IREB - Illinois Real Estate Broker Examination

Question 1: A bank engages a licensed appraiser to assess a Chicago office building for a refinance. The appraiser studies market data and prepares a report concluding fair market value. Which of the following BEST describes the legal nature of the conclusion the appraiser delivers?

A precise mathematical guarantee of value

A binding contract price for the property

An opinion of value at a stated effective date

A regulatory directive imposed by IDFPR

Question 2: A federally regulated lender finances a single-family home purchase in Evanston. The transaction qualifies as a federally related transaction under FIRREA, and the loan amount exceeds the residential de minimis threshold. Which of the following BEST identifies who must perform the valuation?

A state-licensed or state-certified appraiser

Any licensed Illinois real estate broker

An unlicensed automated valuation model alone

The lender's own internal loan officer

Question 3: A loan officer contacts an appraiser before the inspection and says, "We need this property to come in at the contract price or the deal dies. Make sure your number works." Under federal appraiser independence rules, the loan officer has engaged in which of the following?

Permissible market commentary by the lender

Routine pre-engagement scope discussion

A standard request for comparable sales data

Prohibited coercion of the appraiser

Question 4: A Naperville broker prepares a comparative market analysis for a seller considering a listing price. The broker plans to present recently sold comparables and active listings in the immediate neighborhood. Which of the following BEST describes a critical disclosure requirement the broker should include?

USPAP certification as a state-licensed appraiser

Statement that the document is not an appraisal

A Phase I Environmental Site Assessment

A federally approved AVM verification number

Question 5: A lender orders a broker price opinion to support an internal loss-mitigation review on a delinquent loan secured by a Chicago condominium. The lender plans to use the BPO for the review. Which of the following BEST identifies a use that is NOT permitted for a BPO under federal law?

Primary basis for originating the mortgage loan

Short-sale negotiation with the borrower

Insurance valuation for claim adjustment

Asset valuation for portfolio monitoring

Question 6: A buyer in Oak Park concludes that a property is worth no more to him than the cost of an equally desirable substitute property nearby. The buyer applies a fundamental valuation principle to limit his offer. Which of the following BEST identifies this principle?

Principle of conformity

Principle of progression

Principle of anticipation

Principle of substitution

Question 7: An appraiser analyzes a Lincoln Park lot for highest and best use. She determines that a four-flat building would generate the most net income but is not allowed by the current zoning, which permits only a single-family residence. Which step in the highest and best use analysis defeats the four-flat?

Physically possible test of the site

Maximally productive test of returns

Legally permissible test of the use

Financially feasible test of the project

Question 8: An aging Bridgeport bungalow shows wear on its hardwood floors and worn paint throughout the interior. The owner could refinish the floors and repaint at modest cost, increasing value by more than the work would cost. Which type of depreciation BEST describes this condition?

Physical deterioration that is curable

Functional obsolescence requiring redesign

External obsolescence that is always incurable

Economic obsolescence from neighborhood decline

Question 9: A new highway is constructed immediately adjacent to a Schaumburg single-family home, generating constant noise and reducing the property's marketability. The owner cannot move the highway or shield the property economically. Which form of depreciation BEST applies?

Functional obsolescence the owner can cure

Reproduction cost adjustment for design

Physical deterioration of curable type

External obsolescence that is incurable

Question 10: An appraiser values a Chicago two-flat using the income approach by collecting monthly gross rent and dividing the sale prices of comparable properties by their monthly rents. The result allows the appraiser to estimate value from the subject's rent. Which technique is this?

Direct capitalization of net income

Gross rent multiplier analysis

Discounted cash flow projection

Cost approach with depreciation deduction

Question 11: An appraiser uses the sales comparison approach for a single-family home in Rogers Park. A comparable sold recently has a larger garage than the subject. Which of the following BEST describes how the appraiser should treat this difference?

Subtract from the comparable's price

Add to the subject's listing price

Adjust the subject downward instead

Ignore the difference if minor

Question 12: An appraiser values a special-purpose church building in Springfield that rarely sells and produces no income. The appraiser must rely on the cost approach. Which of the following BEST describes the basic cost approach calculation the appraiser performs?

Site value minus net operating income plus rents

Gross rent times multiplier minus expenses

Reproduction cost minus depreciation plus site value

Comparable sales averaged across district properties

Question 13: An appraiser applies direct capitalization to value a Chicago commercial property. The property generates net operating income, and the appraiser extracts a capitalization rate from comparable sales. Which of the following BEST describes the basic relationship of value, income, and rate in this approach?

Value times rate equals income earned

Income times rate equals net value computed

Rate plus income equals total property value

Value equals income divided by the rate

Question 14: Two adjacent vacant lots in the West Loop are combined under a single owner to support a larger mixed-use development that neither lot alone could host. Which of the following BEST describes the increment in value the combination creates beyond the sum of the individual lots?

Plottage from assemblage of parcels

Eminent domain severance value

Substitution premium across markets

Conformity bonus among neighbors

Question 15: An appraiser reconciles indications of value from the sales comparison, cost, and income approaches in valuing a Chicago retail property. Which of the following BEST describes how the appraiser typically weights the approaches in the reconciliation?

Equal weighting always required by USPAP

Based on speed of data collection used

Based on quantity and quality of supporting data

Highest dollar indication always selected

Question 16: A homeowner in Will County, outside Cook County, asks her broker about the standard assessment level applied to her single-family residence under Illinois law. Which of the following BEST identifies the statutory assessment level for residential property outside Cook County?

Ten percent of fair cash value

Thirty-three and one-third percent of fair cash value

Fifty percent of fair cash value

Twenty-five percent of fair cash value

Question 17: A homeowner in Cook County qualifies for the General Homestead Exemption on her owner-occupied principal residence. The exemption reduces taxable equalized assessed value by a stated amount. Which of the following BEST identifies the Cook County General Homestead Exemption amount?

Up to two thousand dollars in EAV reduction

Up to eight thousand dollars in EAV reduction

Up to six thousand dollars in EAV reduction

Up to ten thousand dollars in EAV reduction

Question 18: A veteran with a one hundred percent service-connected disability owns and occupies a home in Aurora. The Standard Homestead Exemption for Veterans with Disabilities provides graduated relief at higher disability levels. Which of the following BEST identifies the maximum exemption available at this disability level?

Up to two hundred fifty thousand dollars in EAV exemption

Up to five thousand dollars in EAV reduction

Up to twenty-five hundred dollars in EAV reduction

Up to seventy-five thousand dollars in EAV reduction

Question 19: An Illinois homeowner falls behind on property taxes, and the county treasurer holds an annual tax sale at which a bidder buys the tax delinquency. For occupied residential property, Illinois law gives the owner a defined period to redeem before a tax deed may issue. Which of the following BEST identifies this period?

Six months from the date of sale

One year from the date of sale

Two years and six months from the date of sale

Two years from the date of sale

Question 20: A senior homeowner in Cook County who meets the program's income limit applies for the Senior Citizens Assessment Freeze Homestead Exemption, sometimes called the Senior Freeze. Which of the following BEST describes what this exemption accomplishes?

Increases the General Homestead Exemption tenfold for seniors

Eliminates property taxes for life on the principal residence

Reduces the property tax rate by half each year

Freezes the equalized assessed value at the base qualifying year

IREB Illinois Real Estate Broker Examination - Set 2 - Part 1