IREB - Illinois Real Estate Broker Examination

Question 1: Two parties in a Lakeview transaction sign a written contract for the sale of residential real estate. The seller is an adult of sound mind, the buyer is a competent adult, and they exchange promises supported by valuable consideration. Which of the following BEST identifies a fundamental element of contract formation present here?

Offer, acceptance, and bargained-for consideration

Tender of immediate possession at signing

Recording of the deed with the county recorder

Independent appraisal supporting the price

Question 2: An Illinois owner orally agrees to sell her Bridgeport two-flat to a buyer for a stated price, with both parties shaking hands but signing no writing. The buyer later attempts to enforce the oral agreement when the owner backs out. Which of the following BEST describes the legal status of the agreement?

Fully enforceable as a valid oral contract

Unenforceable under the Statute of Frauds

Automatically converted into a valid writing

Enforceable only if real estate broker witnesses

Question 3: A buyer makes a written offer to purchase a Wicker Park residence at the listed price. The seller responds in writing that she accepts but only if the buyer agrees to a fifteen-day inspection contingency instead of the seven days the buyer proposed. Which of the following BEST describes the legal effect of the seller's response?

Binding acceptance by the seller of the offer

Conditional acceptance still binding on the buyer

Rejection of the original offer and a counteroffer

Operative as an extension of the offer for ten days

Question 4: A seventeen-year-old enters into a written contract to purchase a Bolingbrook residential property. The seller is an adult of sound mind. The minor wishes to disaffirm the contract before turning eighteen. Which of the following BEST describes the contract's status under Illinois law?

Void from inception and unenforceable by any party

Unenforceable only with the seller's written consent

Fully enforceable against both parties at all times

Valid until the minor disaffirms; voidable by the minor

Question 5: A property owner grants a buyer the exclusive right but not the obligation to purchase a Chicago condominium at a stated price within a defined ninety-day period, supported by separate consideration paid by the buyer. Which of the following BEST identifies this contractual arrangement?

Option contract favoring the buyer

Right of first refusal triggered by offers

Bilateral purchase contract for closing

Listing agreement with the seller

Question 6: A buyer and seller execute the Illinois Multi-Board Residential Real Estate Contract for a Schaumburg single-family residence. Both sides involve attorneys after signing. Which of the following BEST describes the Illinois attorney review and modification period in this standard form contract?

Ten business days only for buyer's counsel

Thirty calendar days for any review at all

Five business days for each party's attorney

Twenty-four hours after signing the contract

Question 7: Parties to a contract for the sale of a Naperville residence sign a separate document attached to the contract at signing. The document adds new terms that supplement the original contract without changing existing terms. Which of the following BEST identifies this document?

Counteroffer rejecting prior terms

Amendment changing existing provisions

Novation replacing the prior contract

Addendum adding supplemental terms

Question 8: A residential purchase contract in Illinois includes a financing contingency in favor of the buyer. The contingency states a maximum interest rate and a deadline for obtaining a written loan commitment. Which of the following BEST describes the contingency's function?

Allows seller to terminate at any time

Permits buyer to terminate if financing cannot be obtained on terms

Mandates federal mortgage insurance coverage

Eliminates the appraisal contingency entirely

Question 9: A buyer in a Lakeview transaction includes an inspection contingency in the purchase contract giving him ten business days to obtain a professional inspection and to terminate or negotiate based on the results. Which of the following BEST describes the buyer's options after a problematic inspection?

Buyer must close regardless of findings

Buyer must hire only seller-approved inspectors

Buyer may renegotiate, accept, or terminate by deadline

Buyer waives all rights by ordering an inspection

Question 10: A buyer in Schaumburg places earnest money with the listing broker as a deposit on a residential purchase contract. The deal falls through and the parties dispute who is entitled to the funds. Under 225 ILCS 454/20-20, after how many days may the broker disburse with proper notice?

One hundred eighty days from start of dispute

Ninety days from contract signing

Thirty days from receipt of dispute

One year from the date of breach

Question 11: An Illinois purchase contract states that all deadlines are subject to a "time of the essence" clause. The buyer misses the financing contingency deadline by two business days due to lender delay. Which of the following BEST describes the legal consequence under this clause?

Late performance excused by good faith

Material breach giving seller right to terminate

Automatic extension granted by Illinois law

Triggers contract rescission by mutual agreement

Question 12: A buyer in an Edgewater transaction agrees to purchase a condominium subject to a written contingency that the property must appraise for at least the contract price. The appraisal comes in twenty thousand dollars below contract price. Which of the following BEST describes the buyer's options?

Forfeit the earnest money automatically by statute

Force the seller to accept the lower price by law

Demand the appraiser issue a corrected appraisal

Renegotiate price, bring additional cash, or terminate

Question 13: A buyer reviews a title commitment for a Lincoln Park residence and discovers an unresolved mechanic's lien from a recent renovation. The contract requires marketable title at closing. Which of the following BEST describes the buyer's typical options regarding the unresolved title issue?

Buyer must accept title with all liens intact

Buyer must purchase additional title insurance only

Seller must cure title issue or buyer may terminate

Buyer must immediately file title insurance claim

Question 14: A buyer in Naperville contracts to purchase a new home contingent on the sale of his existing home. The contract includes a kick-out clause for the seller. Which of the following BEST describes the function of the kick-out clause in this arrangement?

Permits seller to continue marketing and accept backup offer

Allows buyer additional time to inspect property

Requires buyer to waive financing contingency immediately

Eliminates buyer's right to terminate for any reason

Question 15: A residential purchase contract requires the buyer to deliver a written financing commitment by a specific date. The buyer does not waive the contingency and fails to deliver a commitment by the deadline. Which of the following BEST describes the typical contractual consequence under standard Illinois contract language?

Contract automatically converts to all-cash terms

Buyer's failure constitutes contract breach immediately

Seller must extend the deadline by thirty days

Contract may be terminated under the contingency

Question 16: A seller in Pilsen breaches a contract to convey a unique vintage rowhouse by refusing to close after the buyer has performed every required step. The buyer wants the court to compel actual conveyance rather than monetary damages. Which of the following BEST identifies the equitable remedy the buyer is seeking?

Liquidated damages from a fixed clause

Punitive damages for breach of contract

Specific performance compelling conveyance

Rescission to undo the entire agreement

Question 17: An Illinois purchase contract states that, if the buyer defaults, the seller's exclusive remedy is to retain the buyer's earnest money as liquidated damages. The buyer defaults. The earnest money is a reasonable forecast of the seller's likely damages. Which of the following BEST describes the seller's position?

Seller is limited to retaining the earnest money

Seller may also sue for the property's full value

Seller forfeits all remedies by accepting the clause

Seller must elect within thirty days of breach

Question 18: After a residential purchase contract is signed in Cicero, both buyer and seller discover that their mutual mistake about property boundaries renders the central understanding of the bargain incorrect. The parties wish to undo the contract. Which of the following BEST identifies the appropriate remedy?

Specific performance with adjustment

Liquidated damages payment by buyer

Quiet title action against neighbors

Rescission restoring the parties to status quo

Question 19: Two parties to a residential purchase contract sign a written document agreeing to terminate the contract by mutual consent, with the earnest money returned to the buyer. Which of the following BEST describes the termination method used?

Frustration of purpose by changed conditions

Mutual rescission by written agreement

Impossibility of performance through illness

Anticipatory repudiation by one party only

Question 20: A buyer in Bridgeport defaults under a residential purchase contract, and the seller wishes to retain the earnest money pursuant to a liquidated damages clause. The earnest money is held in the listing broker's special account. Which of the following BEST describes the proper next step?

Broker decides unilaterally to favor seller

Broker keeps earnest money indefinitely as commission

Broker disburses with mutual written agreement of parties

Broker must consult IDFPR for written approval

IREB Illinois Real Estate Broker Examination - Set 3 - Part 1