Exam glossary
Illinois real estate exam glossary
Every term the Illinois broker exam actually tests, defined for the exam rather than for a dictionary. 126 entries, grouped by the PSI content area they belong to, each one naming the distinction the question usually turns on.
Last updated: August 1, 2026
How should you use this glossary?
Look a term up when a practice question turns on wording you are not sure about. Read the whole group when a content area keeps costing you points. The groups below follow the PSI outline and show what each area is worth, so you can spend time where the questions are.
If you are still planning your study sequence, start with the 15-topic master study guide and use this page for lookups along the way. For side-by-side pairs that are easy to confuse, see the full study library.
Property Ownership
National 1 on the PSI outline. Worth 10% of that portion. 4 terms.
- Defeasible feeLearn defeasible fees for the Illinois exam, including determinable estates, conditions subsequent, executory limitations, future interests, and deed clues.
- Life estateLearn life estates for the Illinois exam, including life tenants, measuring lives, remainders, reversions, transfers, duties, waste, and termination.
- Ownership in trustLearn ownership in trust for the Illinois real estate exam, including settlors, trustees, beneficiaries, legal title, land trusts, powers, and transfers.
- TimeshareLearn timeshare ownership for the Illinois real estate exam, including deeded estates, right-to-use plans, scheduling, fees, transfers, and exam traps.
Land Use Controls
National 2 on the PSI outline. Worth 5% of that portion. 13 terms.
- Building codeLearn Illinois building codes for the real estate exam, including the statewide baseline, local amendments, permits, inspections, occupancy, and violations.
- CC&RsLearn Illinois CC&Rs for the real estate exam, including declarations, restrictions, assessments, enforcement, amendments, resale documents, and owner duties.
- CondemnationLearn condemnation for the Illinois real estate exam, including authority, offers, complaints, hearings, compensation, partial takings, quick-take, and title.
- Deed restrictionLearn Illinois deed restrictions for the real estate exam, including covenants, recording, notice, enforcement, amendments, fair housing, and due diligence.
- Eminent domainLearn eminent domain for the Illinois real estate exam, including public use, just compensation, total and partial takings, condemnation, and quick-take rules.
- EscheatLearn escheat for the Illinois real estate exam, including intestacy, missing heirs, county title, probate, the Escheats Act, unclaimed property, and traps.
- HOA bylawsLearn Illinois HOA bylaws for the real estate exam, including boards, elections, meetings, voting, budgets, records, amendments, and document hierarchy.
- Nonconforming useLearn Illinois nonconforming uses for the real estate exam, including lawful origin, grandfathered rights, discontinuance, abandonment, expansion, and damage.
- Police powerLearn police power for the Illinois real estate exam, including zoning, building codes, permits, public health, home rule, due process, takings, and key limits.
- Property taxLearn Illinois property tax for the real estate exam, including market value, assessed value, equalization, EAV, exemptions, tax rates, liens, and appeals.
- Special assessmentLearn special assessments for the Illinois real estate exam, including special benefit, local improvements, installments, liens, closings, and distinctions.
- VarianceLearn Illinois zoning variances for the real estate exam, including hardship, practical difficulty, dimensional and use relief, hearings, findings, and appeals.
- ZoningLearn Illinois zoning for the real estate exam, including districts, permitted and special uses, density, setbacks, variances, rezoning, and nonconforming uses.
Valuation and Market Analysis
National 3 on the PSI outline. Worth 8% of that portion. 18 terms.
- AppraisalLearn real estate appraisals for the Illinois exam, including purpose, scope, effective date, value approaches, USPAP, reports, and CMA boundaries.
- Appraisal processMaster the appraisal process for the Illinois exam, from problem definition and scope through data, highest and best use, value approaches, and reconciliation.
- Automated valuation model (AVM)Learn AVMs for the Illinois real estate exam, including data, confidence, limitations, bias controls, federal quality standards, and appraisal differences.
- Broker price opinion (BPO)Learn Illinois broker price opinions, including permitted uses, probable sale price, property scope, compensation, disclosures, and appraisal limits.
- Comparative market analysis (CMA)Learn Illinois comparative market analysis, including pricing method, comparable selection, adjustments, required disclosures, and appraisal limits.
- Cost approachMaster the cost approach for the Illinois real estate exam, including land value, replacement cost, reproduction cost, depreciation, and exam math.
- DepreciationMaster real estate depreciation for the Illinois exam, including physical, functional, external, curable, incurable, age-life, tax, and appraisal differences.
- External obsolescenceMaster external obsolescence for the Illinois real estate exam, including locational and economic causes, paired sales, income loss, and appraisal math.
- Functional obsolescenceMaster functional obsolescence for the Illinois real estate exam, including deficiencies, superadequacies, curable and incurable loss, and appraisal math.
- Income approachMaster the income approach for the Illinois real estate exam, including PGI, EGI, NOI, capitalization rates, GRM, direct capitalization, and exam math.
- Licensed appraiser requirementLearn when Illinois law and federal lending rules require an appraiser, including credentials, thresholds, exemptions, evaluations, CMAs, BPOs, and AVMs.
- Market priceLearn market price for the Illinois exam, including list, offer, contract, sale, and net prices, concessions, arm's-length deals, value, and appraisal gaps.
- Market valueLearn market value for the Illinois real estate exam, including willing parties, exposure, highest and best use, valuation approaches, price, cost, and taxes.
- PlottageMaster plottage for the Illinois real estate exam, including assemblage, value increment, highest and best use, holdouts, approvals, and exam math.
- Principle of substitutionMaster substitution for the Illinois real estate exam, including comparable properties, cost, income, competition, buyer choice, and common exam traps.
- ProgressionMaster progression for the Illinois real estate exam, including neighborhood influence, conformity, under-improvement, comparable sales, and exam traps.
- RegressionMaster regression for the Illinois real estate exam, including over-improvement, conformity, contribution, buyer ceilings, comparable sales, and exam traps.
- Sales comparison approachMaster the sales comparison approach for the Illinois real estate exam, including comparable selection, adjustments, reconciliation, and exam math.
Financing
National 4 on the PSI outline. Worth 10% of that portion. 21 terms.
- Acceleration clauseMaster acceleration clauses for the Illinois real estate exam, including default, notice, cure, full-balance demand, foreclosure, and reinstatement.
- Adjustable-rate mortgage (ARM)Master adjustable-rate mortgages for the Illinois real estate exam, including index, margin, caps, floors, adjustment periods, notices, and ARM calculations.
- Alienation clauseMaster alienation and due-on-sale clauses for the Illinois real estate exam, including transfers, assumptions, subject-to sales, federal exceptions, and payoff.
- AmortizationMaster mortgage amortization for the Illinois real estate exam, including principal, interest, schedules, term, maturity, balloons, and negative amortization.
- Balloon paymentMaster balloon payments for the Illinois real estate exam, including short terms, long amortization, maturity, disclosures, repayment risk, and balloon math.
- Conventional loanMaster conventional loans for the Illinois real estate exam, including conforming, nonconforming, jumbo, 2026 loan limits, underwriting, and mortgage insurance.
- Debt-to-income ratioMaster debt-to-income ratio for the Illinois real estate exam with DTI formulas, housing and total ratios, worked math, underwriting rules, and traps.
- Deed of trustMaster deeds of trust for the Illinois real estate exam, including trustor, trustee, beneficiary, note, power of sale, mortgage differences, and releases.
- Equal Credit Opportunity Act (ECOA)Master ECOA for the Illinois real estate exam, including Regulation B, prohibited bases, applications, income, notices, appraisals, and 2026 changes.
- FHA loanMaster FHA loans for the Illinois real estate exam, including 2026 limits, 3.5% investment, MIP, occupancy, appraisal, property standards, and underwriting.
- ForeclosureMaster Illinois foreclosure for the real estate exam, including judicial process, reinstatement, redemption, sale, deficiency, and servicing rules.
- MortgageMaster mortgages for the Illinois real estate exam, including lien theory, mortgagor, mortgagee, note, priority, recording, payoff, and release.
- Owner financingMaster owner financing for the Illinois real estate exam, including seller notes, contracts for deed, federal rules, Illinois disclosures, and default.
- Prepayment penaltyMaster prepayment penalties for the Illinois real estate exam, including federal limits, Illinois rules, calculations, disclosures, exemptions, and payoff.
- Private mortgage insurance (PMI)Master PMI for the Illinois real estate exam, including lender protection, cost, original value, 80% cancellation, 78% termination, and the midpoint rule.
- Promissory noteMaster promissory notes for the Illinois real estate exam, including maker, payee, principal, interest, maturity, default, and mortgage differences.
- Real Estate Settlement Procedures Act (RESPA)Master RESPA for the Illinois real estate exam, including Regulation X coverage, Section 8 kickbacks, affiliated businesses, escrow limits, and servicing.
- TRID integrated disclosure ruleMaster TRID for the Illinois real estate exam, including the Loan Estimate, Closing Disclosure, timing, fee tolerances, revisions, and waiting periods.
- Truth in Lending Act (TILA)Master TILA for the Illinois real estate exam, including Regulation Z, finance charges, APR, mortgage disclosures, advertising, ATR, and rescission.
- UnderwritingMaster mortgage underwriting for the Illinois real estate exam, including the three Cs, ATR factors, approvals, conditions, appraisals, and fair lending.
- VA loanMaster VA loans for the Illinois real estate exam, including COE, entitlement, guaranty, funding fees, occupancy, residual income, appraisal, and assumptions.
Contracts
National 5 on the PSI outline. Worth 19% of that portion. 25 terms.
- AddendumMaster real estate addenda for the Illinois exam, including incorporation, signatures, conflicts, blank spaces, later alterations, delivery, and records.
- AmendmentMaster Illinois real estate contract amendments, including assent, consideration, signatures, oral changes, extensions, alterations, delivery, and records.
- Attorney review periodMaster Illinois real estate attorney review: contract deadlines, business days, approval, disapproval, modifications, notice, delivery, and earnest money.
- Bilateral contractMaster bilateral contracts for the Illinois real estate exam, including exchanged promises, formation, consideration, contingencies, performance, and breach.
- ConsiderationMaster consideration for the Illinois real estate exam, including bargained exchange, promises, acts, forbearance, earnest money, modifications, and options.
- ContingencyMaster real estate contingencies for the Illinois exam, including financing, inspection, appraisal, title, attorney review, deadlines, waiver, and notice.
- CounterofferMaster counteroffers for the Illinois real estate exam, including changed terms, rejection, roles, deadlines, inquiries, multiple counters, and acceptance.
- Earnest moneyMaster Illinois earnest money, including escrow deposits, deadlines, commingling, disputes, release, contingencies, default, records, and exam traps.
- Executed contractMaster executed contracts for the Illinois real estate exam, including signing, performance, closing, deed delivery, recording, merger, and surviving duties.
- Executory contractMaster executory contracts for the Illinois real estate exam, from signing and contingencies through equitable conversion, closing, deed, breach, and discharge.
- Lease purchaseMaster Illinois lease-purchase: lease options, rent credits, title, financing, defaults, installment-sale rules, disclosures, recording, and exam traps.
- Liquidated damagesMaster Illinois liquidated damages in real estate, including earnest money, intent, reasonable estimates, uncertain loss, penalties, remedies, and release.
- Multiple offersMaster multiple offers for the Illinois real estate exam, including presentation, confidentiality, contemporaneous offers, comparison, escalation, and fairness.
- Mutual assentMaster mutual assent for the Illinois real estate exam, including objective intent, offer and acceptance, counteroffers, mistakes, signatures, and delivery.
- NovationMaster Illinois novation: substituted parties and duties, four elements, consent, extinguishment, intent, consideration, assignment, assumption, and release.
- OfferMaster offers for the Illinois real estate exam, including terms, communication, expiration, revocation, rejection, counteroffers, options, and auctions.
- Option contractMaster option contracts for the Illinois real estate exam, including consideration, irrevocability, exact exercise, deadlines, leases, and purchase rights.
- RescissionMaster Illinois contract rescission, including mutual agreement, fraud, material breach, mistake, restoration, restitution, prompt action, waiver, and escrow.
- Specific performanceMaster Illinois specific performance for real estate, including unique land, definite contracts, readiness, tender, defenses, remedies, damages, and exam traps.
- Statute of fraudsMaster the Illinois Statute of Frauds for the real estate exam, including land contracts, leases, signed writings, electronic records, and exceptions.
- Unenforceable contractMaster unenforceable contracts for the Illinois real estate exam, including the Frauds Act, limitation periods, licensing, defenses, exceptions, and remedies.
- Unilateral contractMaster unilateral contracts for the Illinois real estate exam, including performance offers, rewards, acceptance, revocation, and real estate options.
- Valid contractMaster valid contracts for the Illinois real estate exam, including offer, acceptance, consideration, capacity, legality, definite terms, writing, and consent.
- Void contractMaster void contracts for the Illinois real estate exam, including illegality, authority, public policy, ratification, severability, and core distinctions.
- Voidable contractMaster voidable contracts for the Illinois real estate exam, including minority, incapacity, fraud, duress, mistake, rescission, ratification, and restitution.
Agency
National 6 on the PSI outline. Worth 13% of that portion. 11 terms.
- AgencyMaster Illinois real estate agency: clients, customers, designated agents, duties, disclosure, compensation, dual agency, confidentiality, and exam traps.
- Agency disclosureMaster Illinois agency disclosures: designated agents, no-agency notice, compensation discussion, dual-agency consent, timing, copies, records, and exam traps.
- Buyer brokerage agreementMaster Illinois buyer brokerage agreements: timing, required terms, compensation, agency, exclusivity, minimum services, duration, termination, and exam traps.
- ClientMaster Illinois real estate clients: representation, written agreements, designated agents, duties, confidentiality, disclosures, and termination.
- Conflict of interestMaster Illinois real estate conflicts: dual agency, licensee ownership, self-dealing, referrals, compensation, competing offers, disclosure, and consent.
- CustomerMaster Illinois real estate customers: no-agency notice, honest dealing, false information, latent physical facts, inspections, offers, and client differences.
- Fiduciary dutyMaster real estate fiduciary duties and Illinois Article 15: loyalty, obedience, disclosure, confidentiality, accounting, care, conflicts, and termination.
- Listing agreementMaster Illinois listing agreements: types, required terms, authority, compensation, minimum services, duration, protection periods, termination, and exam traps.
- Power of attorneyMaster Illinois property powers of attorney: execution, durability, real estate authority, signatures, recording, reliance, revocation, and agent duties.
- Termination of agencyMaster termination of real estate agency in Illinois: expiration, completion, revocation, surviving duties, compensation, protection periods, and exam traps.
- Transaction brokerLearn transaction brokers, why Illinois prohibits that relationship, and how designated agency, customers, no-agency notice, and dual agency differ.
Property Disclosures
National 7 on the PSI outline. Worth 7% of that portion. 8 terms.
- Environmental disclosureMaster Illinois environmental disclosure: radon, lead, asbestos, tanks, contamination, Phase I due diligence, CERCLA liability, records, and land controls.
- Inspection red flagMaster Illinois home inspection red flags: structural, water, roof, electrical, plumbing, HVAC, access, report limits, specialist follow-up, and deadlines.
- Land use red flagMaster land use red flags: zoning, permitted and special uses, nonconformity, setbacks, permits, subdivision, access, easements, floodplain, and wetlands.
- Latent defectMaster latent defects in Illinois: hidden conditions, diligent inspection, actual knowledge, seller and broker duties, inspection limits, disclosure, and proof.
- Lead-based paint disclosureMaster lead-based paint disclosure for Illinois exams: pre-1978 housing, known hazards, pamphlets, records, the buyer's 10 days, agents, and leases.
- Material defectMaster Illinois material defects: value, health and safety thresholds, corrected conditions, seller reports, supplements, broker duties, and remedies.
- Material factMaster material facts for the Illinois real estate exam: knowledge, client and customer duties, physical defects, confidentiality, stigma, and disclosure.
- Seller disclosureMaster Illinois seller disclosure: covered homes, exemptions, actual knowledge, material defects, report timing, supplements, buyer rights, and liability.
Property ownership quick definitions
Shorter entries for the property, rights, description, and co-ownership vocabulary that Property Ownership questions assume you already know. 26 terms.
- Real propertyLearn what real property means, how it differs from personal property, what a deed normally conveys, and how to solve fixture questions on the Illinois exam.
- Personal propertyLearn how personal property differs from real property, how it transfers, and when a movable item becomes a fixture for the Illinois real estate exam.
- FixtureUse the fixture factors to classify attached property, read sale agreements correctly, and avoid the trade-fixture trap on the Illinois real estate exam.
- Trade fixtureLearn why a trade fixture usually remains a business tenant's personal property, when it must be removed, and how it differs from an ordinary fixture.
- EmblementsLearn when annual cultivated crops are personal property, why a tenant may return to harvest, and when the emblements doctrine does not apply.
- Bundle of rightsLearn possession, control, enjoyment, exclusion, and disposition, plus how leases, easements, liens, and government powers divide or limit ownership rights.
- AppurtenanceLearn what an appurtenance is, why it normally passes with land, and how an easement appurtenant differs from a personal license or easement in gross.
- EncumbranceLearn how liens, easements, restrictions, leases, and encroachments affect real estate title, use, or value without always preventing a transfer.
- EasementLearn how an easement gives limited use of another's land, how it differs from possession or a license, and how easements are created and ended.
- Easement appurtenantLearn how an easement appurtenant benefits one parcel, burdens another, and follows both parcels when ownership changes on the real estate exam.
- Easement in grossLearn why an easement in gross benefits a person or entity, has no dominant tenement, and may remain binding when the servient land is sold.
- LicenseLearn why a real estate license is generally revocable personal permission, not an easement or lease, and how consent affects prescriptive-use questions.
- EncroachmentLearn how an encroachment crosses a property boundary, how it differs from an easement, and why surveys, agreements, and timing matter on the exam.
- Adverse possessionLearn Illinois's 20-year adverse-possession rule, the required possession elements, the separate seven-year color-of-title route, and common exam traps.
- Mineral rightsLearn how mineral rights can be severed from surface ownership, how deeds reserve them, and why access and extraction need separate review.
- Water rightsCompare riparian, littoral, prior-appropriation, and groundwater rights, then learn the Illinois reasonable-use limits that keep the exam rules accurate.
- Metes and boundsLearn how a metes-and-bounds description uses a point of beginning, directions, distances, and monuments, plus why the boundary must close.
- Lot and blockLearn how a lot-and-block legal description identifies land through a recorded subdivision plat and why the plat reference matters more than a street address.
- Rectangular survey systemLearn principal meridians, base lines, townships, ranges, 36-section numbering, aliquot parts, and acre calculations in the rectangular survey system.
- Gross living areaLearn what gross living area includes, why below-grade finished space is reported separately, and how current Fannie Mae terminology affects square footage.
- AcreMaster the exact 43,560-square-foot acre, square-mile and section relationships, rectangular lot calculations, and conversion traps for the real estate exam.
- Ownership in severaltyLearn why ownership in severalty means one legal owner, how an entity can qualify, and how it differs from tenancy in common and joint tenancy.
- Tenancy in commonLearn undivided ownership, unequal shares, separate transfer rights, no survivorship, partition, and Illinois's tenancy-in-common default rule.
- Joint tenancyLearn Illinois's express joint-tenancy rule, right of survivorship, four unities, transfer severance, and the difference from tenancy in common.
- CondominiumLearn Illinois condominium unit ownership, common-element percentages, limited common elements, association duties, assessments, and the co-op distinction.
- CooperativeLearn how co-op ownership uses corporation-level title, resident shares, a proprietary lease, monthly charges, and share-loan financing.
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Glossary FAQ
How many terms does this Illinois real estate glossary cover?
This glossary defines 126 terms. Each one is written for the exam rather than for general reading, so it names the content area the term belongs to and the distinction the question usually turns on.
Should you memorize every definition before the exam?
No. The exam rarely asks for a bare definition. It gives you facts and asks which term those facts match, so study the boundaries between neighboring terms rather than the wording of any single one.
Do the definitions cover Illinois rules or only national ones?
Both. Each entry gives the national rule first, then flags where Illinois law, the License Act, or IDFPR practice changes the answer. The Illinois portion is scored separately, so the difference matters.
Which terms are most worth your time?
Follow the exam weights shown next to each group below. Contracts, Agency, and Practice of Real Estate carry 19, 13, and 12 of the 100 scored national questions, so their vocabulary earns more than the smaller areas.
Official exam source
Content areas and weights come from the official PSI Illinois Candidate Information Booklet. Illinois definitions are checked against Illinois primary sources before publication. Reviewed August 1, 2026.