- Official section
- National VI
- Broker weight
- 13%
- Expected scored items
- About 13 of 100 national items
National Section VI study guide
Agency for the Illinois broker exam
Agency questions are people maps. Identify who represents whom, what authority was granted, which duty applies, what was disclosed, and whether the relationship has ended before judging the licensee's conduct.
What does this exam area cover?
Short answer: Know how agency and non-agency relationships begin, listing and buyer or tenant representation agreements, transaction brokers and facilitators, powers of attorney, termination, fiduciary duties, duties to customers, agency disclosure, and conflict or self-interest disclosure.
The national outline tests broad agency principles, while the state portion tests Illinois-specific duties and disclosures. Illinois generally uses designated agency unless a written agreement establishes another relationship. Do not import a relationship label from another state into an Illinois scenario.
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What is on the official outline?
- Topic
- Creating agency
- What to know
- Express agreement, implied conduct, ratification, estoppel, authority, consent, principal, agent, and third party
- Best exam move
- Find the principal's authorization and the agent's consent instead of relying on who pays.
- Topic
- Listing agreements
- What to know
- Exclusive right to sell, exclusive agency, open listing, net listing risk, term, authority, duties, compensation, and protection clauses
- Best exam move
- Ask who can earn compensation if the owner or another broker finds the buyer.
- Topic
- Buyer and tenant representation
- What to know
- Exclusive and nonexclusive agreements, property scope, term, broker duties, client duties, compensation, and termination
- Best exam move
- Read exclusivity, geographic or property scope, compensation, and expiration separately.
- Topic
- Other brokerage relationships
- What to know
- Transaction broker, facilitator, non-agent, subagent, cooperating broker, and state-specific availability
- Best exam move
- Use the relationship expressly allowed by the governing state, not a familiar label from another jurisdiction.
- Topic
- Powers of attorney and assigned authority
- What to know
- Principal, attorney-in-fact, actual authority, limited or broad scope, duration, revocation, and signature capacity
- Best exam move
- Read the granted power and confirm that the act falls within its scope.
- Topic
- Ending agency or brokerage service agreements
- What to know
- Performance, expiration, mutual agreement, revocation, renunciation, death, incapacity, destruction, breach, and operation of law
- Best exam move
- Separate termination of authority from possible liability for wrongful early termination.
- Topic
- Fiduciary duties to clients
- What to know
- Loyalty, lawful obedience, disclosure, confidentiality, accounting, reasonable care and skill, and performance of the agreement
- Best exam move
- Identify the client first, then apply the duty without hiding a fact that law requires disclosed.
- Topic
- Duties to customers and non-clients
- What to know
- Honesty, good faith, accurate information, material-fact disclosure, fair dealing, and ministerial assistance
- Best exam move
- A customer is not owed client advocacy, but is not outside the licensee's legal duties.
- Topic
- Agency and representation disclosure
- What to know
- Who is represented, who is not represented, designated agent, timing, form, acknowledgment, and changes in relationship
- Best exam move
- Disclose before the consumer could reasonably reveal confidential negotiating information and follow state timing.
- Topic
- Conflict and self-interest disclosure
- What to know
- Dual representation, licensee ownership, family or business interest, compensation, referral benefit, and informed consent
- Best exam move
- Reveal the material interest clearly and obtain any consent the law requires before acting.
Which distinctions produce the most mistakes?
- Terms
- Client vs. customer
- Difference
- A client is represented. A customer is not represented by that licensee but is still owed statutory and general duties.
- Question cue
- Advocacy and confidentiality versus honest assistance without representation.
- Terms
- Principal vs. agent
- Difference
- The principal grants authority. The agent accepts authority and acts within its scope for the principal.
- Question cue
- Who controls the objective versus who performs authorized acts.
- Terms
- Express vs. implied agency
- Difference
- Express agency arises from stated agreement. Implied agency is inferred from conduct and circumstances.
- Question cue
- Signed or spoken terms versus behavior suggesting representation.
- Terms
- Actual vs. apparent authority
- Difference
- Actual authority comes from the principal's manifestations to the agent. Apparent authority arises from the principal's manifestations that reasonably lead a third party to believe authority exists.
- Question cue
- What the principal told the agent versus what the principal caused the third party to believe.
- Terms
- Special vs. general vs. universal agent
- Difference
- A special agent handles a limited act or transaction, a general agent handles a continuing range of matters, and a universal agent receives very broad authority.
- Question cue
- One sale, ongoing property management, or sweeping authority such as a broad power of attorney.
- Terms
- Exclusive right to sell vs. exclusive agency
- Difference
- An exclusive-right listing generally earns compensation regardless of who finds the buyer. An exclusive-agency listing commonly preserves the owner's right to sell without owing that listing commission.
- Question cue
- Owner-produced buyer still triggers commission versus owner exception.
- Terms
- Open listing vs. exclusive listing
- Difference
- An open listing can involve multiple brokers, with compensation typically tied to the broker who produces the successful result. An exclusive listing grants exclusive rights defined by the agreement.
- Question cue
- Several brokers competing versus one contracted listing broker.
- Terms
- Power of attorney vs. brokerage agency
- Difference
- A power of attorney appoints an attorney-in-fact with stated legal authority. A brokerage agreement authorizes licensed brokerage services and does not automatically grant power to sign for the client.
- Question cue
- Authority to execute the principal's document versus authority to market, negotiate, or advise.
- Terms
- Revocation vs. expiration
- Difference
- Revocation is an act withdrawing authority. Expiration occurs when the stated period ends. Wrongful revocation can terminate authority yet still create contractual liability.
- Question cue
- Principal ends early versus calendar term ends.
- Terms
- Agency disclosure vs. conflict disclosure
- Difference
- Agency disclosure identifies representation. Conflict disclosure reveals an interest that could compromise independent judgment.
- Question cue
- Whom do you represent versus what personal or competing interest do you have.
How should you solve an agency question?
- List the principal or client, agent, customer, other party, and brokerage firm.
- Identify the source and scope of authority, including any written agreement or power of attorney.
- Classify the relationship using the governing state's allowed categories.
- Determine whether the person is owed client duties or customer duties.
- Name the exact duty or disclosure triggered by the facts.
- Check whether compensation, a personal interest, or competing representation creates a conflict.
- Ask whether the relationship ended and whether confidentiality or accounting duties survive.
- Choose the action that stays within authority, protects required confidences, discloses required facts, and documents consent.
- Fact pattern
- Licensee receives a seller's bottom line
- Primary question
- Is it confidential?
- Exam direction
- Do not disclose without permission unless law requires
- Fact pattern
- Buyer asks the seller's agent for a form
- Primary question
- Would help create agency?
- Exam direction
- Ministerial help alone need not create representation
- Fact pattern
- Other party pays the broker
- Primary question
- Does payment create agency?
- Exam direction
- No, find the actual relationship
- Fact pattern
- Licensee wants to buy the listing
- Primary question
- Is there self-interest?
- Exam direction
- Disclose the licensee's interest and follow consent rules
- Fact pattern
- Principal revokes before expiration
- Primary question
- Did authority and contract both end cleanly?
- Exam direction
- Authority may end while breach liability remains
- Fact pattern
- Broker receives client money
- Primary question
- Which duty applies?
- Exam direction
- Account, safeguard, document, and disburse lawfully
How do the rules work in scenarios?
Compensation does not choose the client
Scenario: A listing broker offers compensation to a buyer's broker through a lawful cooperation arrangement. The seller's side funds the payment at closing.
- Payment source is not the test for agency.
- The buyer's brokerage agreement and disclosures identify the represented party.
- The buyer's broker can remain the buyer's agent even when compensation comes from the transaction.
Answer: The compensation source alone does not turn the buyer's broker into the seller's agent.
Protecting a client's negotiating position
Scenario: A seller privately tells the listing agent that a quick move matters more than price. A buyer asks whether the seller would accept much less.
- The seller's motivation affects negotiating position.
- The information came from the client in the agency relationship.
- It is not a physical property fact that must be disclosed.
Answer: The listing agent should not reveal the seller's confidential motivation without permission.
Reading a power of attorney
Scenario: An owner gives an attorney-in-fact written authority to manage rental property but no authority to sell it. The attorney-in-fact signs a sale contract.
- A power of attorney is limited by its text.
- Management authority does not automatically include sale authority.
- The signature exceeds the stated scope.
Answer: The sale signature should not be assumed authorized merely because a power of attorney exists.
Separating authority from contract liability
Scenario: A seller revokes a listing broker's authority before the exclusive listing expires without a contract-based reason.
- A principal can generally withdraw the agent's authority.
- Ending authority prevents continued representation.
- Early withdrawal can still breach the brokerage agreement and create liability.
Answer: The agency authority can end even though the seller may still face a contract claim.
What are the common exam traps?
- Trap
- The person paying the fee is always the principal.
- Correction
- Agency follows consent and authority, not payment source alone.
- Trap
- A customer is owed no duties.
- Correction
- Customers are still owed honesty, accurate information, required material-fact disclosure, and other legal duties.
- Trap
- A special agent may sign any document for the client.
- Correction
- A special agent has limited authority and cannot exceed the granted scope.
- Trap
- All states recognize transaction brokerage in the same way.
- Correction
- Relationship categories and duties are state-specific. Illinois centers its statute on designated agency and written alternatives.
- Trap
- Confidentiality always yields to curiosity from the other party.
- Correction
- Negotiating information stays confidential unless the client permits disclosure or law requires it.
- Trap
- Calling someone a facilitator avoids all duties.
- Correction
- A label does not erase statutory duties or conduct that creates a different relationship.
- Trap
- A listing can never end before its stated date.
- Correction
- Authority can end earlier, though wrongful termination can create contract liability.
- Trap
- An agent should obey every client instruction.
- Correction
- The obedience duty covers lawful instructions within the relationship, not unlawful discrimination or deception.
- Trap
- Disclosure of agency automatically resolves every conflict.
- Correction
- Self-interest or dual representation can require separate disclosure and informed consent, and some conflicts may prohibit acting.
Can you answer these original practice questions?
These questions are original study items aligned to the published outline. They are not copied, recalled, or predicted PSI questions.
1. Which fact most directly determines whether a buyer is the broker's client?
- The seller ultimately funds compensation
- The buyer and brokerage created a representation relationship
- The buyer attended an open house
- The listing price is above market
Show answer and explanation
Answer: B
Agency depends on the relationship and authority created, not compensation source or casual contact.
2. A seller lists with several brokers and owes compensation to the broker who produces the successful buyer under the listing terms. What listing is described?
- Open listing
- Exclusive-right-to-sell listing
- Property management agreement
- Universal power of attorney
Show answer and explanation
Answer: A
An open listing permits multiple brokers and typically rewards the broker who produces the successful transaction.
3. Which duty requires an agent to safeguard and report money or property entrusted by a client?
- Accounting
- Advertising
- Revocation
- Apparent authority
Show answer and explanation
Answer: A
Accounting covers money, documents, and property handled for the principal.
4. A client orders an agent to reject buyers of a protected class. What is the correct response?
- Obey because client instructions always control
- Refuse the unlawful instruction
- Follow it if no advertisement is used
- Ask the customer to keep it confidential
Show answer and explanation
Answer: B
An agent's obedience duty is limited to lawful instructions. Fair housing law cannot be overridden by the client.
5. An owner appoints someone only to sign one specified deed on the owner's behalf. What kind of authority is most directly described?
- Limited or special authority
- Universal authority
- Authority created by compensation
- No authority under any circumstances
Show answer and explanation
Answer: A
Authority restricted to one identified act is limited or special rather than general or universal.
How should you study this area?
- Session
- 1. Relationship map
- Focus
- Principal, agent, client, customer, third party, firm, and compensation
- Proof you are ready
- Label every person and duty in a five-party scenario.
- Session
- 2. Agreements
- Focus
- Listing types, buyer and tenant representation, exclusivity, term, and compensation
- Proof you are ready
- Predict who can earn compensation from each agreement.
- Session
- 3. Authority
- Focus
- Actual, apparent, special, general, universal, power of attorney, and limits
- Proof you are ready
- Decide whether the proposed act is within scope.
- Session
- 4. Duties
- Focus
- Loyalty, obedience, disclosure, confidentiality, accounting, care, and customer duties
- Proof you are ready
- Name the exact duty from each fact pattern.
- Session
- 5. Disclosure and conflict
- Focus
- Agency notice, non-agency notice, self-interest, compensation, and competing representation
- Proof you are ready
- State what must be revealed, to whom, and before which event.
- Session
- 6. Termination
- Focus
- Performance, expiration, agreement, revocation, renunciation, death, incapacity, and surviving duties
- Proof you are ready
- Separate ended authority from remaining liability and confidentiality.
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.
Agency: Illinois Broker Exam Study Guide FAQ
How much of the Illinois broker exam is Agency?
Agency is 13% of the national broker portion, or about 13 of the 100 scored national items. It is the second-largest national area after Contracts.
What is the difference between a client and a customer?
A client is represented under an agency or brokerage relationship. A customer receives services or interacts with the licensee without being represented by that licensee. Duties to clients are broader, but customers are still owed honesty and duties imposed by law.
Who is the principal in a real estate agency relationship?
The principal is the person who authorizes an agent to act on the principal's behalf. In brokerage language, that represented person is commonly called the client.
Does the person who pays the commission determine whom the broker represents?
No. Compensation alone does not establish agency. Illinois law expressly says payment or a promise of payment is not determinative of whether an agency relationship exists.
What is an exclusive-right-to-sell listing?
It is a listing in which the broker is entitled to the agreed compensation if the property sells during the listing term, regardless of who finds the buyer, subject to the agreement's terms and applicable law.
What is the difference between express and implied agency?
Express agency is created through stated agreement, whether written or oral when legally permitted. Implied agency is inferred from conduct. Brokerage relationships should be documented as required because casual conduct can create confusion and disclosure problems.
What fiduciary duties should I know for the exam?
Know loyalty, lawful obedience, disclosure of material information, confidentiality, reasonable care and skill, and accounting for money or property. Exact statutory language and limits can vary by state.
Does confidentiality end when the agency relationship ends?
Not automatically. Confidentiality can survive termination, subject to law, the agreement, client permission, and duties to disclose material facts that cannot legally be kept confidential.
What is the difference between agency disclosure and conflict disclosure?
Agency disclosure tells the consumer whom the licensee represents or does not represent. Conflict or self-interest disclosure reveals an interest that could affect the licensee's judgment, such as ownership, related-party involvement, or competing representation.
Are these agency questions copied from the PSI exam?
No. Every practice question here is original and aligned to the published outline. It teaches the tested relationships without using confidential live questions.
Primary sources
- PSI Illinois Candidate Information Booklet dated June 24, 2026
- Illinois General Assembly, Real Estate License Act of 2000, Article 15
- Illinois Administrative Code, 68 Ill. Adm. Code Part 1450
- IDFPR Real Estate Professions
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.