- Official section
- Illinois II.D: Brokerage Agreements
- Broker weight
- Part of the 40% Illinois Real Estate License Act area
- Expected scored items
- The current PSI broker outline includes brokerage agreements within the 16-question License Act allocation
Illinois practice guide
Read the agreement in layers, not as a title
An agreement can call itself exclusive and still fail the exclusive test. It can name a buyer and omit compensation timing. It can last two years and omit the annual exit right. It can be signed after the broker already marketed the home. Ignore the label until you have checked parties, timing, type, required terms, services, change, and termination.
Last updated: August 1, 2026
What skill does this practice set measure?
Short answer: All Illinois brokerage agreements are written agreements between the sponsoring broker and consumer. A seller or owner agreement is due before marketing or listing the real estate. A buyer or tenant agreement is due before licensed activities intended to assist with a purchase or lease, or as soon as reasonably practical after those activities are performed. Name the sponsoring broker, consumer, designated agents, compensation, payment time, duties, duration, signatures, and agreement-specific terms. Listing agreements add property identification, list price, and cooperating-broker compensation terms. An exclusive agreement must include the three statutory minimum-service categories. Compensation changes require a signed written amendment to the brokerage agreement and cannot be slipped into a purchase contract. Terms, annual termination rights, fair housing language, protection periods, surviving duties, and five-year records require separate review.
Rule 1450.770 was amended effective July 13, 2026, so older forms and course summaries may conflict with the current writing, timing, compensation, fair housing, duration, and residential protection-period rules. The current statutory definition requires all brokerage agreements to be written. This page teaches exam application, not contract drafting. Actual parties should use current sponsoring-broker forms and legal review where appropriate. 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. What is the current outside deadline for an Illinois seller or owner brokerage agreement?
- Before marketing or listing the property
- Within three days after the first advertisement
- Only before accepting an offer
- At closing
Show answer and explanation
Answer: Before marketing or listing the property
Rule 1450.770 requires the written seller or owner agreement before marketing or listing the real estate for sale or lease.
2. A form is labeled exclusive but waives the broker's duty to assist with counteroffers. How is it treated under the current rule?
- As nonexclusive because a minimum service was waived
- As exclusive because the heading controls
- As a purchase contract
- As an appraisal engagement
Show answer and explanation
Answer: As nonexclusive because a minimum service was waived
An exclusive agreement must contain the statutory minimum services. Their omission or waiver defeats exclusive treatment.
3. Which term is distinctive to an Illinois listing agreement compared with the rule's general buyer-agreement list?
- List price and property identification
- Duration
- Sponsoring-broker name
- Required signatures
Show answer and explanation
Answer: List price and property identification
A listing agreement identifies the listed property and list price. Both agreement types also address parties, signatures, duties, compensation, and duration.
4. How may an agreed Illinois buyer-broker compensation amount be changed?
- By a written amendment signed by the brokerage-agreement parties
- By an oral instruction at closing
- Only through the purchase contract
- By changing the office copy without notice
Show answer and explanation
Answer: By a written amendment signed by the brokerage-agreement parties
The amount or payment time requires a compliant signed written amendment, and a purchase contract cannot replace it.
5. Which duty ordinarily continues after an Illinois brokerage agreement terminates?
- Keeping the client's confidential information confidential
- Marketing the property indefinitely
- Accepting every future offer
- Automatic renewal of representation
Show answer and explanation
Answer: Keeping the client's confidential information confidential
Illinois preserves confidentiality and accounting for related money and property after termination, subject to the agreement and law.
Which answer habits should you watch for?
- Trap
- Only exclusive Illinois brokerage agreements must be written.
- Correction
- Current Illinois law requires all brokerage agreements to be in writing.
- Trap
- The individual agent, not the sponsoring broker, is the only agreement party.
- Correction
- The sponsoring broker contracts with the consumer, while designated affiliated licensees are named as agents.
- Trap
- A seller may sign after the property is placed on the market.
- Correction
- The current rule requires the written agreement before marketing or listing the property.
- Trap
- The buyer agreement is always due before any licensed assistance begins.
- Correction
- The current rule allows the writing as soon as reasonably practical after licensed assistance is performed, although signing before that activity also complies.
- Trap
- The exclusive heading controls even if minimum services are waived.
- Correction
- Omitting or waiving Section 15-75 services causes nonexclusive treatment.
- Trap
- Every agreement may renew forever without a consumer exit.
- Correction
- Duration must satisfy current expiration and annual termination requirements.
- Trap
- The purchase contract may quietly change the broker fee.
- Correction
- Compensation amount or timing changes require a signed written brokerage-agreement amendment.
- Trap
- Who pays automatically determines whom the broker represents.
- Correction
- Compensation source and agency relationship are separate under Illinois law.
- Trap
- A protection period always produces a tail fee.
- Correction
- The current four-unit residential rule defeats the first fee when a valid new sponsor agreement is entered during the period.
- Trap
- All duties end the moment the agreement expires.
- Correction
- Accounting and confidentiality ordinarily survive, along with any other written or legal obligations.
- Trap
- A transaction agreement can omit Illinois fair housing language.
- Correction
- The current rule requires the specified antidiscrimination statement in brokerage agreements.
- Trap
- The agreement may be discarded after closing.
- Correction
- It is a transaction record that must be maintained for five years under Rule 1450.755.
How should you reason through a difficult item?
Coming soon is still marketing
Scenario: A seller verbally approves a fee. Before signatures, the broker posts a coming-soon video, sends the property to a private listing network, and orders a yard sign.
- Current Illinois law requires the brokerage agreement to be written.
- The actions market or list the owner's property rather than merely present services.
- Rule 1450.770 requires the seller or owner agreement before that activity begins.
Answer: The broker acted too early because verbal approval did not authorize the marketing.
An exclusive label cannot waive minimum services
Scenario: A form calls itself exclusive but says the firm will not assist with counteroffers, notices, contingency questions, or negotiation after an offer arrives.
- Section 15-75 identifies required service categories for exclusive brokerage agreements.
- The form attempts to waive communication, negotiation, notice, and question-answering duties.
- Rule 1450.770 treats an agreement that omits or waives those services as nonexclusive.
Answer: The agreement is treated as nonexclusive despite its heading.
A purchase addendum cannot rewrite the buyer fee
Scenario: A buyer and sponsoring broker signed a buyer agreement with a flat fee. The licensee later inserts a higher percentage fee into the purchase contract and asks only the seller to sign.
- The buyer and sponsoring broker are the brokerage-agreement parties.
- Changing amount or payment time requires their signed written amendment.
- The purchase contract cannot be used to alter the previously agreed commission terms.
Answer: The buyer and sponsoring broker need a compliant signed brokerage-agreement amendment; the purchase term does not replace it.
A long term needs the annual exit
Scenario: A buyer agreement has a two-year term and says the buyer can never terminate before the final date, even with written notice.
- The term exceeds one year.
- The current rule preserves the consumer's annual right to terminate on 30 days' prior written notice.
- A clause eliminating that right conflicts with the governing requirement.
Answer: The agreement must provide the required annual 30-day written termination right.
The current residential tail exception matters
Scenario: A two-flat listing expires with a protection period. The owner signs a valid exclusive listing with another sponsoring broker during that period and then sells to a prior prospect.
- The property is residential with four units or fewer.
- The owner entered a valid written agreement with another sponsoring broker during the tail.
- The current rule requires the first protection clause to say no first-agreement commission or fee is due in that situation.
Answer: The first brokerage cannot collect the protection-period fee under the stated current rule.
Expiration preserves confidentiality and accounting
Scenario: A buyer agreement expires while the sponsoring broker still holds a client document, transaction money, and confidential financial information.
- Expiration ends ordinary active representation authority.
- Illinois preserves accounting for transaction money and property after termination.
- Qualifying confidential information also remains protected unless the written agreement or law provides otherwise.
Answer: The broker must complete the accounting and continue protecting the confidential information despite expiration.
How should you answer an Illinois brokerage-agreement question?
- Identify the sponsoring broker, consumer, owner or buyer, tenant or landlord, and each designated agent.
- Place the event before seller marketing or listing, before or just after buyer-side licensed assistance, during negotiation, at amendment, at expiration, or within a protection period.
- Classify listing, buyer, tenant, property-management, exclusive, nonexclusive, bilateral, or unilateral agreement.
- Check names, signatures, property and price where applicable, compensation, cooperating-broker amount, duties, duration, expiration, and fair housing statement.
- For exclusive status, prove all three Section 15-75 minimum-service categories and reject any waiver.
- For compensation changes, require a separate signed written amendment by agreement parties and reject a purchase-contract substitution.
- For long terms and protection periods, apply the annual exit and four-unit residential new-agreement rules exactly.
- After termination, preserve accounting, property, confidentiality, any valid limited tail analysis, and the five-year transaction record.
- Agreement or event
- Seller or landlord relationship
- Timing or purpose
- Before marketing or listing
- Distinctive exam check
- Property, list price, owner, cooperating-broker compensation
- Agreement or event
- Buyer or tenant relationship
- Timing or purpose
- Before licensed assistance or as soon as practical after
- Distinctive exam check
- Buyer or tenant, compensation, duties, scope, duration
- Agreement or event
- Exclusive agreement
- Timing or purpose
- Sole representation right
- Distinctive exam check
- All three minimum-service categories
- Agreement or event
- Nonexclusive agreement
- Timing or purpose
- Representation is not sole
- Distinctive exam check
- Still written under current law
- Agreement or event
- Property management
- Timing or purpose
- Licensed management services
- Distinctive exam check
- Property plus manager and owner duties
- Agreement or event
- Term longer than one year
- Timing or purpose
- Extended consumer relationship
- Distinctive exam check
- Annual termination on 30 days' written notice
- Agreement or event
- Residential protection period
- Timing or purpose
- Four units or fewer after termination
- Distinctive exam check
- No first-agreement tail fee after valid new sponsor agreement
- Agreement or event
- Compensation amendment
- Timing or purpose
- Amount or payment time changes
- Distinctive exam check
- Written and signed by agreement parties, not purchase contract
- Agreement or event
- Agreement termination
- Timing or purpose
- Active representation ends
- Distinctive exam check
- Accounting and confidentiality survive
- Agreement or event
- Transaction record
- Timing or purpose
- Regulatory retention
- Distinctive exam check
- Maintain written agreement for five years
Which outline areas does this set sample?
- Topic
- Agreement foundation
- What to know
- Sponsoring broker, consumer, licensed activity, future licensed activity, compensation, right to compensation from another source, written agreement, physical writing, electronic writing, bilateral, unilateral, exclusive, nonexclusive, client, designated agent, and no oral shortcut
- Best exam move
- Identify the sponsoring broker and consumer as the agreement parties before focusing on the individual agent.
- Topic
- Seller and owner timing
- What to know
- Seller, landlord, owner, written agreement, before marketing, before listing, sale, lease, MLS entry, private network, sign, coming soon, advertisement, social post, price, and authority
- Best exam move
- Require the seller or owner agreement before marketing or listing, even when the owner verbally approves the fee.
- Topic
- Buyer and tenant timing
- What to know
- Buyer, tenant, purchase, lease, before engaging in licensed activity, as soon as reasonably practical after licensed activity, intended assistance, property search, advice, showing, offer preparation, negotiation, and electronic signature
- Best exam move
- Use the current licensed-assistance trigger rather than the superseded initiating-the-purchase wording.
- Topic
- Buyer or tenant required terms
- What to know
- Compensation basis, compensation amount, payment time, sponsoring broker, designated agent, buyer, tenant, authorized signatory, signatures, duties, property scope, geographic scope, duration, automatic expiration, term longer than one year, annual termination, 30 days, and written notice
- Best exam move
- Use the people, pay, duties, scope, and duration checklist to find the missing term.
- Topic
- Listing required terms
- What to know
- List price, property address, legal description, owner, sponsoring broker, designated agent, commission basis, commission amount, payment time, cooperating-broker amount, representative of another party, signatures, duties, marketing authorization, duration, expiration, and annual termination
- Best exam move
- Look for property and list-price terms that do not belong in the same way on a general buyer agreement.
- Topic
- Exclusive minimum services
- What to know
- Accept delivery, present offers, present counteroffers, develop, communicate, negotiate, notices, signed agreement, contingency, satisfied, waived, client questions, exclusive right, waiver, omission, nonexclusive treatment, and sponsored licensee performance
- Best exam move
- If the client supposedly waives any minimum-service category, treat the agreement as nonexclusive under the current rule.
- Topic
- Property-management agreements
- What to know
- Licensed management activity, owner, property, address, legal description, sponsoring broker, designated agents, signatures, manager duties, owner duties, compensation, marketing or leasing price, cooperating broker, timing, duration, expiration, and annual termination right
- Best exam move
- Require the written management agreement when the manager will perform licensed brokerage services.
- Topic
- Compensation and amendments
- What to know
- Negotiable compensation, source, basis, amount, percentage, flat fee, payment time, cooperating broker, written amendment, required signatures, purchase contract, lease form, default, earnest money, full commission, conspicuous clause, inducement, and no unilateral office change
- Best exam move
- Keep representation compensation in the brokerage agreement and a compliant signed amendment, not a transaction-contract shortcut.
- Topic
- Designated agency and compensation policy
- What to know
- Sponsoring broker as contract party, designated licensee as legal agent, exclusion of other affiliated licensees, agency disclosure, no-agency customer, dual consent, company compensation policy, cooperating-broker offers, other-party payment, negotiation, and client informed choice
- Best exam move
- Separate who contracts, who is designated, who pays, and whom the licensee represents.
- Topic
- Duration and annual termination
- What to know
- Definite duration, automatic expiration date, term longer than one year, annual right to terminate, 30 days prior written notice, renewal, extension, no perpetual lock-in, client calendar, and agreement-specific deadline
- Best exam move
- Check both the stated end and the consumer's current annual exit right for a longer-than-one-year term.
- Topic
- Protection periods
- What to know
- Post-termination tail, identified prospect, later sale or lease, earned commission, notice, duration, residential property, four units or fewer, valid written agreement with another sponsoring broker, no fee under first agreement, and current Illinois exception
- Best exam move
- For residential property of four units or fewer, test whether a valid new agreement with another sponsor defeats the first agreement's tail fee.
- Topic
- Fair housing statement
- What to know
- Required agreement statement, refusal to show, display, lease, sell, owner, licensee, Illinois Human Rights Act, protected class, source of income, immigration status, arrest record, military status, sexual orientation, gender identity, and no unlawful client instruction
- Best exam move
- Expect the current Illinois antidiscrimination statement in the brokerage agreement, not only in public advertising.
- Topic
- Termination and records
- What to know
- Expiration, completed performance, mutual termination, revocation, breach, sponsor suspension, sponsor revocation, automatic agreement expiration, active duties, accounting, client money, property, confidentiality, protection period, transaction file, physical record, electronic record, five years, and Division inspection
- Best exam move
- End active representation, preserve surviving duties and any valid tail analysis, and retain the agreement in the transaction record for five years.
What should you sort out before you begin?
- Terms
- Brokerage agreement vs. purchase contract
- Difference
- The brokerage agreement hires and governs the sponsoring broker. The purchase contract binds buyer and seller to the property's transaction terms.
- Question cue
- Representation services and compensation versus the bargain to transfer real estate.
- Terms
- Sponsoring broker vs. designated agent
- Difference
- The sponsoring broker enters the agreement with the consumer. The named affiliated licensee acts as the client's designated legal agent.
- Question cue
- Contracting brokerage versus assigned individual representative.
- Terms
- Exclusive vs. nonexclusive agreement
- Difference
- An exclusive agreement gives the sponsoring broker the sole representation right and includes statutory minimum services. A nonexclusive agreement preserves shared representation opportunity as written.
- Question cue
- Sole representation plus services versus no exclusive right.
- Terms
- Listing presentation vs. listing agreement
- Difference
- A presentation solicits the business. The written listing agreement forms the representation relationship and authorizes the stated marketing.
- Question cue
- Proposal discussion versus signed operating contract.
- Terms
- Buyer timing vs. seller timing
- Difference
- A seller or owner agreement is due before marketing or listing. A buyer or tenant agreement is due before licensed assistance begins or as soon as reasonably practical after that assistance is performed.
- Question cue
- Marketing or listing versus licensed activity intended to assist.
- Terms
- Required agreement terms vs. exclusive minimum services
- Difference
- Required terms identify people, compensation, duties, property or scope, signatures, and duration for the agreement type. Minimum services are the additional statutory service categories necessary for exclusive status.
- Question cue
- Complete written agreement versus agreement that also qualifies as exclusive.
- Terms
- Duration vs. protection period
- Difference
- Duration is the active service term. A protection period is a limited post-termination compensation provision tied to later events and current restrictions.
- Question cue
- Representation window versus possible tail fee after the relationship ends.
- Terms
- Automatic expiration vs. annual termination right
- Difference
- A normal agreement states an automatic expiration date. A term longer than one year must preserve the current annual right to terminate on 30 days' prior written notice.
- Question cue
- Fixed end date versus recurring consumer exit from a long term.
- Terms
- Compensation disclosure vs. amendment
- Difference
- Disclosure explains compensation sources or policies. An amendment changes the agreed amount or payment time and must be written and signed by agreement parties.
- Question cue
- Information about pay versus contractual change to pay.
- Terms
- Termination vs. surviving duties
- Difference
- Most active representation duties end with the agreement. Accounting for related money and property and preserving confidential information continue as Illinois provides.
- Question cue
- Authority ends but entrusted property and secrets remain protected.
How should you review your results?
- Session
- 1. Identify people and timing
- Focus
- Sponsoring broker, consumer, designated agent, seller, landlord, buyer, tenant, writing, presentation, marketing, and assisted activity
- Proof you are ready
- Resolve fifteen who-signs and when-to-write scenarios without looking at forms.
- Session
- 2. Compare agreement types
- Focus
- Listing, buyer, tenant, property management, exclusive, nonexclusive, bilateral, unilateral, property, price, duties, compensation, and duration
- Proof you are ready
- Rebuild the comparison table and identify a missing term in ten defective agreements.
- Session
- 3. Memorize minimum services
- Focus
- Accept and present, develop and communicate, negotiate and present, notices, signed agreement, contingencies, and client questions
- Proof you are ready
- Explain why ten waiver clauses cause nonexclusive treatment.
- Session
- 4. Audit pay and duration
- Focus
- Basis, amount, time, cooperating broker, written amendment, purchase-contract prohibition, expiration, one-year term, annual right, and 30-day notice
- Proof you are ready
- Correct ten compensation or duration defects in one sentence each.
- Session
- 5. Handle special clauses and ending
- Focus
- Protection period, residential four-unit rule, fair housing statement, termination, accounting, confidentiality, record retention, and five years
- Proof you are ready
- State the current tail exception and every surviving duty without notes.
- Session
- 6. Finish with mixed agreement practice
- Focus
- People, timing, type, required terms, exclusivity, compensation change, long term, protection, termination, and record
- Proof you are ready
- Score at least 90% on two fresh Illinois brokerage-agreement sets.
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 Illinois Brokerage Agreements Practice Questions: 2026
What is an Illinois brokerage agreement?
It is a written agreement between a sponsoring broker and a consumer for licensed activities or future licensed activities in return for compensation or the right to compensation from another source. The agreement may be bilateral or unilateral and exclusive or nonexclusive according to its terms.
Must every Illinois brokerage agreement be written?
Yes. The current statutory definition requires all brokerage agreements to be in writing. Do not rely on older summaries that treated only exclusive agreements as written. Rule 1450.770 recognizes physical or electronic writing for exclusive agreements.
When must an Illinois seller sign a brokerage agreement?
The current rule requires a written brokerage agreement with a seller or owner before marketing or listing the real estate for sale or lease. Advertising, an MLS entry, a sign, a private-network listing, or other marketing cannot begin first.
When must an Illinois buyer sign a brokerage agreement?
The current rule requires a written brokerage agreement with a buyer or tenant before the licensee engages in licensed activities intended to assist with the purchase or lease, or as soon as reasonably practical after the licensee performs those activities. Do not carry the superseded initiating-the-purchase wording into an August 2026 question.
What terms belong in a buyer or tenant agreement?
The agreement states the compensation basis or amount and payment time; names the sponsoring broker, designated agents, and buyers or tenants; includes required signatures; states licensee duties; and gives the duration and expiration or the required annual termination right for a term longer than one year.
What additional terms belong in a listing agreement?
A listing agreement identifies the property and list price, compensation basis or amount and timing, amounts offered to cooperating brokers representing other parties, sponsoring broker, designated agents, owners, required signatures, duties, duration, and expiration provisions.
What minimum services come with an exclusive agreement?
The sponsoring broker must accept and present offers and counteroffers; assist with developing, communicating, negotiating, and presenting offers, counteroffers, and related notices until agreement and contingency resolution; and answer client questions about those matters. Waiving a minimum service causes the agreement to be treated as nonexclusive under the current rule.
Can a purchase contract change the brokerage commission?
No. A change to the agreed commission amount or payment time must be in a written amendment signed by the brokerage-agreement parties. Rule 1450.770 prohibits using a real estate contract form to change previously agreed commission-payment terms.
What duties survive agreement termination?
Unless the written agreement provides additional duties, the sponsoring broker and affiliated licensees continue to account for transaction money and property and preserve confidential information received during the relationship. A protection period may also affect compensation, subject to the current residential rule.
Are these official PSI brokerage-agreement questions?
No. They are original scenarios aligned to the public Illinois outline and primary law. They are not copied or recalled live exam items. The sources were checked through August 1, 2026, including Rule 1450.770 as amended effective July 13, 2026.
Primary sources
- PSI Illinois Candidate Information Booklet dated June 24, 2026
- 225 ILCS 454/1-10, brokerage-agreement definition
- 225 ILCS 454/15-15, duties to clients
- 225 ILCS 454/15-30, duties after termination
- 225 ILCS 454/15-75, minimum services
- Illinois General Assembly, Real Estate License Act, Article 15
- 68 Ill. Adm. Code 1450.770, brokerage agreements
- 68 Ill. Adm. Code 1450.755, transaction records
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.