Illinois exam glossary
Buyer brokerage agreement
A buyer agreement sets the relationship with the brokerage: who represents you, what work is covered, how long it lasts and what you may owe. It is separate from the contract to buy a home. Read its terms before assuming that a seller will cover the fee or that the relationship can continue indefinitely.
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The short answer
An Illinois buyer brokerage agreement is the written engagement between a buyer and sponsoring broker. It identifies the designated agents, duties, compensation, payment time, signatures and duration. Current law requires definite automatic expiration plus an annual termination right for terms over one year. Read timing, exclusivity, disclosures and any applicable participation policy separately from the buyer-seller purchase contract.
Reviewed October 24, 2026. Buyer brokerage contracts appear at National VI.A.3 and Illinois brokerage agreements at II.D in the June 24, 2026 PSI broker outline. The whole national Agency domain is 13 of 100 scored questions; the whole state License Act domain is 16 of 40. These are not buyer-agreement quotas. This guide reconciles the July 13, 2026 rule with the current Act, including Section 10-25's expiration requirements.
Read the engagement, the money terms and the exit
- Identify the relationship and the actual parties. The sponsoring broker contracts with the buyer; the agreement specifically names the designated agent or agents. It is separate from the buyer-seller purchase contract. Required writing does not mean missing writing automatically proves no relationship: Section 15-50(a-5) preserves the stated oral-agreement claims and remedies. That provision is not permission to ignore the writing requirement.
- Use the correct timing rule. Rule .770(h) requires a buyer or tenant agreement before, or as soon as reasonably practical after, the described licensed purchase or lease assistance. It does not permit an indefinitely oral search. A listing-side licensee assisting an unrepresented buyer on the seller's behalf has the separate .770(i)(1) written nonrepresentation condition. A listing agent beginning buyer-side work as dual agent must satisfy (i)(2), including the buyer agreement and Section 15-45 compliance before that work.
- Check the required buyer-agreement contents. Rule .770(c) applies to exclusive and nonexclusive agreements: compensation basis or amount and payment time; sponsoring broker, designated-agent and buyer names; the required sponsor and buyer or authorized signatures; broker duties; and duration. The required .770(m) antidiscrimination statement is another obligation. A logo, agency notice or fee conversation alone does not supply the full agreement.
- Read duration with the controlling Act. Section 10-25 requires definite automatic expiration. If the term exceeds one year, it also requires annual termination on no more than 30 days' prior written notice. Those are cumulative protections for longer terms. The rule's agreement-type list still uses or; that is not a reason to choose an indefinite term. The Act says an agreement missing the required provision is void. Annual termination is not unrestricted cancellation on any date.
- Distinguish scope from exclusivity. The agreement can define covered geography, property types, named properties, exclusions and time. Exclusive status grants the stated sole right and requires Section 15-75 minimum services: accept and present offers and counteroffers; assist the specified offer, counteroffer and notice work through a signed agreement and satisfaction or waiver of all contingencies; and answer related questions. Under .770(b), omitted or waived minimum services make the agreement nonexclusive. That does not automatically eliminate all other duties or fees.
- Read the compensation obligation before calculating a shortfall. Identify the agreed basis or amount, when payment is due, any outside-payment credit and the actual payment received. Section 10-10 requires the stated compensation-policy and source disclosures, including written client disclosure when the sponsor receives payment from both sides. Section 15-40 says payment does not determine agency. Do not assume every buyer owes a set percentage, that seller funding is guaranteed or that an outside payment automatically permits double collection.
- Change and end the correct agreement. Rule .770(j)-(k) addresses signed written changes to commission amount or payment timing and prohibits a purchase-contract-form workaround. Read any termination and protection provisions separately. For a residential agreement covering four units or fewer with a protection period, (n) requires the stated no-fee-under-the-tail provision when a valid written agreement with another sponsor is entered during that period. Ending representation does not automatically cancel a pending purchase or settle every accrued claim. Accounting and confidentiality have continuing statutory treatment.
| Requirement | What to identify | Important limit |
|---|---|---|
| Parties and designation | Sponsoring broker, buyer and actual designated agents; required signatures or authorized signers | The individual agent and the brokerage have different roles |
| Compensation | Agreed basis or amount, payment time and applicable outside-payment treatment | No automatic seller funding or universal statutory percentage |
| Duties and scope | Promised work, covered property/search and any exclusions | A limited scope does not excuse applicable legal duties |
| Definite expiration | Automatic expiration within a definite period | Annual exit is not a substitute for an end date |
| Term over one year | Definite expiration plus annual exit with no more than 30 days' prior written notice | Not a statewide right to cancel on any day at will |
| Exclusive status | Section 15-75 minimum-service provisions | Omission or waiver produces nonexclusive treatment, not automatic absence of all duties |
| Additional compliance | Required antidiscrimination statement; agency and compensation disclosures | One notice or logo does not satisfy every separate function |
| Protection period | Actual tail terms and the .770(n) residential/new-agreement condition | Do not equate every later payment claim with a valid tail fee |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Buyer agreement vs. purchase contract | One engages the brokerage; the other governs buyer and seller's property bargain. Ending or amending one does not automatically do the same to the other. | Which agreement and parties are involved? |
| State timing vs. a private participation rule | Illinois .770(h) states the legal timing. An applicable MLS or brokerage requirement can add an earlier obligation. | Identify the rule the facts ask you to apply. |
| Client vs. customer | A buyer may be one designated agent's client and another agent's customer. Customer status does not mean the buyer lacks representation everywhere. | Whose relationship is being described? |
| Fee obligation vs. payment source | The buyer agreement and actual funding terms determine the calculation. A payment from someone else does not by itself change the represented client. | Who owes what, and which credit actually applies? |
| Nonexclusive vs. no agreement | A nonexclusive relationship can still involve written terms, duties and compensation. It is not automatically free or without agency. | Lack of exclusivity is not lack of every obligation. |
| Expiration vs. an annual exit | Definite expiration ends the stated term. A longer-than-one-year agreement also needs the statutory annual client termination right. | Current Section 10-25 requires both for the longer term. |
| Protection fee vs. every accrued obligation | A post-term tail has its own conditions and residential exception. Earlier earned claims or a separate purchase do not disappear merely because representation ended. | Read the source and timing of the claimed fee. |
Work through the facts
The long-term agreement has only an end date
A two-year buyer agreement has definite automatic expiration but expressly denies any annual client termination right.
- The term exceeds one year.
- Current Section 10-25 requires the annual right in addition to definite expiration.
- The notice requirement for that right cannot exceed 30 days.
Answer: The definite end date alone does not satisfy the longer-term requirement.
Annual exit without definite expiration
An agreement continues indefinitely and lets the buyer terminate annually on 30 days' written notice. The drafter relies on the rule's or wording.
- The current Act requires definite automatic expiration.
- An annual exit does not supply an automatic endpoint.
- The rule list must be read with the controlling statute.
Answer: The agreement lacks the required definite expiration; the Act states the consequence for a missing required provision.
Outside funding is credited as agreed
The agreement imposes a $9,000 buyer obligation and expressly credits a $6,000 seller-side payment received by the brokerage. No other credit or amendment applies.
- The agreement supplies the obligation and credit mechanism.
- The stated outside payment has actually been received.
- $9,000 minus $6,000 leaves $3,000.
Answer: The stated remaining buyer obligation is $3,000; the funding does not switch the buyer's agent to the seller.
An exclusive label waives the minimum work
A buyer agreement calls itself exclusive but waives the broker's assistance in developing, communicating and negotiating offers and related notices.
- Section 15-75 requires the minimum-service provisions for exclusivity.
- Rule .770(b)(2) addresses omission or waiver.
- Nonexclusive treatment does not itself determine every fee or other duty.
Answer: The agreement is treated as nonexclusive under the stated rule.
A separate fee change is put in the purchase offer
An agent puts a lower brokerage fee into the buyer's property offer without a proper signed change to the brokerage agreement.
- The two contracts involve different relationships.
- Rule .770(k) bars using real estate contract forms to change the agreed commission payment terms.
- The written-and-signed brokerage change requirements remain.
Answer: The purchase-form clause is not a permitted workaround.
Two clients compete for the same unit
The same designated agent prepares offers for two buyer clients on the same condominium and has reason to know the seller will consider them together.
- Rule .830 includes reason to know, not only admitted actual knowledge.
- Give the affected clients written disclosure of the contemporaneous-offer situation.
- Refer a requesting client to another designated agent while protecting confidential offer information.
Answer: Disclose and provide the requested referral; do not share the buyers' private price limits.
The residential tail meets the new-agreement condition
An agreement for residential property of four units or fewer has ended. During its protection period, the buyer enters a valid written agreement with another sponsoring broker. The former broker claims a commission solely under the tail.
- Rule .770(n) requires the specified no-fee provision for this situation.
- The new agreement is valid, written and made during the protection period.
- The issue is the former tail claim, not an invented release of all unrelated earlier obligations.
Answer: Apply the required protection-period exception to the stated former tail claim.
The relationship is kept oral for weeks
A licensee provides repeated purchase-search, showing and negotiation assistance for six weeks despite reasonable opportunities to complete the buyer agreement. It remains entirely oral.
- Rule .770(h) requires the writing before or as soon as reasonably practical after the described assistance.
- The stated repeated opportunities defeat an indefinite-delay explanation.
- Possible oral claims under Section 15-50(a-5) do not excuse the writing duty.
Answer: The licensee has not satisfied the stated written-agreement requirement.
Mistakes to avoid
- The annual exit permits an indefinite agreement. Current Section 10-25 also requires definite automatic expiration.
- Every buyer agreement has a one-year maximum. A longer term can be contemplated, but it needs definite expiration and the statutory annual termination right.
- The seller must cover the fee. Read the actual compensation obligation, outside funding and credits; do not guarantee a payment source.
- Nonexclusive means no duties or fees. The written engagement and applicable duties still matter.
- The listing agent automatically represents every visitor. Apply actual relationships, the written nonrepresentation condition and the separate requirements before dual buyer-side work.
- The client can now cancel any agreement on any date with 30 days' notice. The statutory right is annual for terms exceeding one year; additional termination rights depend on their actual source.
Check your understanding
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. A two-year buyer agreement has definite automatic expiration but no annual client exit. What correction does current Section 10-25 require?
- Require at least 90 days' notice instead.
- Remove the definite expiration date.
- Retain definite expiration and add annual termination on no more than 30 days' prior written notice.
- Nothing; an end date alone is sufficient for every term.
Show answer and explanation
Answer: C. Retain definite expiration and add annual termination on no more than 30 days' prior written notice.
For a term exceeding one year, the current Act requires both protections. An indefinite term, a 90-day minimum or no annual right conflicts with that requirement. It does not create unrestricted cancellation on any day.
2. An indefinite agreement permits annual exit on 30 days' notice. Which answer is correct under the current Act?
- It still lacks required definite automatic expiration.
- The buyer must keep it forever.
- It automatically becomes a purchase contract.
- The annual exit replaces every expiration requirement.
Show answer and explanation
Answer: A. It still lacks required definite automatic expiration.
Section 10-25 requires automatic expiration within a definite period and the added annual right for a term over one year. The older rule list's or wording does not authorize indefinite duration, permanent obligations or conversion into the property contract.
3. Which contents are required for an exclusive or nonexclusive buyer agreement by .770(c)?
- Only a company logo.
- Only the seller's sale price.
- Only an oral promise that someone else will pay.
- The stated compensation basis or amount and payment time, identities, required signatures, broker duties and duration.
Show answer and explanation
Answer: D. The stated compensation basis or amount and payment time, identities, required signatures, broker duties and duration.
The rule specifies the listed agreement contents. A logo, property price or oral funding assurance does not supply them. Other requirements, including the antidiscrimination statement and current statutory expiration protections, also apply.
4. An agreement states a $9,000 buyer obligation and credits a $6,000 seller-side payment actually received. No other adjustment applies. What is the remaining obligation?
- $9,000 plus another $6,000.
- Zero automatically because a seller paid something.
- $6,000.
- $3,000 under the stated credit terms.
Show answer and explanation
Answer: D. $3,000 under the stated credit terms.
The stated credit reduces the $9,000 obligation by $6,000, leaving $3,000. Neither a double collection, a different subtraction nor an automatic complete discharge follows. Other real arrangements require their own written terms and actual funding facts.
5. An agreement calls itself exclusive but waives the required offer-negotiation assistance. What does .770(b)(2) provide?
- It is considered nonexclusive; other duties and fee questions still need their own analysis.
- All written obligations and fees necessarily disappear.
- The waiver guarantees exclusivity.
- The buyer automatically receives title.
Show answer and explanation
Answer: A. It is considered nonexclusive; other duties and fee questions still need their own analysis.
Omission or waiver of the statutory minimum services causes nonexclusive treatment. That does not preserve the exclusive label, transfer title or automatically resolve every separate duty or compensation issue.
6. The same designated agent prepares two clients' offers on the same unit and has reason to know the seller will consider them together. What is required?
- Share each buyer's maximum price with the other.
- Written disclosure to affected clients and referral to another designated agent if requested.
- Automatically represent the seller instead.
- Ignore the issue without admitted actual knowledge.
Show answer and explanation
Answer: B. Written disclosure to affected clients and referral to another designated agent if requested.
Rule .830 includes knowledge or reason to know of simultaneous consideration. The required writing and requested referral do not authorize disclosure of confidential offer strategy or a switch to seller representation. Different facts can change whether the rule is triggered.
7. A former residential agreement for four units or fewer has a tail. During it the buyer enters a valid written agreement with another sponsor. What does .770(n) require the former agreement to provide?
- Automatic cancellation of the buyer-seller purchase.
- The former tail always overrides the new agreement.
- No commission or fee due under that protection-period provision in the stated situation.
- Erasure of every unrelated accrued obligation.
Show answer and explanation
Answer: C. No commission or fee due under that protection-period provision in the stated situation.
The rule requires the stated protection-period exception. Its coverage and valid-new-written-agreement conditions matter. It does not cancel a separate purchase, automatically preserve the old tail claim or release every unrelated prior obligation.
8. A licensee uses the buyer's purchase-offer form to change previously agreed commission payment terms in the buyer agreement. Which answer is best?
- A title saying Amendment removes all requirements.
- An MLS note alone cures it.
- Any seller signature cures it.
- Rule .770(k) bars that form workaround; apply the proper written-and-signed brokerage change process.
Show answer and explanation
Answer: D. Rule .770(k) bars that form workaround; apply the proper written-and-signed brokerage change process.
The purchase contract and brokerage engagement are different agreements. The rule prohibits this use of real estate contract forms, and the related commission change provision requires the stated writing and signatures. A seller signature, MLS note or heading does not replace the correct process.
9. Considering only Illinois .770(h), when is the buyer agreement required for the described licensed purchase assistance?
- Only at closing regardless of weeks of service.
- Before, or as soon as reasonably practical after, the described assistance.
- Never if the buyer could later allege an oral agreement.
- Only when a seller offers compensation.
Show answer and explanation
Answer: B. Before, or as soon as reasonably practical after, the described assistance.
That is the state rule's timing. A payment source, automatic closing delay or the oral-claims provision does not excuse the required writing. The question limits the rule being tested; an applicable private participation rule or a specific earlier legal condition must be checked separately.
Common questions
What is an Illinois buyer brokerage agreement?
It is the written engagement between the buyer and sponsoring broker for licensed purchase assistance and representation. It names the designated agents and defines the required duties, compensation, signatures and duration. Search scope and additional terms should be read with the applicable law. It is separate from the buyer-seller purchase contract.
Does Illinois require the buyer agreement in writing?
Yes. Section 15-50 and current Rule .770 require the writing. Subsection (h) specifies before or as soon as reasonably practical after the described licensed assistance. The oral-claim protection in Section 15-50(a-5) is not an exemption from required writing or a reason to keep providing an indefinitely oral service.
Must I sign before touring a home?
Distinguish the applicable rules. Illinois .770(h) supplies the state timing. NAR's consumer guide describes an agreement before touring when working with an agent, while visiting an open house alone does not trigger that NAR agreement requirement. Check whether the participation policy applies and comply with any earlier obligation. A private-policy exception does not waive Illinois agency-notice requirements. The state rule is not an indefinite grace period.
What must the agreement contain?
Rule .770(c) lists compensation basis or amount and payment time; sponsor, designated-agent and buyer names; required sponsor and buyer or authorized signatures; broker duties; and duration. Current Section 10-25 requires definite expiration and the added annual right for terms over one year. Rule .770(m) requires the antidiscrimination statement. Additional scope and transaction terms must also be read.
Is automatic expiration optional if I can terminate annually?
No. Current Section 10-25 requires definite automatic expiration and, for a term longer than one year, annual termination on no more than 30 days' prior written notice. A longer term needs both. The agreement-type rule list's or wording must not be used to override that statute. The Act says an agreement lacking the required provision is void.
Does every buyer agreement end after one year?
The statute does not impose that universal maximum. For a term over one year, the annual right is added to definite expiration. It is an annual termination right, not a general right to cancel at will on any date. Read additional cancellation clauses and the required notice process separately.
Who pays the buyer broker, and is there a standard fee?
Read the negotiated agreement and actual funding terms. NAR's consumer guide describes buyer agreements as negotiable. Do not assume a universal percentage or guaranteed seller payment. Seller-side or other funds affect the buyer's obligation as the agreement provides, and Section 15-40 says the payment source does not determine agency. A particular payment also needs its applicable disclosures and legal compliance.
What compensation must be disclosed?
Section 10-10 requires client disclosure of the sponsor's compensation policy and terms, cooperating-broker amounts and third-party compensation sources as stated. If the sponsor receives compensation from both buyer and seller in one transaction, subsection (d) requires written client disclosure of that fact. Section 15-35(b) separately requires the policy discussion. These duties do not replace agreement terms or approve every funding arrangement.
Can the purchase contract change the buyer-broker fee?
Rule .770(j) requires brokerage agreements to provide that changes to commission amount or payment timing are not valid or binding unless written and signed by the parties. Subsection (k) prohibits using real estate contract forms to change previously agreed commission payment terms. A separate funding or concession provision is not a blanket substitute for a proper brokerage amendment.
What makes a buyer agreement exclusive?
Apply the statutory definition, actual scope and required minimum services. Section 15-75 requires the specified offer/counteroffer delivery and presentation, assistance with offers and related notices through a signed agreement and satisfied or waived contingencies, and answers to related questions. Under .770(b), omission or waiver produces nonexclusive treatment. It does not automatically remove every duty or fee.
Can I work with more than one brokerage?
Read the agreements before assuming so. Nonexclusive terms may allow other relationships; an overlapping exclusive engagement can create conflict or compensation exposure. Compare the property, geography, exclusions, purpose and term. The fact that another agent opened a door does not automatically terminate an existing engagement or establish a release.
What duties does a buyer agent owe?
Section 15-15 includes agreement performance, pursuit of acceptable terms, the stated offer-presentation and known-material-fact duties, accounting, lawful client directions, best interests, reasonable skill and care, confidentiality and legal compliance. Exclusive minimum services add their own specific requirements. The agreement does not create a guarantee of financing, title, a particular price or discovery of every unknown defect.
What if the same agent represents two buyers for the same home?
Section 15-15(b) and Rule .830 address the defined contemporaneous-offer situation: the same designated agent, two or more clients, the same parcel or unit, and knowledge or reason to know the owner or representative will consider the offers together. Provide written disclosure to affected clients and the requested referral to another designated agent. That notice does not authorize sharing confidential offer amounts or price limits.
Does a buyer agreement with the listing agent authorize dual agency?
Not by itself. For the .770(i)(2) route, the buyer agreement and compliance with Section 15-45 must precede services on the buyer's behalf. Informed written consent from all clients is required before dual conduct, with separate transaction-specific written confirmation under the statute. Required confirmation does not replace prior consent, and consent cannot remove prohibited advice or ownership-based dual-role restrictions.
What happens to the protection period when I hire a new broker?
For an agreement covering residential property of four units or fewer with a post-termination protection period, .770(n) requires the stated no-fee-under-the-tail provision when a valid written brokerage agreement with another sponsor is entered during that period. Establish those conditions and the actual claim. Do not make it a universal release of every fee earned earlier or every unrelated obligation. Merely hiring a different individual within the same sponsoring brokerage is not the stated different-sponsor condition.
What survives expiration or termination?
The agreement and applicable law determine the ending and any accrued rights. Section 15-30 preserves the stated accounting and confidentiality duties, subject to its written-agreement qualification and the confidential-information rules. A pending buyer-seller purchase is a separate contract. Required transaction records, including the brokerage agreement and disclosures, must also be retained under .755; its transaction-record provision requires five years.
Can the agreement be electronic, and when do I get a copy?
Current 815 ILCS 333 recognizes electronic records and signatures within its scope and conditions, including electronic agreement, attribution and retainable delivery. It replaced the former electronic-commerce statute. Rule .775 applies to physical and electronic writings and requires a true copy to the person signing or initialing within 24 hours of that act, rather than a universal wait until closing or every signature is complete.
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Official sources and scope
Checked October 24, 2026. Current official Illinois text was read alongside relevant same-session source reviews for agency, electronic records and copies; the actual adopted Register text was also read for transaction retention. Section 10-25 controls the expiration wording despite the rule list's or language. Its current source includes the August 21, 2026 technical revisory Act; this page does not claim that the duty first began on that date. NAR's guide is used for the separate policy distinction, not as Illinois law or a complete MLS-policy audit. No particular agreement, fee, termination, showing, electronic signature or payment is approved.
- PSI June 24, 2026 booklet: National VI.A.3 and Illinois II.D
- 68 Ill. Adm. Code 1450.770, July 13, 2026: required terms, timing and protection periods
- 225 ILCS 454/10-25: definite expiration and the additional annual termination right
- 225 ILCS 454/15-50: written agreement, designated agents and oral-claim limits
- 225 ILCS 454/15-75: exclusive-agreement minimum services
- 225 ILCS 454/10-10: compensation policy, sources and both-side payment disclosure
- 225 ILCS 454, Article 15: client duties, agency disclosures, payment and dual agency
- 225 ILCS 454/1-10: brokerage, exclusive-agreement, client and customer definitions
- 68 Ill. Adm. Code 1450.830: defined contemporaneous offers
- 68 Ill. Adm. Code 1450.755(a)(3): transaction records, including brokerage agreements
- 68 Ill. Adm. Code 1450.775: signed documents and signer copies
- 815 ILCS 333: current electronic-transactions law
- NAR consumer guide: touring and open-house distinction, a separate participation-policy framework
This is exam preparation, not advice for a specific transaction. State law and the applicable facts control. Our editorial and corrections process explains how to report an issue.