Before you read
Test yourself first: 5 questions
Question 1 of 5
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. 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.
Question 2 of 5
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. 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.
Question 3 of 5
In Illinois, which agency relationship is presumed to exist by default when a licensee works with a consumer in a real estate transaction unless a written agreement provides otherwise?
Answer: B. Under the Real Estate License Act of 2000, Illinois uses designated agency as the default model. The sponsoring (managing) broker designates a specific licensee to act as the legal agent for the client, allowing the brokerage to represent both buyer and seller in-house through different designated agents.
Question 4 of 5
An Illinois broker is convicted of a felony involving fraud unrelated to a specific real estate deal. With respect to the broker's license, the IDFPR may:
Answer: B. Under the Real Estate License Act of 2000, conviction of a crime involving fraud, dishonesty, or moral turpitude can be grounds for discipline even if it did not arise from a particular transaction, because it bears on the licensee's fitness and trustworthiness.
Question 5 of 5
Under the Illinois Real Estate License Act of 2000, where must a sponsoring broker deposit earnest money received in connection with a real estate transaction?
Answer: B. Illinois requires that escrow/trust funds such as earnest money be held in a special account, separate from the broker's personal funds and business operating funds, in a recognized federally insured depository institution. Keeping such funds in personal or operating accounts is commingling, a violation of the License Act.
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What you need to know
Earnest money is deposited into the brokerage's escrow/trust account and must not be commingled with the brokerage's own funds. Because Illinois is a common-law (not community property) state, marital interests in real estate are addressed through equitable-distribution principles rather than automatic community ownership, which can affect who must sign to convey title.
Illinois Contract & Transaction Specifics: FAQs
Is Illinois Contract & Transaction Specifics on the real estate exam?
Yes. State License Law is a scored domain on the Illinois real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Illinois test this differently?
Illinois applies its own license law on top of the national portion. This page covers the Illinois rules specifically, which is what the state section of your exam tests.
