National Section VI study guide
Agency for the Illinois broker exam
A seller can help pay the buyer’s broker without becoming that broker’s client. Two agents can work for the same firm without making both dual agents. Agency questions become easier when you draw the relationships before deciding which duty applies.
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The short answer
For an agency question, identify the represented client, the licensee’s role, the authority granted and the duty or disclosure triggered. The national exam uses broad agency vocabulary; Illinois brokerage relationships use the Real Estate License Act’s statutory framework. Illinois generally treats a licensee working with a consumer as the consumer’s designated agent unless the sponsoring broker and consumer have a written agreement for a different relationship. Payment alone does not determine agency, and a brokerage appointment does not automatically authorize signing for the client.
Reviewed October 26, 2026. PSI assigns 13 of the 100 scored national broker questions to the whole Agency domain, National VI. It covers relationships, listing and buyer or tenant agreements, other brokerage roles, powers of attorney, termination, duties and disclosures. This guide labels traditional national vocabulary and Illinois rules separately. Original examples and questions are not PSI items, legal advice about a live transaction or a validated readiness assessment.
Map the role, authority and duty
- Identify the governing setting. If the question says Illinois, begin with Article 15 and the applicable rules. Section 15-5 replaces the common-law brokerage agency framework within its stated scope, while section 15-15(e) preserves duties concerning negligent or fraudulent material misrepresentation. Do not treat a national fiduciary-duty mnemonic as the entire Illinois rule.
- Draw the representation map. Name the client, designated agent, sponsoring broker, customer and other represented party. Compensation source is not the test. A sponsoring broker’s separate designated agents can represent opposite parties without each becoming a dual agent merely because they share a firm. Do not assume MLS cooperation creates subagency. Section 15-55 says membership alone does not, and an offer of subagency may not be made through an MLS or similar information source.
- Check the written agreement and the actual work. Illinois requires the sponsoring broker to set out brokerage terms in writing. Section 15-50(a-5) also preserves specified consumer enforcement and court remedies when writing is absent. Missing paperwork does not automatically erase the relationship or the work performed. Nor does the current default statute retain the old ministerial-acts exception.
- Read the authority and compensation provisions separately. Marketing and negotiating authority is not automatic authority to sign a contract or deed for the owner. Listing types describe different compensation arrangements, subject to their terms and applicable law. A power of attorney has its own scope, effective period and limitations.
- Apply the correct duty to the correct person. Illinois client duties include performing the agreement, promoting the client’s best interests, following lawful directions, using reasonable skill and care, protecting confidential information and accounting for money and property. Customers still receive the statutory protections that apply to them. Client advocacy does not permit deception or withholding a physical fact that the law requires disclosed.
- Check the specific disclosure or consent. Illinois designated-agency notice is written and due no later than beginning to work as designated agent. A written non-agency notice must be timed to prevent a customer’s confidential disclosures, with preparation of an offer as the outside statutory limit. Dual agency requires informed written consent from all clients before dual action and the additional statutory confirmation.
- Separate ending authority from remaining obligations. Read performance, expiration, cancellation, compensation and any protection-period provisions. Illinois section 15-30 expressly retains accounting and confidentiality after the relationship ends, with its written-agreement qualification. Do not assume an individual agent’s death or incapacity automatically answers every firm-agreement or power-of-attorney question.
| Facts supplied | First question | Rule to remember |
|---|---|---|
| Seller funds buyer-broker compensation | Whom does each licensee represent? | Payment is not determinative of agency |
| Consumer working with an Illinois licensee | Is there a sponsor-consumer written different relationship? | Apply the current designated-agency default |
| No signed agreement found | Does that eliminate the relationship or work? | Writing is required, but absence is not an automatic defense under section 15-50(a-5) |
| Two agents in one firm | Are different agents separately designated? | Common firm membership alone does not make both dual agents |
| One licensee represents opposite parties | Is prior informed written consent complete? | Dual agency needs all clients’ consent and statutory confirmation |
| Licensee’s partly owned entity is a party | Can that licensee be the dual agent? | The ownership-party prohibition is not cured by consent |
| Unrepresented buyer may reveal a negotiating limit | Has non-agency been disclosed in time? | Prevent confidential disclosures; do not simply wait for an offer |
| Client asks for concealment of a hidden physical defect | Does a statutory disclosure duty apply? | Confidentiality does not defeat a required disclosure |
| Owner asks the broker to sign a deed | What grants signing authority? | A listing alone is not a power of attorney |
| Brokerage agreement ends | What survives? | Read the agreement and retain the statutory accounting and confidentiality duties |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Client and customer | A client is represented; a customer is not represented by that licensee. That customer status does not erase statutory honesty and disclosure protections. | Represented by whom, and for what services? |
| National fiduciary vocabulary and Illinois statutory duties | National questions can describe loyalty, lawful obedience, disclosure, confidentiality, accounting and care. Illinois Article 15 supplies the controlling brokerage framework within its scope. | Learn the labels without overriding the statute. |
| Express agreement and conduct | Express terms are stated; traditional implied-agency vocabulary concerns conduct and circumstances. Illinois also has a statutory designated-agency default and writing requirements. | An absent signature is not a universal no-duty shortcut. |
| Actual and apparent authority | In traditional vocabulary, actual authority concerns what the principal authorizes the agent to do. Apparent authority concerns the principal’s manifestations that reasonably lead a third party to believe authority exists. | The agent’s unsupported assertion is not the principal’s authorization. |
| Special and general agency | Traditional special agency concerns a limited act or transaction; general agency concerns a continuing range of authorized matters. Read the instrument rather than assuming that a job title grants every power. | Continuing management is not unlimited authority. |
| Exclusive right to sell and exclusive agency | A stated exclusive-right-to-sell agreement commonly provides compensation even for an owner-found buyer. An exclusive-agency agreement can preserve an owner-sale exception. The actual terms govern. | Who found the buyer, and what does the agreement say? |
| Open and exclusive listing | An open listing can allow several brokers to seek the result, with compensation under the agreed terms. Exclusive rights and service duties must be identified separately. | Multiple brokers do not automatically share a commission. |
| Designated and dual agency | Different designated agents can represent separate clients within one firm. A dual agent represents opposing parties in the same transaction and must satisfy the statutory safeguards. | Shared firm and shared agent are different facts. |
| Agency notice and dual consent | Agency notice identifies representation. Informed written dual consent addresses the conflict of one licensee representing opposite parties; the required confirmation is another step. | One signature is not a substitute for every required document. |
| Brokerage agreement and power of attorney | A brokerage agreement authorizes the stated brokerage services. A POA can grant an attorney-in-fact authority to take specified legal acts for the principal. | A right to compensation does not itself grant deed-signing power. |
| Termination and freedom from all obligations | A relationship can end while accounting, confidentiality or contract obligations remain. Particular documents and laws can affect the result. | Ended authority does not automatically mean no remaining claim or duty. |
| Notice, prior consent and confirmation | They answer different questions: whom the licensee represents, whether all clients informedly permit dual representation, and whether prior consent is confirmed as required. | Identify which document and which event the question actually supplies. |
Work through the facts
The seller helps fund the buyer’s broker
The buyer has a valid representation arrangement with a buyer’s designated agent. The seller’s side funds agreed compensation under a permitted arrangement; all applicable payment disclosures and approvals are assumed satisfied.
- Section 15-40 makes compensation source nondeterminative.
- Identify the buyer’s representation relationship rather than reassigning it from the payment.
Answer: The payment does not by itself make the buyer’s agent the seller’s agent.
“No form, no client” is the wrong shortcut
An Illinois licensee is working with a consumer in brokerage services. There is no sponsoring-broker/consumer written agreement for a different relationship. The licensee says no duties exist because the required brokerage paperwork is unfinished.
- Apply the section 15-10 default rather than inventing a missing-form exemption.
- Section 15-50 requires writing and preserves specified consumer remedies despite its absence.
Answer: The licensee cannot safely treat missing paperwork as proof that no representation or licensed activity occurred. Compliance with writing and disclosure requirements still needs attention.
A negotiating reason is not a physical defect
A represented seller privately gives the designated agent a confidential relocation deadline and minimum acceptable price. No law or client permission requires or allows disclosure in this scenario. A buyer asks for both.
- The information concerns the client’s negotiating position.
- The duty to protect confidential information is not overridden by another party’s curiosity.
Answer: Do not disclose the confidential deadline or minimum price on these facts. Required physical-condition disclosure is a separate question.
A client cannot demand concealment
A seller’s designated agent actually knows a latent material adverse foundation condition. The facts stipulate that a reasonably diligent prospective-buyer customer could not discover it by inspection. The seller demands silence.
- The stated facts satisfy the section 15-25 seller-client/prospective-buyer-customer disclosure rule.
- A client instruction cannot override applicable law.
Answer: The licensee must timely disclose the required condition. Do not turn confidentiality into permission to conceal it.
An owner-found buyer under two different agreements
For this teaching comparison, Agreement One expressly requires the stated commission for a sale during its term even if the owner finds the buyer. Agreement Two expressly preserves a no-listing-commission exception when the owner independently procures the buyer. Assume the agreements otherwise qualify, no other fee trigger applies and the facts meet each stated clause.
- Agreement One describes the usual exclusive-right-to-sell compensation feature.
- Agreement Two describes the owner-sale exception commonly associated with exclusive agency.
Answer: Apply the actual compensation clause. Neither label alone grants the broker power to sign the owner’s deed.
A management-only POA
A valid, effective property POA expressly authorizes specified management acts and excludes sale or conveyance. No separate sale authority or other validating circumstance is supplied. The attorney-in-fact proposes signing a sale contract.
- Read the express scope rather than inferring sale authority from the POA’s title.
- Being an attorney-in-fact does not mean the person is an attorney at law or has unlimited powers.
Answer: Do not assume the proposed sale signature is authorized. The stated instrument excludes it.
Separate agents in the same office
A sponsoring broker properly designates Agent One for the seller and Agent Two for the buyer. Neither represents the opposite party; the stated arrangements satisfy the applicable requirements. Agent Two asks Agent One for the seller’s confidential bottom line.
- Separate designation is not automatically individual dual agency.
- Shared office membership does not remove the need to protect each client’s confidential information.
Answer: Agent One should not share the seller’s confidential bottom line merely because Agent Two works in the same firm.
Permission obtained after dual action
A licensee begins representing both seller and buyer in the same transaction before obtaining the buyer’s required informed written dual consent. The seller had already consented.
- All clients must give the required informed written consent before dual action.
- One client’s consent does not stand in for the other’s.
Answer: The licensee should not have begun dual representation on those facts. A later signature does not establish that the earlier action met the prior-consent requirement.
An ownership interest is not cured by a dual consent
A licensee owns a small interest in an entity that is the buyer in the transaction. The licensee wants to be the dual agent for that buyer and the seller, with both signing consent.
- Section 15-45(g) bars dual agency when the licensee or the licensee’s ownership entity is a party.
- The prohibition is not a more-than-1% referral-disclosure test.
Answer: The licensee cannot use consent to cure the stated ownership-party dual-agency prohibition. Other disclosure and representation requirements still matter.
An early ending does not answer the compensation question
A client communicates an early withdrawal of ordinary brokerage authority. The question asks whether that alone proves no compensation, accounting or confidentiality obligation can remain. No particular cancellation remedy is stipulated.
- Authority and contractual payment obligations are separate issues.
- Illinois section 15-30 expressly addresses surviving accounting and confidentiality.
Answer: Do not conclude that ending the relationship erases every obligation. Read the governing agreement and law without inventing an automatic cancellation penalty or full commission.
Two buyer clients seek the same property
An Illinois licensee is preparing contemporaneous offers for two buyer clients on the same property. One client asks to be referred to another designated agent.
- Section 15-15(b) addresses this situation rather than treating all same-side competing clients as automatic opposite-side dual agency.
- Provide the required written disclosure to all affected clients and make the requested referral.
- Continue protecting each client’s confidential information.
Answer: Disclose as required and refer the requesting client to another designated agent. The statute does not let the licensee hide the competition or insist the client stay.
A signed offer can still need brokerage assistance
An exclusive brokerage agreement includes the required minimum services. The purchase agreement is signed, but an inspection contingency is still pending; it has not been satisfied or waived.
- Section 15-75’s offer-related assistance endpoint includes both signing and satisfaction or waiver of all contingencies.
- The pending contingency prevents a signing-only shortcut.
Answer: Signing alone does not end the stated minimum assistance. The example does not promise that the property, financing or inspection will be approved.
Mistakes to avoid
- Letting the payer choose the client. Payment alone is not determinative of agency under Illinois law.
- Treating an unsigned agreement as proof of no client. Writing requirements and the statutory default must be considered together with section 15-50(a-5).
- Using the old ministerial-acts exception. It is absent from the current section 15-10 default. A casual greeting also does not settle every relationship question.
- Importing another state’s transaction-broker label. Use the governing state’s law and the actual written relationship.
- Assuming all members of a firm represent every client. Identify the designated agents and protect client information.
- Confusing loyalty with unlawful obedience. Client directions do not override applicable law, including fair-housing requirements.
- Calling every unpleasant fact a required disclosure. Apply the precise statutory duty, client/customer roles and known-fact conditions.
- Treating dual consent as unlimited permission. Consent does not erase statutory restrictions or prohibited negotiation advice.
- Letting a listing stand in for a POA. Identify the actual authority for the proposed signature.
- Assuming all POAs end on incapacity. Illinois duration and instrument terms matter; do not use a blanket incapacity rule.
- Ending all duties when the listing expires. Statutory accounting and confidentiality are retained; read applicable agreement terms.
- Giving every early cancellation the same fee result. A specific contract and governing law determine any remaining claim.
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 buyer’s validly appointed agent receives permitted compensation funded from the seller’s side. What does that payment alone establish?
- That both parties automatically consented to dual agency
- Nothing determinative about agency
- That the agent represents the seller
- That the buyer is unrepresented
Show answer and explanation
Answer: B. Nothing determinative about agency
Section 15-40 states that payment or a promise of compensation is not determinative of whether an agency relationship exists. Identify the actual representation arrangement.
2. An Illinois licensee is working with a consumer. There is no sponsoring-broker/consumer written agreement for a different relationship. What is the section 15-10 default?
- The licensee is automatically a transaction broker
- The licensee represents whichever party pays
- The consumer is always a customer until closing
- The licensee is the consumer’s designated agent
Show answer and explanation
Answer: D. The licensee is the consumer’s designated agent
The current statute supplies a designated-agency default for the consumer the licensee is working with, subject to its written-different-relationship qualification. It does not retain the former ministerial-acts exception.
3. Required brokerage paperwork is missing. Which statement best reflects current section 15-50(a-5)?
- All oral statements automatically authorize every signature
- Writing is required, but its absence does not automatically defeat specified consumer enforcement or establish that no licensed work occurred
- The client must forfeit every remedy
- The licensee has no duties under any law
Show answer and explanation
Answer: B. Writing is required, but its absence does not automatically defeat specified consumer enforcement or establish that no licensed work occurred
The statute requires written terms and separately preserves specified consumer enforcement and court remedies. Missing writing is not a universal no-agreement or no-activity defense.
4. An Illinois agent represents a client. Which instruction must the agent refuse?
- Reject applicants because of a legally protected class
- Keep my protected negotiating limit confidential
- Present my stated price terms
- Account for the money received
Show answer and explanation
Answer: A. Reject applicants because of a legally protected class
Section 15-15 limits obedience to lawful directions and requires compliance with applicable law, including fair-housing and civil-rights requirements.
5. A seller’s confidential minimum price is not required to be disclosed by law, and the seller has not authorized disclosure. A buyer asks for it. What should the seller’s designated agent do?
- Disclose because any buyer question overrides confidentiality
- Disclose to all agents in the firm automatically
- Protect the confidential negotiating information
- Publish it when the listing expires
Show answer and explanation
Answer: C. Protect the confidential negotiating information
Illinois client confidentiality protects the stated negotiating information. This does not excuse withholding a separate fact that law requires disclosed.
6. A seller’s licensee actually knows a latent material adverse physical condition that a reasonably diligent prospective-buyer customer cannot discover by inspection. What does section 15-25 require?
- Timely disclose the required condition
- Disclose only if the buyer pays the licensee
- Conceal it if the seller asks
- Disclose only after the buyer closes
Show answer and explanation
Answer: A. Timely disclose the required condition
The question supplies the seller-client, prospective-buyer-customer, actual-knowledge, latent, material, adverse and physical-condition elements. Client instructions do not override this duty.
7. An exclusive brokerage agreement includes the required minimum services. A purchase agreement is signed, but inspection contingencies remain unsatisfied and unwaived. Can the broker treat signing alone as the end of all minimum offer-related assistance?
- Yes, signature alone ends the obligation
- Yes, every contingent contract is complete
- Only if the customer pays compensation
- No, section 15-75 includes assistance until signing and satisfaction or waiver of all contingencies
Show answer and explanation
Answer: D. No, section 15-75 includes assistance until signing and satisfaction or waiver of all contingencies
The statutory endpoint joins signing with all contingencies being satisfied or waived. Other continuing duties can also apply; this is not a promise of loan or inspection approval.
8. A prospective buyer is correctly identified as the seller agent’s customer rather than client. Which conclusion follows?
- No disclosure can ever be required to a customer
- The customer receives the seller client’s confidential bottom line automatically
- The agent may knowingly give false facts
- The customer still receives applicable honesty and statutory protections
Show answer and explanation
Answer: D. The customer still receives applicable honesty and statutory protections
Customer status does not erase section 15-25 honesty and applicable disclosure duties. It also does not give the customer the seller client’s advocacy or protected information.
9. When must the Illinois designated-agent relationship and agent names be disclosed in writing under section 15-35(a)?
- Only at the first commission payment
- Only after an offer is accepted
- Only if the consumer asks
- No later than beginning work as the consumer’s designated agent
Show answer and explanation
Answer: D. No later than beginning work as the consumer’s designated agent
The statute sets a written notice requirement no later than beginning to work as designated agent. The disclosure can be part of the agreement or a separate document meeting the statutory requirements.
10. A customer is about to reveal a confidential negotiating limit to a licensee who does not represent that customer. Is “we can always wait until offer preparation” a correct non-agency-notice rule?
- Yes, timing never depends on confidential information
- Yes, if the seller prefers it
- No written notice is ever needed
- No, notice must be timed to prevent confidential disclosures, with the statutory outside limit
Show answer and explanation
Answer: D. No, notice must be timed to prevent confidential disclosures, with the statutory outside limit
Section 15-35(c) requires notice timed to prevent confidential disclosures and in no event later than preparation of an offer to purchase or lease. The outside limit is not permission to ignore the earlier protection.
11. Properly appointed Agent One represents the seller and Agent Two represents the buyer in the same Illinois firm. Neither represents the opposite party. Are both automatically individual dual agents solely because of the common firm?
- No
- Only when the office has one entrance
- Yes, if the seller funds compensation
- Yes, every firm client is every agent’s client
Show answer and explanation
Answer: A. No
Section 15-50 recognizes separate designated agents and the stated limit on representing more than one party. Confidentiality safeguards remain important.
12. One licensee plans to represent the seller and buyer in the same transaction. Whose informed written dual-agency consent is required before acting in that role?
- Only the person paying more
- All clients involved
- Only the seller
- Only the sponsoring broker
Show answer and explanation
Answer: B. All clients involved
Section 15-45 requires informed written consent from all clients. Additional confirmation and the rule’s substantive limits also apply.
13. A licensee’s partly owned entity is the buyer. Can the licensee act as dual agent for it and the seller merely because both clients sign consent?
- Yes, whenever the seller pays the fee
- No, the ownership-party prohibition applies
- Yes, after disclosing only orally
- Yes, for any ownership below 1%
Show answer and explanation
Answer: B. No, the ownership-party prohibition applies
Section 15-45(g) bars that licensee from dual agency when the licensee or an ownership entity is a party. Consent does not cure it, and the rule is not the separate more-than-1% referral test.
14. Which is the usual compensation feature of an exclusive-right-to-sell listing, subject to its actual terms and law?
- Only the owner can earn the broker’s fee
- The agreed fee can be owed for a sale during the term even when the owner finds the buyer
- The listing grants automatic power to sign the owner’s deed
- All brokers split the fee equally
Show answer and explanation
Answer: B. The agreed fee can be owed for a sale during the term even when the owner finds the buyer
The label commonly concerns compensation regardless of who procures the buyer, subject to contract terms. It does not itself grant deed-signing authority.
15. A stipulated exclusive-agency listing expressly preserves an owner-sale exception. The owner independently procures the buyer, the exception’s conditions are met, and no other fee trigger applies. What follows under that clause?
- The listing commission is automatically doubled
- The listing commission is not owed under the stated owner-sale exception
- All other brokers are paid
- The broker can sign for the owner
Show answer and explanation
Answer: B. The listing commission is not owed under the stated owner-sale exception
Apply the supplied clause and conditions. This is not a conclusion that every agreement with an exclusive-agency label has identical compensation terms.
16. A stipulated open listing permits several brokers to seek the buyer, with compensation under its stated successful-procurement terms. Which label fits?
- Property-management appointment only
- Universal POA
- Exclusive-right-to-sell listing in every case
- Open listing
Show answer and explanation
Answer: D. Open listing
Open listing is the traditional label for the stated multiple-broker arrangement. Illinois writing and other applicable requirements still must be met; do not import California oral-listing rules.
17. A valid, effective POA expressly permits management and excludes sale. No separate sale authority or other validating fact exists. Does its title alone authorize the attorney-in-fact to sign a sale contract?
- No
- Yes, because management always includes conveyance
- Yes, every POA is universal
- Only if a commission will be paid
Show answer and explanation
Answer: A. No
The stated instrument limits the authority and expressly excludes sale. A title or brokerage appointment is not a substitute for the necessary power.
18. In traditional national vocabulary, authority for one defined transaction rather than continuing management is usually described as what?
- Special agency
- Automatic dual agency
- Universal agency
- Agency created by payment
Show answer and explanation
Answer: A. Special agency
Special agency is limited to the specified transaction or acts. The label does not expand the actual authority, and Illinois brokerage duties still follow its statutory framework.
19. A brokerage agreement has ended. What does Illinois section 15-30 expressly retain, with its written-agreement qualification?
- An unlimited duty to negotiate forever
- No duty of any kind
- Accounting for transaction money/property and confidentiality
- An automatic right to every later commission
Show answer and explanation
Answer: C. Accounting for transaction money/property and confidentiality
The statute expressly retains accounting and confidentiality after termination, expiration or performance, with its opening written-agreement qualification. Do not assume the exception permits unlawful concealment.
20. A client withdraws brokerage authority early. Which conclusion is safest from that fact alone?
- The broker may keep representing the client forever
- All confidential information becomes public
- The client automatically owes a full commission in every case
- Read the agreement and law for any remaining payment or other obligations
Show answer and explanation
Answer: D. Read the agreement and law for any remaining payment or other obligations
Authority, termination rights, compensation and surviving duties are separate issues. The fact alone does not establish a particular cancellation penalty or eliminate every obligation.
21. An Illinois licensee prepares contemporaneous offers for two buyer clients on the same property. One requests another designated agent. What does section 15-15(b) require?
- Treating both buyers automatically as the seller’s clients
- A full commission refund in every case
- Required written disclosure to all affected clients and referral of the requesting client
- Automatic concealment of the other client
Show answer and explanation
Answer: C. Required written disclosure to all affected clients and referral of the requesting client
The statute specifically requires written disclosure to the clients for whom the licensee prepares or makes contemporaneous offers or contracts on the same property and referral when a client requests it. Protect each client’s confidential information; this is not automatically opposite-side dual agency.
22. Prior informed written dual consent was properly obtained. The required confirmation provision is now embedded in a signed contract, but the clients have not initialed that provision. Which point matters under section 15-45(c)?
- Embedded confirmation must meet both the signature and provision-initial requirements
- No confirmation is required once an offer exists
- Prior consent eliminates the confirmation requirement
- Only the broker’s initials matter
Show answer and explanation
Answer: A. Embedded confirmation must meet both the signature and provision-initial requirements
Written confirmation of prior dual consent is required. Where included in another document, the statute requires the prescribed signature and initials, not just an unnoticed clause in a generally signed contract. The statute’s wording that confirmation should be obtained at offer or contract execution does not make confirmation optional.
23. What does current Illinois section 10-25 require for a written brokerage agreement longer than one year?
- Definite automatic expiration and an annual client termination right on no more than 30 days’ prior written notice
- At least 60 days’ annual cancellation notice in every case
- Only an annual cancellation right, with no definite expiration
- Only a definite expiration, with no annual client right
Show answer and explanation
Answer: A. Definite automatic expiration and an annual client termination right on no more than 30 days’ prior written notice
Read the current statutory requirements together: definite automatic expiration, plus the additional annual right for a term longer than one year. The notice ceiling is no more than 30 days, not a mandatory minimum of 30. This does not decide an individual cancellation claim.
24. In a traditional national-vocabulary question about apparent authority, which fact is most relevant?
- An agent’s private unsupported claim of unlimited power
- The number of properties in the MLS
- The size of a commission alone
- The principal’s words or conduct reasonably creating an appearance of authority to a third party
Show answer and explanation
Answer: D. The principal’s words or conduct reasonably creating an appearance of authority to a third party
Apparent authority concerns the appearance the principal creates for a third party, with the applicable reliance requirements. It is not established solely by the agent’s unsupported claim. This vocabulary example does not displace Illinois Article 15 or decide a private signature or liability dispute.
Common questions
How much Agency is on the Illinois broker exam?
PSI’s National VI Agency domain has 13 of the 100 scored national broker questions. Its categories include agency relationships, listing types, buyer or tenant agreements, other brokerage relationships, powers of attorney, termination, duties and disclosures. That allocation is for the whole national domain, not 13 questions on every topic on this page.
How should I distinguish national agency concepts from Illinois rules?
Learn the national vocabulary for principals, agents, authority and duties. Then identify whether the question supplies a state-specific rule. Illinois Article 15 establishes its brokerage framework within section 15-5’s scope rather than simply adopting every common-law fiduciary rule. Section 15-15(e) preserves duties concerning negligent or fraudulent material misrepresentation; the statute does not erase every other law or contract.
Who is the client if someone else pays the broker?
Payment or a promise of payment is not determinative of agency under section 15-40. Find whom the licensee represents under the actual relationship, designated-agent provisions and required agreements or disclosures. Payment arrangements can require their own disclosures without changing the represented party automatically.
Can the missing written agreement mean the consumer has no agent?
Do not assume that. Illinois section 15-10 supplies the designated-agency default for the consumer a licensee is working with, unless the sponsoring broker and consumer have a written agreement for a different relationship. Section 15-50 requires writing and preserves specified consumer enforcement and remedies despite its absence. This is not permission to omit the paperwork, nor a rule that every casual greeting creates a complete brokerage contract.
Can I rely on the old ministerial-acts exception?
The current section 15-10 does not contain that former exception. A licensee properly representing a seller can work with an unrepresented buyer under the applicable non-agency disclosure rules, including section 1450.770(i)(1). Identify the actual role and work instead of treating a ministerial label as a universal exemption.
What duties does an Illinois licensee owe a client?
Section 15-15 requires performance of the agreement, promotion of the client’s best interests, specified material-fact disclosure, lawful obedience, timely accounting, reasonable skill and care, confidentiality and compliance with applicable law. Its provisions and other minimum-service rules have qualifications. For example, a client instruction cannot authorize unlawful discrimination, and a simple offer-presentation waiver does not turn an exclusive agreement’s required services into optional work.
What duties are owed to customers?
Illinois licensees must treat customers honestly and must not negligently or knowingly give false information. Section 15-25 also imposes the specified seller-licensee disclosure of actually known latent material adverse physical facts to prospective-buyer customers when those facts cannot be discovered by their reasonably diligent inspection. Do not turn that precise rule into a universal warranty about every property fact or every relationship.
When is the Illinois agency or non-agency notice due?
Under section 15-35(a), designated-agent status and names are disclosed in writing no later than beginning work as designated agent. Under subsection (c), a non-agency notice to a customer is timed to prevent confidential disclosures and is due no later than offer preparation. Agreement timing is a separate question: the current rule requires a seller/owner agreement before marketing or listing, and a buyer/tenant agreement before licensed assistance or as soon as reasonably practical afterward, subject to stricter applicable dual-agency requirements.
Are designated agency and dual agency the same?
No. Different designated agents can represent opposite parties within the same sponsoring brokerage. If an individual licensee represents opposite parties in the same transaction, the dual-agency safeguards apply. An office affiliation alone does not determine the individual role, and shared firm membership does not make protected client information freely shareable.
Is one signed dual-agency consent enough for everything?
No. All clients must give the required informed written consent before dual representation. Section 15-45 also requires written confirmation of prior consent and limits the advice a dual agent can give, including specified negotiation recommendations. A licensee cannot use consent to avoid the ownership-party prohibition or another applicable duty.
What must I remember about the dual-agency confirmation?
Prior informed written consent and confirmation are separate requirements. Section 15-45(c) requires written confirmation and says it should be obtained when an offer or contract is executed. If the confirmation is included within another document, the relevant signing and initials requirements still apply. Do not turn should about timing into optional confirmation, or treat a general document signature as the same thing as initialing the embedded provision.
What is the difference between exclusive right to sell, exclusive agency and open listing?
An exclusive-right-to-sell agreement commonly provides the agreed compensation even if the owner procures the buyer. Exclusive agency can preserve an owner-sale exception. An open listing can allow multiple brokers to seek the result under its compensation terms. Read the actual agreement and applicable law, including Illinois writing, duration and service requirements; these national labels do not guarantee an identical commission outcome.
Can a brokerage agreement let the agent sign for the client?
Do not assume it does. Marketing and negotiating services differ from signing a sale contract or deed in the principal’s place. A valid effective POA or other sufficient authority must cover the actual act. An attorney-in-fact is not necessarily a lawyer. Management-only authority does not become sale authority merely because it is in a document called a power of attorney.
Does incapacity or death always terminate every agency arrangement?
The relevant person, agreement, legal entity and governing law matter. An Illinois property POA can continue through incapacity under the statute and its terms; death has different consequences. A firm’s brokerage agreement is not automatically the same thing as an individual agent’s appointment. Identify the controlling facts and any actual-knowledge or reliance qualifications rather than applying one blanket slogan.
Do exclusivity, minimum services and expiration mean the same thing?
No. Illinois section 15-75 specifies minimum services for exclusive agreements. Under rule 1450.770(b)(2), omitting or waiving the required minimum-service language makes the agreement nonexclusive under the stated definition; it does not make every other duty disappear. Separately, section 10-25 requires definite automatic expiration and, for terms longer than one year, an annual client termination right on no more than 30 days’ prior written notice. Read these requirements together rather than treating the rule’s older duration wording as a substitute for the statute.
What duties survive termination?
Illinois section 15-30 expressly retains accounting for transaction money and property and confidentiality after termination, expiration or completed performance, with its written-agreement qualification. Compensation, protection clauses and other obligations need their own agreement and legal analysis. Expiration does not itself authorize disclosure of a former client’s protected negotiating information.
Does disclosure solve every conflict or self-interest problem?
No. Representation notice, compensation disclosure, licensee-status disclosure and informed dual consent address different matters. Illinois section 10-27 requires written licensee-status disclosure to all parties when a licensee sells, leases or purchases a direct or indirect interest in the subject property. Section 15-45(g) separately prohibits dual agency when that licensee or an ownership entity is a party. Disclosure does not convert a prohibition into permission.
How can I check an agency answer without memorizing every story?
Name the client, customer, designated agent, sponsoring broker and proposed act. State the source and limit of authority, then identify the exact duty, notice or consent. Check whether confidential information, a competing client or personal ownership changes the answer. A practice score is useful feedback, but it does not independently certify legal competence or exam readiness.
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Put agency into practice
Identify who represents whom, then choose the duty owed in that situation.
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Official sources and scope
Reviewed October 26, 2026. The identified current Illinois statutes and the rule effective July 13, 2026 support the Illinois distinctions. The DRE chapter and identified NAR definitions provide traditional vocabulary, with their California-law and publication limits retained. The review record identifies the exact new readings and prior actual readings reused. No private agreement, representation arrangement, signature, commission claim or legal remedy is approved.
- PSI Illinois Candidate Information Booklet: National VI Agency
- 225 ILCS 454/15-5: Illinois statutory brokerage framework
- 225 ILCS 454/15-10: designated-agency default
- 225 ILCS 454/15-15: client duties and competing clients
- 225 ILCS 454/15-25: customer honesty and known latent defects
- 225 ILCS 454/15-35: agency and non-agency notice
- 225 ILCS 454/15-50: written terms, designation and consumer remedies
- 225 ILCS 454/15-40: compensation does not determine agency
- 225 ILCS 454/15-45: prior dual consent, confirmation and limits
- 68 Ill. Adm. Code 1450.800: confidentiality safeguards
- 68 Ill. Adm. Code 1450.770: agreements and assistance timing
- 225 ILCS 454/15-75: exclusive minimum services
- 225 ILCS 454/10-25: expiration and the annual termination right
- 225 ILCS 454/15-30: duties after termination
- 225 ILCS 454/10-27: written licensee-status disclosure
- 225 ILCS 454/15-55: MLS membership and subagency
- California DRE chapter 10: traditional agency and listing vocabulary
- NAR handbook: traditional listing-type definitions
- 755 ILCS 45/2-3 and 2-4: POA roles and instrument scope
- 755 ILCS 45/2-5: POA duration and incapacity
- 755 ILCS 45/3-4: retained property powers and limits
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.