State Exam

Front 1

Three people own a property as joint tenants. One of the joint tenants dies. How is the property now owned?
A) The two remaining owners are now tenants in common.
B) The heirs of the deceased inherit the interest in the property.
C) The two remaining joint tenants now own one half of the property each as joint tenants.
D) The survivors must partition the property and sell it to satisfy the heirs of the deceased.

Back 1

C) The two remaining joint tenants now own one half of the property each as joint tenants

Front 2

Oral contracts for the sale of real property are not necessarily void, but they are unenforceable because of:
A) the law of agency.
B) the statute of limitations.
C) the statute of frauds.
D) the doctrine of laches.

Back 2

C) the statute of frauds.

Front 3

A bilateral contract is one:
A) where one party agrees to perform.
B) where one party is given an option to perform.
C) where a promise by one party is given in exchange for a promise by another party.
D) which applies only to leases

Back 3

C) where a promise by one party is given in exchange for a promise by another party.

Front 4

Undue influence or duress applied to one party to a contract makes the contract:
A) void.
B) voidable.
C) invalid.
D) unenforceable.

Back 4

B) voidable.

Because all parties must enter a contract willingly and believe that doing so is in their best interests, attempts to influence an unwilling or reluctant participation can render the contract void

Front 5

Dole and Randy each purchased homes in a subdivision of 346 homes. They agreed to the subdivision restrictions that said no large animals may be kept. Several years later, the 8-year-old daughter of Randy asked for a pony. Randy obtained the proper building permits and constructed a beautiful barn and white rail fence to house the new animal. The daughter was very happy until Dole insisted they get rid of the pony. Could Dole force Randy to remove the pony from the property?
A) Yes. Dole could force them to comply with the restrictions in the deed.
B) Yes. Dole has a legal obligation to report the existence of the pony to the appropriate governmental agency.
C) No. Since Dole did not adjoin Rand's property, Dole was not an interested party.
D) No--since the action was not taken prior to the issuance of the building permits

Back 5

A) Yes. Dole could force them to comply with the restrictions in the deed.

Front 6

The government's right to make laws and regulations for the general welfare of the public is known as:
A) eminent domain.
B) police power.
C) escheat.
D) the bundle of rights.

Back 6

B) police power.

Front 7

The total collection of rights which may be claimed by private ownership is best described as:
A) the fee simple system.
B) an estate.
C) freehold.
D) the bundle of rights.

Back 7

D) the bundle of rights.

Front 8

Several legal steps must sometimes be taken before a creditor can have his outstanding debt satisfied through the sale of the debtor's property. Which of the following is NOT one of the steps in the process?
A) judgment
B) writ of persecution
C) lis pendens - attachment.
D) writ of execution

Back 8

B) writ of persecution

A "writ of persecution" would be a written order of the court to persecute (not prosecute) a person. Clearly, there is no such thing

Front 9

Jones was given a life estate. As a life tenant, he graciously conveys an easement to the Smith's to cross over his land. Jones dies one year after granting the easement. The easement will:
A) go to Jones' heirs.
B) terminate.
C) remain Smith's.
D) not be enforceable because a life tenant cannot grant an easement without committing waste.

Back 9

B) terminate.

Generally, life tenancy only grants people the right to use property, not assign other rights to third parties

Front 10

Telephone lines are examples of:
A) an easement in gross.
B) a legally valid encroachment.
C) an easement appurtenant.
D) a non-revocable license.

Back 10

A) an easement in gross.

Front 11

Five individuals join together to purchase a property. They own the property in severalty. What type of business organization have they formed?
A) general partnership
B) limited partnership
C) syndicate
D) corporation

Back 11

D) corporation

Front 12

Permission granted to hunt on another's land is an example of:
A) an incorporeal easement.
B) a license.
C) an easement by prescription.
D) an easement appurtenant.

Back 12

B) a license.

Front 13

Which of the following is an example of a less-than-freehold estate?
A) estate in severalty
B) leasehold estate
C) fee simple estate
D) fee simple determinable estate

Back 13

B) leasehold estate

Freehold and various forms of fee simple estates mean ownership, while a leasehold estate means renting.

Front 14

Title held by a husband and wife may include all of the following forms of ownership EXCEPT:
A) severalty.
B) tenancy by the entireties.
C) joint tenancy.
D) tenancy in common.

Back 14

A) severalty.

Severalty means sole ownership and, other than forming a corporation, spouses can only hold property in common through some form of joint ownership.

Front 15

James Smith and Bill Ross purchased a property together for their business venture with stated proportionate interest of 1/3 and 2/3 respectively without the right of survivorship. Each of them wants his share to be inherited by his wife. They are a partnership and not a corporation. James and Bill most likely took title as:
A) joint tenants.
B) tenants in common.
C) in severalty.
D) a general partnership.

Back 15

B) tenants in common.

Tenants in common have flexibility in how they divide ownership and assign survivorship rights. Joint tenants, on the other hand, own property in equal shares while a general partnership is a business unit serving other shareholders.

Front 16

Which of the following types of tenancies refers to ownership of real property?
A) tenancy in common
B) tenancy at will
C) tenancy at sufferance
D) tenancy for years

Back 16

A) tenancy in common

Front 17

There is only one unity in a tenancy in common ownership. That unity indicates that each party:
A) must have an equal interest.
B) must have an undivided interest in the whole.
C) must acquire the property at the same time.
D) must have the right of survivorship.

Back 17

B) must have an undivided interest in the whole.

An undivided interest means that each person has an interest in the whole property, not a particular portion of it. This is a characteristic of tenancy in common.

Front 18

A husband and wife own property as tenants by the entireties. Which of the following is NOT true concerning tenancy by the entirety?
A) Both must consent to sell.
B) Each may individually file a partition suit.
C) Both are both liable for a debt secured by such a property.
D) The tenancy by entirety could be ended by divorce or death of one of the parties.

Back 18

B) Each may individually file a partition suit.

Partition suits occur when one co-owner of a property wants to sell and the other co-owners are unwilling to either sell the property or buy the other's interest.

Front 19

A deed to convey property would be SIGNED by:
A) the grantor.
B) a notary public only.
C) the grantee.
D) any authorized public officer.

Back 19

A) the grantor.

The "grantor" is the one conveying the property, so he or she signs the deed.

Front 20

Jones, a married man with children, died without leaving a will. His real estate holdings are valued at over one million dollars. Jones' real estate would:
A) be held in trust pending appearance of heirs.
B) be distributed according to the laws of descent and distribution.
C) revert to the state government.
D) revert to the United States government.

Back 20

B) be distributed according to the laws of descent and distribution.

Each state has provisions for distributing assets based on a priority of relationships--typically, spouse first, then children, then other relatives

Front 21

Involuntary methods of conveying property include all of the following EXCEPT:
A) escheat.
B) condemnation.
C) quit claim.
D) adverse possession.

Back 21

C) quit claim.

A quit claim action is always voluntary and is usually used to clear up minor title issues.

Front 22

The creation of an easement by prescription is similar to:
A) adverse possession.
B) unlawful detained action.
C) accretion.
D) police power.

Back 22

A) adverse possession.

Easements by prescription must be ordered by a court. They mean essentially the same thing as adverse possession and have the same or similar requirements, depending on jurisdiction.

Front 23

A recorded valid deed must contain all of the following EXCEPT:
A) signature of the grantor.
B) signature of the grantee.
C) granting clause.
D) an acknowledgment.

Back 23

B) signature of the grantee.

For recording purposes, a deed only needs to have been granted; hence only that person's signature is required.

Front 24

Which of the following statements is incorrect?
A) A deed conveys a present interest in real estate.
B) A will conveys no interest in real estate until after the death of the testator.
C) A deed conveys a future interest in real estate if so specified by the grantee.
D) A will conveys no interest in real estate until it is probated.

Back 24

C) A deed conveys a future interest in real estate if so specified by the grantee.

The "grantee" is the person buying the property and he has no right to convey anything until the transfer is complete. At that point, he becomes the new owner and thus the "grantor" of any present or future interest he may wish to assign

Front 25

The covenant in which a grantor promises that he owns the property and that he has the right to convey title to it is the:
A) covenant of warranty forever.
B) covenant of seisin.
C) covenant of quiet enjoyment.
D) covenant of further assurances.

Back 25

B) covenant of seisin.

Seisen means "to own" and carries with it the assurance of the seller that he or she has the right to sell and convey all rights of the property.

Front 26

Title to real property is conveyed by deed when:
A) signed by the grantor.
B) recorded by the grantee.
C) delivered to and accepted by the grantee.
D) signed by the grantee and delivered to the grantor.

Back 26

C) delivered to and accepted by the grantee.

Conveying title is different than recording and must be both signed and delivered by the grantor to the grantee and accepted and signed by the grantee.

Front 27

A person built a hangar next to an adjacent property. A construction lien was subsequently placed against the aircraft. Is this a valid lien?
A) Yes. The aircraft is more valuable than the hangar.
B) Yes. The aircraft is kept in the hangar.
C) No. It should have been placed against real and personal property.
D) No. Construction liens can only be filed on the real property that was worked on.

Back 27

D) No. Construction liens can only be filed on the real property that was worked on.

Front 28

In determining whether an item is a fixture, which of the following would not be considered?
A) method of attachment
B) adaptation to the real estate
C) value of the item
D) intention of the parties when the fixture was installed

Back 28

C) value of the item

A $5,000 built-in bookcase is as much a fixture as $2 light switch

Front 29

An item which was personal property but has been attached to and become part of the real property is known as:
A) a trade fixture.
B) an emblement.
C) an appurtenance.
D) a fixture.

Back 29

D) a fixture.

Front 30

Five acres of land were zoned residential and were surrounded by other properties that were also residential. The owner wanted to re-zone the 5 acres so that a commercial building could be built. Which of the following would have to be obtained to allow for the change?
A) non-conforming use
B) spot zoning
C) variance
D) aesthetic zoning

Back 30

B) spot zoning

Spot zoning refers to the practice of reclassifying one piece of property in a manner inconsistent with the surrounding properties.

Front 31

The primary purpose of a listing agreement is to:
A) serve as a contract of employment between the owner and the broker.
B) list all improvements and amenities of the property.
C) serve as a guide for a sales contact.
D) give the broker permission to sell all of his principal's properties.

Back 31

A) serve as a contract of employment between the owner and the broker

Front 32

In some cases, a broker's commission can be earned if he can prove he set in motion a series of events which resulted in the sale of a property. If a broker produces a ready, willing and able buyer he would most likely:
A) have an exclusive right-to-sell listing.
B) have secured the buyer's signature on the sales contract.
C) be considered the procuring cause of the sale.
D) showed property to the buyer.

Back 32

C) be considered the procuring cause of the sale.

Producing a "ready, willing and able buyer" is the primary definition of a licensee's role and the basis on which he or she earns a commission.

Front 33

A broker and a salesperson both owe all but which of the following to the purchaser (customer):
A) assistance in negotiations to purchase the property at below the list price.
B) honesty.
C) accuracy.
D) disclosure of defects.

Back 33

A) assistance in negotiations to purchase the property at below the list price.

Front 34

Which of the following is not true regarding a subagency relationship?
A) The listing broker is a principal of the selling broker.
B) A subagent has an implied authority to act as a dual agent (disclosed or undisclosed).
C) A subagent can only perform the activities delegated to him and cannot be involved in making decisions, which would directly affect the welfare of the seller.
D) The selling company should contact the listing company before showing property to a prospect.

Back 34

B) A subagent has an implied authority to act as a dual agent (disclosed or undisclosed).

Front 35

The amount of a broker's commission usually is:
A) based upon standard rates, established in the area, which are mandated by the Sherman Anti-Trust Law.
B) established by agreement between the broker and the seller or the buyer.
C) established by the real estate commission.
D) 6% or 7% for a single-family residence, depending on the area.

Back 35

B) established by agreement between the broker and the seller or the buyer

Front 36

A listing that allows the owner to sell the property himself without being liable for a commission, but which appoints only one broker to act as his sole agent is a(n):
A) exclusive agency listing.
B) open listing.
C) exclusive right to sell listing.
D) net listing.

Back 36

A) exclusive agency listing.

Front 37

In order to be valid all exclusive listings must include:
A) a dragnet clause.
B) permission for the listing broker to appoint subagents.
C) a definite date of expiration.
D) an automatic renewal clause.

Back 37

C) a definite date of expiration.

Front 38

Typically a listing broker is usually considered to be:
A) the principal in the transaction.
B) the client in the transaction.
C) a fiduciary (agent) of the seller.
D) a dual agent.

Back 38

C) a fiduciary (agent) of the seller.

Front 39

In order to collect the same amount for any sale, regardless of the list price of the house, a broker desired to charge a flat fee to all sellers. The broker could do this only:
A) if the broker applies to the state legislature.
B) if there was a history of this in that area.
C) by showing the seller the flat fee versus the percentage of the list price.
D) by informing the seller, prior to the listing, and obtaining an agreement.

Back 39

D) by informing the seller, prior to the listing, and obtaining an agreement.

Front 40

An owner says that he wants to net $25,000 from the sale of his home, where he still owes $253,000. Broker Bailey accepts the listing with permission to offer the home for sale at $300,000. Which of the following is true, assuming closing costs of 4,000 excluding the broker's fee?
A) The agreement constitutes a net listing.
B) The broker negotiated a 6% commission.
C) The broker cannot take a listing under these circumstances.
D) The broker would have to sell the property for more than $300,000 to take care of other expenses related to the sale.

Back 40

B) The broker negotiated a 6% commission.

This is simply stating standard commission-based compensation in a different way. Changing the language slightly, however, would result in a "net listing agreement" which is illegal in some states and viewed with disfavor in the rest.

Front 41

Licensee Paul is bound to inform his client of all facts that might affect the client's interests -- both what Paul knows and what he "should have known." Which of these situations would not be something Paul "should know?"
A) There is a crack in the basement wall.
B) The air conditioner does not work.
C) The owner of the property is HIV positive.
D) The casement windows have broken seals.

Back 41

C) The owner of the property is HIV positive.

The licensee is not required or expected to know health details of the owner.

Front 42

Which of the following types of agency is not allowed in Illinois?
A) Dual agency
B) Buyer's agency
C) Designated agency
D) Undisclosed dual agency

Back 42

D) Undisclosed dual agency

Front 43

Broker Dan is representing Mandy as a buyer's agent. He wants to show Mandy one of his listed properties. Which statement is true?
A) There is no reason why Dan should not show Mandy the property.
B) Dan must disclose to the seller that he is also representing the buyer.
C) Dan needs to get the informed, written consent of both Mandy and the seller to act as a dual agent.
D) Dan must notify the Department of State that he wants to represent both parties in the transaction.

Back 43

C) Dan needs to get the informed, written consent of both Mandy and the seller to act as a dual agent.

Front 44

When does the first substantive contact take place?
A) A buyer contacts a broker through the Internet.
B) A seller calls a broker to schedule a listing appointment.
C) A potential buyer shows up at an open house.
D) A potential buyer or seller begins to discuss his or her needs.

Back 44

D) A potential buyer or seller begins to discuss his or her needs.

First substantive contact occurs as soon as there is a transfer of information from a buyer or seller to a licensee that is significant and material to a prospective transaction.

Front 45

Broker Jim signs a listing agreement with seller, Grace and a buyer agency agreement with buyer, Pat. Both Grace and Pat signed written disclosure statements agreeing to this arrangement. What is this relationship called?
A) Subagency
B) Dual agency
C) Exclusive agency
D) Single agency

Back 45

B) Dual agency

Disclosed dual agency exists when a real estate firm or a real estate licensee represents both the seller and the buyer or the landlord and the tenant in the same transaction.

Front 46

Using or altering existing listing information or keywords that are copied from one Internet site and posted or displayed for the benefit of the general public in front of a firewall at another site, without written or electronic authorization and disclosure of ownership is known as:
A) Scraping
B) Copywriting
C) Spam
D) Virus

Back 46

A) Scraping

Front 47

Which of the following is true regarding blind ads?
A) Licensees may not utilize blind ads unless they own the advertised property.
B) Licensees may not use blind ads regardless of who owns the property.
C) Blind ads placed by licensees are permitted if they do not discriminate.
D) A blind ad is an ad that excludes the licensees name.

Back 47

B) Licensees may not use blind ads regardless of who owns the property.

Front 48

What MUST be printed on or included with the Property Disclosure Report?
A) A copy of the actual Disclosure Act
B) A copy of the inspection report
C) An affidavit signed by the managing broker who has the listing
D) The seller's contact information including phone number and email address

Back 48

A) A copy of the actual Disclosure Act


Based on Illinois law, a copy of the actual Disclosure Act, (excluding Section 35) must be printed on or be included with the Residential Real Property Disclosure Report form.

Front 49

The most common method of framing a house since 1945 is
A) balloon frame.
B) post and beam.
C) half-timber.
D) platform or western framing.

Back 49

D) platform or western framing.

A house framing method in which each floor is built up individually and serves as the foundation for stud walls. It replaced the balloon frame.

Front 50

Which of the following is a safety device likely to be found in a bathroom or garage?
A) Ground fault circuit interrupter.
B) Heat pump.
C) Mansard.
D) Footing.

Back 50

A) Ground fault circuit interrupter.

A device that monitors the current entering and leaving a receptacle or circuit. When incoming and outgoing currents are unequal, the device instantly opens the circuit.