Practice of Real Estate questions and answers

A commission floor is still price fixing

Three competing brokerage owners agree over lunch that none will accept a residential listing below a shared minimum commission percentage.

1. The firms compete for the same brokerage business.
2. A commission percentage is a price term.
3. Their agreement replaces independent pricing with coordinated pricing.

Answer: The shared minimum is horizontal price fixing under the standard antitrust analysis.

A direct stop request controls

Assume the proposed call is a covered live sales call and no new permission or different applicable exception is supplied. A homeowner asked this brokerage for a market report six weeks ago, then yesterday directly told this brokerage never to make another sales call.

1. The prior inquiry might otherwise support a limited exception for certain calls.
2. The homeowner later made an entity-specific do-not-call request.
3. That direct request overrides the brokerage's reliance on the relationship exception.
4. This is the seller-specific stop in the stated sales-call context, not a ruling that every informational message or every different calling law has identical conditions.

Answer: The brokerage should not place the proposed sales call.

Audience settings are part of a housing ad

For covered nonexempt rental housing, a licensee intentionally configures an advertisement to withhold it from families with children because of familial status. No housing-for-older-persons or other applicable exemption is supplied.

1. The campaign promotes housing availability.
2. Familial status is protected by the federal Fair Housing Act.
3. The selected delivery audience affects access to the housing message just as the words and images do.
4. The stipulated protected-class exclusion is different from treating any unexplained difference in algorithmic outcomes as a proven violation.

Answer: The exclusion creates a fair housing advertising and housing-access problem.

Temporary mixing remains commingling

A broker receives earnest money after the bank's trust-account cutoff and deposits it in the operating account overnight, intending to move it the next morning.

1. The deposit belongs to others and must be handled under the governing escrow rules.
2. The operating account contains brokerage business funds.
3. A short period of improper mixing does not become acceptable because the broker plans to correct it.
4. This example concerns entrusted earnest money improperly put into an operating account. It does not prohibit the separate rule's narrow documented bank-minimum provision or invent a universal deposit deadline.

Answer: The overnight operating-account deposit is commingling, and the funds should follow the required trust process.

Worker labels do not answer every law

A sponsored licensee has an agreement calling the licensee an independent contractor for federal tax purposes. The licensee argues that the sponsoring broker therefore has no licensing-law supervision duties.

1. Federal tax classification uses a specific statutory test.
2. Real estate licensing and sponsorship rules serve a different legal purpose.
3. A tax label does not erase duties imposed on the sponsoring brokerage by license law.
4. The label alone also does not prove the tax classification: licensing, substantially output-based payments and the required written federal-tax contract all matter.

Answer: Apply the federal tax and licensing-law tests separately rather than treating one contract label as universal.

Due diligence means verification, not guessing

A supposed trustee signs a listing, but the vesting deed names a trust and the person provides no trust certificate or other evidence of authority.

1. The record and the proposed signer's claim do not yet connect.
2. A signature from an unauthorized person can undermine the transaction.
3. The correct response is to obtain appropriate title and authority evidence through qualified channels.
4. A certification can be relevant under the Trust Code; do not demand the entire trust instrument for every purpose or infer authority merely from the word trustee. No private document is being approved here.

Answer: Pause the unsupported assumption and verify the signer's authority through the relevant trust and title documentation.

A fresh Registry file is not the entire process

A covered seller obtains a new National Registry file this morning but ignores its internal do-not-call requests and has no implemented procedures, training or monitoring. It claims the fresh file establishes the whole FTC safe harbor.

1. The Registry-age condition is one part of the process.
2. Section 310.4(b)(3) includes written procedures, training, internal records, the prevention process and documentation, monitoring and the stated error condition.
3. A new download does not cure an ignored seller-specific stop or prove the remaining conditions.

Answer: The fresh-file fact alone does not establish that safe harbor or approve the calls.

Verify a change through a separately known contact

A familiar-looking closing email supplies new wire instructions and a new verification phone number. No independent confirmation has occurred.

1. FBI guidance describes spoofed or compromised messages and real-estate payment-instruction fraud.
2. Use a previously established, independently known contact route to verify the change rather than relying only on the new number.
3. This is a practical fraud safeguard, not a guarantee that funds are recoverable or a direction to make a payment.

Answer: Pause reliance on the new instructions until the actual authority is independently verified; no call or transfer is performed in this example.

An older office still needs the right access analysis

Assume a covered public-facing office in an existing older building. Its operator says no ADA analysis is needed because the building predates the Act. No finding about actual feasibility, resources or a later alteration is supplied.

1. Age alone is not a blanket exemption for a public accommodation.
2. Existing architectural barriers use the applicable readily achievable standard, including difficulty, expense and resources; new construction and alterations have different standards.
3. Policy and communication duties can also matter. The example identifies the required analysis without certifying a design or ordering every physical change regardless of its standard.

Answer: Assess the actual applicable access duties; do not accept the age-only exemption or assume every requested alteration is automatically mandatory.

Treble the stipulated damages, not the criminal fine

For a calculation only, assume a private claim satisfies the applicable Section 15(a) requirements and $10,000 of qualifying actual damages is established. Find the treble-damages amount before separate costs or attorney fees.

1. The hypothetical supplies the required legal entitlement and qualifying actual damages; the arithmetic does not establish those facts in a real case.
2. Treble means three times: $10,000 x 3 = $30,000.
3. This is a civil damages calculation, not the corporate criminal fine, an award for every allegation or a prediction of an actual court result.

Answer: The stipulated treble-damages amount is $30,000 before the separately treated costs or attorney fees.

1. Two competing brokerages agree that one will serve the northern half of a county and the other will serve the southern half. What is most directly described?

1. Market allocation
2. Independent geographic specialisation without an agreement not to compete
3. Independent fee decisions by firms serving the same county
4. A referral arrangement with no restriction on competition

2. Which statement about real estate commissions is most accurate?

1. Competing firms may agree on a local minimum
2. Every listing broker must match the largest firm
3. Each brokerage must determine its pricing independently
4. Federal law sets a standard percentage

3. A homeowner directly tells a brokerage never to call again. What effect does that request have on the brokerage's established-business-relationship exception?

1. It overrides the exception for future sales calls by that brokerage
2. The earlier inquiry automatically overrides the later stop
3. It matters only if the number is also on the National Registry
4. It has no effect unless the consumer signs a separate letter

4. Which conduct is conversion rather than only commingling?

1. Reconciling the account to bank records
2. Recording a receipt in the trust ledger
3. Using entrusted money to pay the broker's personal credit-card bill
4. Placing earnest money in an operating account

5. Which condition is part of the federal tax test for a licensed real estate agent to qualify as a statutory nonemployee?

1. The same contract label controls every employment and licensing law
2. Substantially all compensation is tied to sales or output rather than hours
3. Holding a license alone establishes every condition
4. The written service contract need not address federal tax treatment

6. Two competing firms independently adopt the same fee without an agreement or coordination. Does the matching number alone prove price fixing?

1. No, because a proven price agreement is always lawful
2. Yes, every identical fee is unlawful
3. No; similar independent prices alone do not prove an agreement
4. Yes, unless a trade association approved it

7. Does a package of two services alone establish an unlawful antitrust tie?

1. Yes, even if the services are optional
2. No, because tying can never violate antitrust law
3. No; forced purchase, distinct products, market power and the actual competitive analysis matter
4. Yes, every package is prohibited

8. A covered seller downloads a current Registry file but ignores internal stop requests. What is accurate?

1. No other compliance condition matters
2. The fresh file alone does not establish the full safe harbor or permission to call
3. The file guarantees full compliance
4. The latest download overrides every internal request

9. Under the current FTC relationship definition cited here, which pair uses the stated time units?

1. 540 calendar months and 90 years
2. Exactly 18 and 3 calendar months under every calling law
3. 18 days and 3 days
4. 540 days for a qualifying transaction and 90 days for an inquiry or application

10. Does a valid federal tax statutory-nonemployee classification itself remove Illinois sponsoring-broker supervision duties?

1. No, because a licensed agent can never qualify for that tax status
2. No; licensing supervision and federal tax treatment have different governing tests
3. Yes, taxes control every licensing duty
4. Yes, if the agreement uses the word independent

11. Is an old public-facing office automatically exempt from every ADA access obligation?

1. Yes, a no-pets sign supplies the exemption
2. No; identify the actual existing-barrier, policy, communication and alteration requirements
3. Yes, construction before the ADA removes every duty
4. No, because every physical change is required regardless of the applicable standard

12. A covered nonexempt housing provider intentionally excludes families with children from an ad audience because of familial status. What is accurate?

1. A platform setting can never concern fair housing
2. The stipulated protected-class exclusion raises the housing-advertising and access issue
3. Neutral wording cures the audience exclusion
4. Every unequal algorithmic outcome automatically proves this same intent

13. Does a client's request alone put known material physical property information within the Illinois agency definition of confidential information?

1. Yes, any requested secrecy overrides all law
2. Yes, only written requests can ever make information confidential
3. No, because no client information can be confidential
4. No; material physical information is excluded from that definition, and actual disclosure duties have their own conditions

14. A familiar email changes wire instructions and supplies a new verification number. Which is the better safeguard?

1. Verify through an independently established known contact route
2. Treat the email signature as conclusive proof
3. Use only the new number in that message
4. Forward unneeded identity and bank data to more recipients

15. Does the word trustee beside a signature alone prove the person's power to bind the trust in this transaction?

1. No; obtain appropriate authority evidence through qualified channels
2. Yes, the label always proves all powers
3. Yes, a title conflict cannot matter
4. No, because the entire trust instrument is universally required for every purpose

16. Does a claimed small-property federal housing exemption automatically allow any discriminatory housing ad?

1. Yes, only the owner's preference matters
2. No; the specified federal transaction exemptions retain advertising limits, and other law can apply
3. Yes, all advertising rules disappear
4. Yes, if the ad is a temporary story

17. A cited FCC final rule was published October 26, 2026 and expressly takes effect November 25, 2026. Does publication alone make that future change operative on October 28?

1. No, because a published final rule can never take effect
2. Yes, publication always overrides an express future date
3. Yes, if an older summary mentions it
4. No; keep the express future effective date separate from current requirements

18. Which statement correctly distinguishes the stated Sherman Act Section 1 maxima from other possible consequences?

1. There can never be a fine above a dollar figure printed in Section 1
2. Every violation automatically produces exactly a $100 million fine
3. Every private plaintiff automatically receives the corporate fine
4. Section 1 states up to 10 years and ordinary fines up to $1 million for a person other than a corporation or $100 million for a corporation; the alternative fine statute and civil claims require separate analysis

19. Under the identified ADA overview, is a covered business required to make a policy change that would fundamentally alter the nature of its goods or services?

1. Yes, the age of the building alone decides every policy request
2. No, because public accommodations have no policy duties
3. No; the reasonable-policy-modification requirement has that stated limit
4. Yes, every requested change is mandatory regardless of the applicable limit

20. Is every piece of sensitive personal information automatically the same category as Illinois agency confidential information?

1. Yes, the categories always cover identical information
2. Yes, and every brokerage is automatically covered by every financial-sector privacy rule
3. No; the agency definition, applicable personal-data duties and practical safeguards have distinct scopes
4. No, so bank and identity data may always be shared publicly