- Official section
- National VI: Agency
- Broker weight
- Approximately 13 of 100 scored national questions
- Expected scored items
- The current PSI broker outline assigns about 13% of the national portion to Agency, the second-largest national area
National practice guide
Draw the people map before choosing the Agency rule
Agency questions become manageable when every person gets a role. Write client, agent, customer, other party, and sponsoring brokerage beside the names. Then mark who granted authority, what the licensee may do, which information is confidential, and what must be disclosed. Most wrong answers apply a real duty to the wrong person, confuse payment with representation, or overlook that authority already ended.
Last updated: August 1, 2026
What skill does this practice set measure?
Short answer: Start every Agency problem with a relationship map. Identify the principal or client, agent, customer, third party, and brokerage firm. Find the agreement, conduct, ratification, estoppel, power of attorney, or other source of authority. Define its scope and determine whether it is actual, apparent, special, general, or universal. Then apply the correct client duty, customer duty, agency disclosure, compensation disclosure, or conflict rule. For listings and buyer or tenant representation, read exclusivity, duration, scope, authority, compensation, protection terms, and termination separately. Finally, ask whether performance, expiration, mutual agreement, revocation, renunciation, death, incapacity, destruction, breach, or law ended the relationship, and identify any surviving confidentiality, accounting, or contract issue.
The national outline uses general agency concepts, but relationship categories, disclosure timing, dual agency, compensation, agreements, and required forms vary by state. Illinois generally treats a licensee working with a consumer as the consumer's designated agent unless a written agreement establishes a different relationship, subject to statutory exceptions and details. A sponsoring broker can designate different licensees for different clients in the same transaction. Use Illinois terminology for Illinois questions and the stated national rule for national questions. This guide is exam preparation, not legal advice or a substitute for the current agreement and law. Sources were checked through August 1, 2026.
Ready to work the set?
These questions are original study items aligned to the published outline. They are not copied, recalled, or predicted PSI questions.
1. A buyer's agent is paid from transaction funds supplied by the seller at closing. Which fact determines the agent's client?
- The representation relationship created with the buyer
- The physical source of the closing funds
- The listing price
- The settlement date
Show answer and explanation
Answer: The representation relationship created with the buyer
Consent, authority, agreement, conduct, and disclosure establish agency. Compensation source alone does not.
2. Which authority arises from a principal's manifestations that reasonably lead a third party to believe an agent is authorized?
- Apparent authority
- Secret authority
- Universal ownership
- Customer authority
Show answer and explanation
Answer: Apparent authority
Apparent authority concerns the appearance the principal creates for the third party.
3. A seller privately tells the listing agent the lowest acceptable price. Which duty most directly protects that information?
- Confidentiality
- Recording
- Appraisal
- Subrogation
Show answer and explanation
Answer: Confidentiality
A client's bargaining position is ordinarily confidential unless disclosure is permitted or legally required.
4. What should an agent do when a client orders unlawful housing discrimination?
- Refuse the unlawful instruction
- Obey because loyalty is absolute
- Follow it only by telephone
- Transfer the instruction to a customer
Show answer and explanation
Answer: Refuse the unlawful instruction
The obedience duty applies only to lawful instructions within the relationship.
5. An Illinois brokerage assigns one licensee to the seller and another to the buyer. Neither represents both. Which concept best fits?
- Designated agency
- Automatic dual agency for both licensees
- Universal agency
- No agency because the firm is shared
Show answer and explanation
Answer: Designated agency
Illinois designated agency can place different licensees with different clients inside one sponsoring brokerage.
Which answer habits should you watch for?
- Trap
- Let the commission check choose the client.
- Correction
- Agency follows consent, authority, agreement, conduct, and disclosure, not payment source alone.
- Trap
- Assume a customer is owed no duties.
- Correction
- A non-client is still owed honesty and every duty the governing law imposes.
- Trap
- Treat an agent's claim as apparent authority.
- Correction
- Apparent authority must trace to the principal's manifestations to the third party.
- Trap
- Give a special agent unlimited signing power.
- Correction
- Limited brokerage authority does not automatically authorize deeds, mortgages, or contracts for the client.
- Trap
- Obey an unlawful client instruction.
- Correction
- Obedience covers lawful instructions within authority, never discrimination, fraud, or concealment required by law to be disclosed.
- Trap
- Reveal motivation as though it were a property defect.
- Correction
- Confidential negotiating information differs from a material property fact that law requires disclosed.
- Trap
- Assume all conflicts disappear after agency disclosure.
- Correction
- Personal interest, compensation, and competing representation can require distinct disclosure and consent.
- Trap
- Call every one-firm transaction dual agency.
- Correction
- Identify the individual designated agents and whether the same licensee represents adverse parties.
- Trap
- Import transaction brokerage into every state.
- Correction
- Use only the relationship categories and duties recognized by the governing jurisdiction.
- Trap
- Assume revocation erases the brokerage contract.
- Correction
- Authority may end even though a breach, damages, or compensation issue survives.
- Trap
- Assume confidentiality ends at midnight on expiration.
- Correction
- Confidentiality can survive termination subject to law, permission, and required disclosure.
- Trap
- Ignore money after representation ends.
- Correction
- Accounting, safeguarding, records, and lawful disbursement remain separate obligations.
How should you reason through a difficult item?
Map representation before payment
Scenario: A buyer signs a representation agreement with Brokerage B. The listing side agrees that Brokerage B's fee will be paid from transaction funds at closing. Whom does Brokerage B represent?
- The buyer and Brokerage B created the representation relationship.
- The payment source is economically relevant but does not determine agency by itself.
- Duties follow the actual relationship, agreement, and required disclosures.
Answer: Brokerage B represents the buyer under the stated agreement; closing payment from the seller's side does not change that result alone.
Protect negotiating information
Scenario: A seller tells the listing agent that a job starts next week and any reasonable offer will work. A buyer asks why the seller is moving and how low the seller will go.
- The information concerns motivation and bargaining flexibility.
- It came from the represented seller and can weaken the seller's position.
- No permission or legal duty to reveal it is stated.
Answer: The listing agent should protect the seller's confidential negotiating information.
Reject an unlawful instruction
Scenario: A landlord-client tells the agent not to show an available home to families with children and calls the instruction confidential.
- Lawful obedience does not include illegal discrimination.
- Calling an unlawful instruction confidential does not make compliance lawful.
- The agent must refuse and follow fair housing and brokerage procedures.
Answer: The agent must refuse the discriminatory instruction.
Test apparent authority correctly
Scenario: An owner repeatedly allows a property manager to negotiate routine leases in front of tenants. The owner privately tells the manager to stop, but gives no notice to a tenant who reasonably relies on the prior pattern.
- Private withdrawal may end actual authority between principal and agent.
- The tenant's belief can depend on the owner's prior manifestations and lack of notice.
- Apparent authority is analyzed from principal-created appearances, not the agent's unsupported claim.
Answer: The facts raise apparent-authority analysis despite the private limit on actual authority.
Separate revocation and liability
Scenario: A seller withdraws the listing broker's authority halfway through an exclusive term without a contract basis. May the broker keep marketing because the contract date has not arrived?
- The principal's withdrawal ends the broker's current authority to represent the seller.
- The unexpired agreement can still matter to breach, damages, or compensation rights.
- Authority to act and contract liability are related but not identical questions.
Answer: No. The broker should stop acting, while any surviving contract claim is analyzed separately.
Distinguish designated agency from dual agency
Scenario: One Illinois sponsoring brokerage designates Licensee S for the seller and Licensee B for the buyer. Neither individual licensee represents both parties. Is each automatically a dual agent?
- The parties work with separate designated licensees.
- A shared sponsoring brokerage does not by itself make each individual a dual agent.
- The Illinois facts must be evaluated under the designated-agency framework and required disclosures.
Answer: No. Separate designated agents in one firm are not automatically dual agents merely because the brokerage is shared.
How do you answer Agency practice questions?
- List every consumer, licensee, sponsoring brokerage, principal, client, customer, and third party named or implied.
- Find the agreement, conduct, power of attorney, disclosure, or principal manifestation that creates or appears to create authority.
- Define the authorized task, property, time, and limit before judging the licensee's act.
- Decide whether the affected person is a client or customer of this licensee at this moment.
- Name the precise duty: loyalty, lawful obedience, disclosure, confidentiality, accounting, reasonable care, honesty, or material-fact disclosure.
- Check agency, compensation, ownership, referral, and competing-representation disclosures separately.
- Place creation, change, consent, performance, revocation, expiration, and attempted action in chronological order.
- For Illinois facts, identify each designated agent and apply Article 15 rather than importing another state's transaction-broker label.
- Separate an ended power to act from surviving confidentiality, accounting, record, compensation, or damages issues.
- Choose the answer that protects required confidences, reveals legally required facts, stays within authority, and documents required consent.
- Fact
- Seller reveals bottom line
- First question
- Whose confidence?
- Likely exam direction
- Protect negotiating information
- Fact
- Buyer asks seller's agent for a blank form
- First question
- Representation or ministerial help?
- Likely exam direction
- Help alone need not create agency
- Fact
- Seller pays buyer broker
- First question
- Who consented to representation?
- Likely exam direction
- Payment alone does not decide agency
- Fact
- Agent wants to buy listing
- First question
- Personal interest disclosed?
- Likely exam direction
- Disclose and obtain required consent
- Fact
- Principal told third party agent may sign
- First question
- Apparent authority?
- Likely exam direction
- Analyze principal's manifestation
- Fact
- Listing expires
- First question
- Authority still active?
- Likely exam direction
- Stop acting unless renewed
- Fact
- Client orders discrimination
- First question
- Instruction lawful?
- Likely exam direction
- Refuse the unlawful instruction
- Fact
- One firm has buyer and seller
- First question
- Who are designated agents?
- Likely exam direction
- Do not assume dual agency
- Fact
- Same licensee represents both sides
- First question
- Written informed consent?
- Likely exam direction
- Apply Illinois dual-agency requirements
- Fact
- Agency ends with escrow unresolved
- First question
- Which duties survive?
- Likely exam direction
- Account and disburse lawfully
Which outline areas does this set sample?
- Topic
- Agency relationships
- What to know
- Principal, client, agent, subagent, customer, third party, brokerage, consent, control, representation, and non-agency service
- Best exam move
- Label every person and firm before applying a duty or disclosure.
- Topic
- Creation of agency
- What to know
- Express agreement, implied conduct, ratification, estoppel, written terms, oral agreement where permitted, consent, and authority
- Best exam move
- Find the principal's manifestation and the agent's agreement rather than inferring agency from payment alone.
- Topic
- Actual and apparent authority
- What to know
- Express actual authority, implied actual authority, apparent authority, principal manifestations, third-party belief, scope, reliance, and limits
- Best exam move
- Ask whether the signal ran from principal to agent or from principal to third party.
- Topic
- Agent classifications
- What to know
- Special agent, general agent, universal agent, limited task, continuing business, property manager, broker, and attorney-in-fact
- Best exam move
- Match the breadth and duration of authority instead of the person's job title alone.
- Topic
- Listing agreements
- What to know
- Exclusive right to sell, exclusive agency, open listing, net listing risk, authority, duration, compensation, termination, and protection clause
- Best exam move
- Ask who may produce the buyer and when the stated compensation is earned.
- Topic
- Buyer and tenant representation
- What to know
- Exclusive agreement, nonexclusive agreement, property scope, geography, term, duties, compensation, retainer, termination, and conflicts
- Best exam move
- Read scope, exclusivity, payment, and expiration as separate contract terms.
- Topic
- Other brokerage relationships
- What to know
- Facilitator, transaction broker, non-agent, cooperating broker, subagency, ministerial act, state authorization, and disclosure
- Best exam move
- Use only the relationship category allowed and described by the governing jurisdiction.
- Topic
- Powers of attorney
- What to know
- Principal, agent or attorney-in-fact, written power, limited authority, broad authority, duration, revocation, incapacity, and signature capacity
- Best exam move
- Read the instrument before assuming authority to sell, mortgage, lease, or sign.
- Topic
- Loyalty and lawful obedience
- What to know
- Client interest, conflict, secret profit, self-dealing, lawful instruction, fair housing, fraud, authority, and informed consent
- Best exam move
- Protect the client's lawful interest but reject illegal or dishonest instructions.
- Topic
- Disclosure to clients
- What to know
- Material information, transaction facts, offers, conflicts, compensation, personal interest, adverse information, and timely communication
- Best exam move
- Ask what a reasonable client needs to make an informed decision and what law requires.
- Topic
- Confidentiality
- What to know
- Motivation, price flexibility, financial position, negotiating strategy, permission, required disclosure, duration, termination, and dual agency limits
- Best exam move
- Separate confidential bargaining information from a material fact that cannot lawfully be concealed.
- Topic
- Accounting and care
- What to know
- Money, property, documents, escrow, records, reasonable skill, diligence, verification, communication, and professional boundaries
- Best exam move
- Safeguard what is entrusted and use the competence expected of a licensee.
- Topic
- Duties to customers
- What to know
- Honesty, good faith, material facts, accurate statements, fair dealing, ministerial help, no advocacy, and no false implication of representation
- Best exam move
- Do not give customer status the false meaning of no duties at all.
- Topic
- Agency disclosure
- What to know
- Identity of represented party, non-agency notice, designated agent, timing, acknowledgment, change in relationship, and confidential information
- Best exam move
- Determine what must be disclosed before a consumer shares negotiating information or relies on the licensee.
- Topic
- Conflicts and self-interest
- What to know
- Dual representation, licensee ownership, related party, referral benefit, compensation, competing clients, disclosure, consent, and prohibition
- Best exam move
- Identify the interest, the affected parties, timing, required consent, and whether acting remains permissible.
- Topic
- Termination of agency
- What to know
- Performance, expiration, mutual agreement, revocation, renunciation, death, incapacity, destruction, breach, and operation of law
- Best exam move
- Name the terminating event and the exact moment authority ends.
- Topic
- Surviving obligations
- What to know
- Confidentiality, accounting, records, return of property, compensation claim, protection clause, damages, and post-termination conduct
- Best exam move
- Do not assume every duty and contract right disappears with authority.
- Topic
- Illinois designated and dual agency
- What to know
- Designated agent, sponsoring broker, separate licensees, dual agent, written disclosure, informed consent, statutory limits, and documentation
- Best exam move
- Identify the individual designated agents before deciding whether one licensee represents both sides.
What should you sort out before you begin?
- Terms
- Client vs. customer
- Difference
- A client is represented and receives the duties of that relationship. A customer is not represented by that licensee but remains entitled to honesty and legally required treatment.
- Question cue
- Advocacy versus honest non-representational assistance.
- Terms
- Principal vs. agent
- Difference
- The principal grants authority and controls the objective. The agent accepts authority and acts within its authorized scope.
- Question cue
- Authority giver versus authorized actor.
- Terms
- Actual vs. apparent authority
- Difference
- Actual authority follows the principal's communication to the agent. Apparent authority follows the principal's manifestation that reasonably influences a third party.
- Question cue
- Principal to agent versus principal to third party.
- Terms
- Special vs. general agent
- Difference
- A special agent handles a limited transaction or act. A general agent handles a continuing range of matters within an ongoing role.
- Question cue
- One defined objective versus continuing operations.
- Terms
- Express vs. implied agency
- Difference
- Express agency arises from stated agreement. Implied agency is inferred from conduct and circumstances, subject to state documentation rules.
- Question cue
- Words of agreement versus behavior suggesting assent.
- Terms
- Exclusive right to sell vs. exclusive agency
- Difference
- An exclusive-right listing generally earns the agreed compensation regardless of who produces the buyer. Exclusive agency commonly preserves an owner-sale exception.
- Question cue
- Owner finds buyer: compensation or exception?
- Terms
- Open vs. exclusive listing
- Difference
- An open listing can involve several brokers, usually rewarding the procuring broker. An exclusive listing grants the contracted broker the exclusivity defined by its terms.
- Question cue
- Several competing brokers versus one exclusive agreement.
- Terms
- Agency termination vs. contract liability
- Difference
- Authority may end when the principal revokes it, while wrongful early termination may still create a contract or compensation dispute.
- Question cue
- May the agent act now versus may a claim survive?
- Terms
- Agency disclosure vs. conflict disclosure
- Difference
- Agency disclosure identifies whom the licensee represents. Conflict disclosure identifies a personal, financial, or competing interest affecting judgment.
- Question cue
- Who is represented versus what interest interferes?
- Terms
- Designated agency vs. dual agency
- Difference
- Designated agency can place separate licensees in one brokerage with different clients. Dual agency exists when the same licensee represents adverse parties with required consent.
- Question cue
- Separate individual agents versus one agent for both.
How should you review your results?
- Session
- Session 1
- Focus
- Map relationships and creation
- Proof you are ready
- Label principal, agent, client, customer, third party, firm, consent, and authority in 35 scenarios without using payment as a shortcut.
- Session
- Session 2
- Focus
- Classify authority and agreements
- Proof you are ready
- Separate actual, apparent, special, general, power-of-attorney, listing, buyer, tenant, exclusive, and open arrangements in 35 prompts.
- Session
- Session 3
- Focus
- Apply client and customer duties
- Proof you are ready
- Name loyalty, lawful obedience, disclosure, confidentiality, accounting, care, honesty, and material-fact duties from facts alone.
- Session
- Session 4
- Focus
- Practice disclosures and conflicts
- Proof you are ready
- Identify representation, non-agency, compensation, self-interest, competing-client, and dual-agency disclosures, recipients, and timing.
- Session
- Session 5
- Focus
- End relationships correctly
- Proof you are ready
- Build 30 timelines involving performance, expiration, mutual release, revocation, renunciation, death, incapacity, breach, and surviving duties.
- Session
- Session 6
- Focus
- Complete mixed Agency practice
- Proof you are ready
- Score at least 85% twice on fresh timed sets and explain the relationship, authority, duty, disclosure, time, and closest distractor for every miss.
Do not count recognition as mastery. Close the notes and explain the rule, apply it to a new fact pattern, and identify why each distractor fails.
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Questions students ask about Real Estate Agency Practice Questions: Illinois Exam Guide
How many Agency questions are on the national real estate exam?
The PSI broker outline effective June 24, 2026 assigns approximately 13 of the 100 scored national questions to Agency. That makes Agency the second-largest national area after Contracts and a strong place to earn points through careful relationship mapping.
What Agency topics should I practice for the Illinois broker exam?
Practice creation of agency and non-agency relationships, listing agreements, buyer and tenant representation, authority, powers of attorney, termination, client duties, customer duties, agency disclosure, compensation disclosure, self-interest, and conflicts. Then layer Illinois designated-agency rules onto Illinois-specific scenarios.
What is the difference between a client and a customer?
A client is represented by the licensee or brokerage relationship identified in the facts. A customer is not represented by that licensee but is still owed honesty, required material-fact disclosure, accurate information, and other duties imposed by law. Customer does not mean unprotected stranger.
Does the person who pays the commission become the client?
No. Compensation source does not by itself create agency. Identify consent, the brokerage agreement, the scope of authority, conduct, and required disclosures. Illinois law expressly states that payment or a promise of payment is not determinative of whether an agency relationship exists.
What duties does an agent owe a client?
A useful national framework includes loyalty, lawful obedience, disclosure, confidentiality, reasonable care and skill, and accounting. Apply the exact law and agreement in a real transaction. An agent never has a duty to obey an unlawful instruction or conceal a fact that law requires disclosed.
What is actual authority compared with apparent authority?
Actual authority comes from the principal's manifestations to the agent and may be express or implied within the granted role. Apparent authority depends on the principal's manifestations to a third party that reasonably create an appearance of authority. The agent cannot manufacture apparent authority through a private claim alone.
Can agency end while a contract claim remains?
Yes. Withdrawal of authority can end the agent's ability to act, yet an unjustified early termination may still breach a brokerage agreement. Separate the agency relationship, the service contract, possible compensation rights, confidentiality, accounting, and other duties that may survive.
What is dual agency in Illinois?
Illinois permits a licensee to act as a dual agent only within the Real Estate License Act's written disclosure and informed-consent requirements. Designated agency within one sponsoring brokerage is not automatically dual agency. Identify the individual designated agents before applying the dual-agency label.
What Agency practice score should I target?
Target at least 85% on fresh mixed Agency sets. For every miss, state who represented whom, the source and limit of authority, the exact duty or disclosure, when it arose, and why the closest option would fit a different relationship or time.
Are these official PSI Agency questions?
No. The questions and scenarios are original. They are aligned to the current PSI broker outline and checked against primary Illinois licensing sources through August 1, 2026. They teach tested reasoning without reproducing confidential examination items.
Primary sources
- PSI Illinois Candidate Information Booklet dated June 24, 2026
- Illinois General Assembly, Real Estate License Act of 2000, including Article 15 agency relationships
- Illinois Joint Committee on Administrative Rules, current 68 Ill. Adm. Code Part 1450
- Illinois Department of Financial and Professional Regulation, Real Estate professions
- Illinois General Assembly, Illinois Human Rights Act housing provisions
The current official outline controls the tested scope. Statutes, regulations, and official agency materials control when a general study rule and a jurisdiction-specific rule differ.
Editorial status
Checked against primary sources
The Pass Illinois editorial team last checked this guide on August 1, 2026. Every practice question is an original study item, and the source links above let you verify the rules that support the lesson.