seller's designated agent. The buyer is unrepresented. Whose interests does the licensee represent, and what must the licensee disclose?
Answer: C. The seller, and the licensee must disclose that he represents the seller before the buyer shares confidential information
The hosting licensee is the seller's designated agent and owes fiduciary duties to the seller. Illinois requires the licensee to disclose to the unrepresented buyer (a customer) that he represents the seller, before the buyer reveals confidential information. No agency to the buyer is created merely by attendance, and dual agency requires written consent.
When acting as a permitted dual agent in Illinois, which of the following may the dual agent NOT do without specific written authorization?
Answer: B. Disclose to the buyer the lowest price the seller will accept
A dual agent must remain neutral between the two clients and may not disclose confidential information such as the lowest price a seller will accept or the highest price a buyer will pay, unless specifically authorized in writing. Honesty, presenting all offers, and accounting for funds are still required.
An Illinois licensee tells prospective buyers that a particular school district is undesirable in order to discourage them from a neighborhood based on its racial makeup. This conduct is:
Answer: B. Steering, a prohibited discriminatory practice and a license-law violation
Directing buyers toward or away from areas based on protected characteristics is steering, which violates fair housing law and the Real Estate License Act's prohibitions on discriminatory conduct. It is grounds for discipline, not lawful commentary.
An Illinois licensee posts an online ad for a property that gives only a phone number and no indication of the brokerage. This is prohibited as:
Answer: B. Blind advertising
Blind advertising is an ad that does not disclose the sponsoring broker's business name, making it appear the property is offered by a private party or an unidentified source. Illinois law prohibits blind ads; the sponsoring broker's name must appear.
An unlicensed assistant working for an Illinois broker independently negotiates the price terms of a sale and collects a commission directly from the seller. This situation primarily illustrates:
Answer: B. Practicing real estate without a license and unlawful compensation, exposing both the assistant and the broker to discipline
Negotiating terms and being compensated for licensed activity requires a license. Unlicensed practice is prohibited, and a broker who allows or pays an unlicensed person for licensed acts can also be disciplined under the Real Estate License Act of 2000.
Administrative rules adopted to implement the Real Estate License Act of 2000 have what legal effect on Illinois licensees?
Answer: B. They carry the force of law and must be followed
Properly adopted administrative rules implementing the Act have the force of law and are enforceable against all licensees.
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