- Official section
- Illinois II.D: Brokerage Agreements
- Broker weight
- Part of 40% of the Illinois state portion
- Expected scored items
- The current PSI broker outline assigns 16 of 40 state items to this area
Illinois License Act topic guide
Illinois brokerage agreements
A brokerage agreement is the operating contract between the sponsoring broker and the consumer. For the exam, read it in layers: who the parties are, when writing is required, what terms belong in that agreement, what exclusivity adds, and what duties remain after it ends.
Last updated: August 1, 2026
What does current Illinois authority require?
Short answer: All Illinois brokerage agreements must be written and may be exclusive or non-exclusive. The agreement is between the sponsoring broker and consumer, names the designated agents, states duties, compensation, duration, and other terms required for its type, and contains the required signatures. Seller or owner agreements come before marketing or listing. Buyer or tenant agreements come before assisted licensed activity or as soon as reasonably practical after it. Exclusive agreements also promise the three minimum-service categories in Section 15-75.
The Illinois outline effective June 24, 2026 tests brokerage agreements within the Real Estate License Act area. This guide applies the Act and Rule 1450.770 as of August 1, 2026. That rule was amended effective July 13, 2026, so the timing, compensation, fair-housing clause, and residential protection-period coverage here may differ from older courses or forms.
Where is this tested on the Illinois outline?
- Topic
- Agreement foundation
- What to know
- Sponsoring broker, consumer, licensed activity, future service, compensation, right to compensation from another, client, bilateral, unilateral, written, physical writing, electronic writing, exclusive, and non-exclusive
- Best exam move
- Identify the sponsoring broker and consumer as the agreement parties before focusing on the individual designated agent.
- Topic
- Seller and owner timing
- What to know
- Seller, landlord, owner, listing presentation, marketing, listing, sale, lease, advertising, MLS entry, sign, public promotion, written agreement, and pre-agreement discussion
- Best exam move
- Require the written brokerage agreement before the licensee markets or lists the owner's property.
- Topic
- Buyer and tenant timing
- What to know
- Buyer, tenant, purchase, lease, licensed activity, intended assistance, search, showing, advice, offer preparation, negotiation, before activity, as soon as reasonably practical, and written agreement
- Best exam move
- Reject a continuing oral buyer relationship; choose the prompt written agreement at the rule's stated time.
- Topic
- Buyer or tenant required terms
- What to know
- Compensation basis, compensation amount, time of payment, sponsoring broker, designated agents, buyer, tenant, authorized signatory, signatures, broker duties, leasing-agent duties, duration, automatic expiration, annual termination, 30 days, and written notice
- Best exam move
- Use the party, pay, duty, and duration checklist when one required term is missing.
- Topic
- Listing required terms
- What to know
- List price, commission basis, commission amount, time of payment, cooperating broker amount, other-party representative, sponsoring broker, designated agent, owner, address, legal description, signatures, duties, duration, expiration, and annual termination
- Best exam move
- Look for property identification and list price in the listing agreement, not in a generic buyer-agreement checklist.
- Topic
- Exclusive minimum services
- What to know
- Accept delivery, present offer, present counteroffer, buy, sell, lease, develop, communicate, negotiate, notice, signed agreement, contingency, satisfied, waived, client question, omission, waiver, and non-exclusive result
- Best exam move
- If an alleged exclusive agreement omits or waives Section 15-75 minimum services, classify it as non-exclusive.
- Topic
- Property management agreement
- What to know
- Licensed management activity, owner, property, address, legal description, sponsoring broker, designated agents, signatures, manager duties, owner duties, list price, compensation, cooperating broker, timing, duration, expiration, and annual termination right
- Best exam move
- Require the written property-management agreement when the manager will perform licensed brokerage activity.
- Topic
- Compensation terms and amendments
- What to know
- Negotiable compensation, basis, amount, time of payment, cooperating broker, written amendment, signatures, purchase contract, lease form, default, earnest money, full commission, conspicuous larger letters, and inducement
- Best exam move
- Keep brokerage compensation in the brokerage agreement and its signed written amendments, not a sales-contract shortcut.
- Topic
- Designated agency and disclosure
- What to know
- Sponsoring broker, named designated agent, legal agent, exclusion of other affiliated licensees, disclosure, no agency, unrepresented consumer, dual agency, informed written consent, company compensation policy, and cooperating broker
- Best exam move
- Separate the sponsoring broker as contract party from the sponsored licensee specifically designated as the client's legal agent.
- Topic
- Duration and protection period
- What to know
- Automatic expiration date, term longer than one year, annual right, 30 days prior written notice, termination, extension, protection period, residential property, four units or less, new valid written agreement, another sponsoring broker, commission, and fee
- Best exam move
- For residential property of four units or fewer, apply the current new-agreement exception to a post-termination protection clause.
- Topic
- Fair housing clause
- 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, gender identity, and other state protection
- Best exam move
- Expect the Illinois anti-discrimination statement in each brokerage agreement, not only in advertising material.
- Topic
- Termination and records
- What to know
- Expiration, termination, completed performance, accounting, client money, property, confidentiality, sponsor suspension, sponsor revocation, automatic agreement expiration, transaction file, exclusive agreement, non-exclusive agreement, electronic record, five years, and Division inspection
- Best exam move
- End ordinary representation duties, preserve the two statutory survivor duties, and retain the transaction agreement for five years.
The AGREED method for Illinois brokerage agreements
- Ask who the parties are. Find the sponsoring broker, consumer, owners or buyers, and each designated agent.
- Get the timing right. Seller or owner agreements precede marketing; buyer or tenant agreements precede assisted licensed work or follow as soon as reasonably practical.
- Read the agreement type. Classify listing, buyer, tenant, property management, exclusive, or non-exclusive before applying its elements.
- Examine required terms. Check identity, signatures, property when applicable, price, compensation, duties, duration, expiration, and fair-housing language.
- Evaluate exclusivity. Confirm the three minimum-service categories and reject any waiver that defeats exclusive status.
- Deal with change or termination. Require signed written compensation changes, apply protection-period rules, preserve accounting and confidentiality, and retain the record for five years.
- Agreement
- Seller or landlord listing
- When or why required
- Before marketing or listing
- Distinctive exam terms
- List price, property, owner, cooperating-broker pay
- Agreement
- Buyer or tenant
- When or why required
- Before assisted licensed activity or as soon as practical
- Distinctive exam terms
- Buyer or tenant identity, pay, duties, duration
- Agreement
- Exclusive agreement
- When or why required
- When sponsor receives sole right to represent
- Distinctive exam terms
- Three minimum-service categories
- Agreement
- Non-exclusive agreement
- When or why required
- When representation is not sole
- Distinctive exam terms
- Still written; no exclusive status
- Agreement
- Property management
- When or why required
- When management duties include licensed activity
- Distinctive exam terms
- Property, manager and owner duties, compensation
- Agreement
- Term longer than one year
- When or why required
- Consumer relationship extends beyond one year
- Distinctive exam terms
- Annual termination right with 30 days' written notice
- Agreement
- Residential protection period
- When or why required
- Four units or fewer after termination
- Distinctive exam terms
- No tail fee if valid new agreement with another sponsor
- Agreement
- Compensation amendment
- When or why required
- Amount or payment time changes
- Distinctive exam terms
- Separate written, signed change; not purchase contract
Which Illinois distinctions matter most?
- Terms
- Brokerage agreement vs. purchase contract
- Difference
- The brokerage agreement hires and governs the sponsoring broker. The purchase contract binds buyer and seller to transaction terms for the property.
- Question cue
- Representation services versus transfer bargain.
- Terms
- Sponsoring broker vs. designated agent
- Difference
- The sponsoring broker enters the consumer agreement. The named sponsored licensee acts as that client's designated legal agent to the exclusion of other firm licensees.
- Question cue
- Contracting brokerage versus assigned individual agent.
- Terms
- Exclusive vs. non-exclusive agreement
- Difference
- An exclusive agreement gives the sponsoring broker the sole right to represent the client and must include Section 15-75 minimum services. A non-exclusive agreement does not give that sole right.
- Question cue
- Sole representation plus minimum services versus shared opportunity.
- Terms
- Listing presentation vs. listing agreement
- Difference
- A listing presentation is an effort to secure the work. The written listing agreement forms the brokerage relationship and authorizes the stated marketing and representation.
- Question cue
- Solicitation discussion versus executed service contract.
- Terms
- Agreement duration vs. protection period
- Difference
- Duration is the active representation term. A protection period is a limited post-termination compensation clause tied to later events and subject to current residential restrictions.
- Question cue
- Active service window versus potential tail compensation.
- Terms
- Automatic expiration vs. annual termination right
- Difference
- The agreement ordinarily states an automatic expiration date. If its term exceeds one year, it must instead or also preserve the consumer's annual right to terminate on 30 days' prior written notice under the current rule.
- Question cue
- Fixed ending versus recurring consumer exit right.
- Terms
- Compensation disclosure vs. compensation amendment
- Difference
- Disclosure explains compensation policy and amounts. An amendment changes the agreed amount or payment time and must be written and signed by the agreement parties.
- Question cue
- Information about pay versus contractual change to pay.
- Terms
- Agreement termination vs. surviving duties
- Difference
- Most representation duties end when the agreement ends, but accounting for money and property and preserving confidentiality continue unless the written agreement adds other obligations.
- Question cue
- End of active agency versus continuing protective duties.
How does the Illinois rule apply?
Marketing starts before the seller signs
Scenario: A seller verbally accepts a broker's proposed fee. The broker posts a coming-soon video and enters the home in a private listing network, planning to obtain signatures the next morning.
- All brokerage agreements are written under the current definition.
- Rule 1450.770 requires the seller or owner agreement before marketing or listing the property.
Answer: The broker acted too early. Verbal fee approval and an unfinished form do not authorize the marketing activity.
An exclusive agreement waives negotiation help
Scenario: A low-fee listing form calls itself exclusive but says the seller alone must communicate, negotiate, and present every counteroffer and that the firm will not answer questions about contingencies.
- An exclusive agreement must specify the Section 15-75 minimum services.
- The form attempts to waive core negotiation and question-answering services.
Answer: Under the current rule, the agreement is considered non-exclusive rather than a valid exclusive brokerage agreement.
Commission changes inside the purchase contract
Scenario: A buyer and sponsoring broker signed a buyer agreement calling for a stated fee. When an offer is prepared, the licensee inserts a different fee in an addendum to the buyer's purchase contract and asks only the seller to sign.
- Changing the amount or payment time requires a written amendment signed by the brokerage-agreement parties.
- A real estate contract form cannot be used to alter previously agreed commission-payment terms.
Answer: The purchase addendum does not validly amend the buyer brokerage agreement. The broker and buyer need a compliant signed written amendment.
A four-unit home's protection period
Scenario: A listing for a two-flat expires with a 60-day protection clause. During that period, the owner signs a valid written exclusive listing with another sponsoring broker and sells to a prospect from the first listing.
- The property is residential and has four units or fewer.
- The current rule requires the protection clause to say no commission or fee is due under the first agreement when the owner enters a valid written agreement with another sponsoring broker during the protection period.
Answer: The first brokerage cannot collect under that protection clause in the stated situation. This is a current Illinois-specific rule.
Where do candidates misread the Illinois rule?
- Trap
- Only exclusive brokerage agreements must be written.
- Correction
- Current Illinois law requires all brokerage agreements to be written, whether exclusive or non-exclusive.
- Trap
- The individual sponsored licensee is the only party on the consumer agreement.
- Correction
- The sponsoring broker enters the agreement with the consumer, and the designated licensees are named as legal agents.
- Trap
- A seller may sign after the property has been marketed for a day.
- Correction
- The written seller or owner agreement must exist before marketing or listing begins.
- Trap
- A buyer agreement can remain oral until an offer is written.
- Correction
- The current rule requires writing before assisted licensed activity or as soon as reasonably practical after it, not an indefinite oral arrangement.
- Trap
- A client may waive every service and keep an exclusive agreement.
- Correction
- Omitting or waiving the Section 15-75 minimum services causes the agreement to be treated as non-exclusive.
- Trap
- Every agreement may renew forever without an exit right.
- Correction
- Duration must include an automatic expiration date or, for a term longer than one year, the annual 30-day written termination right required by the rule.
- Trap
- The purchase contract may quietly change the brokerage fee.
- Correction
- Commission amount or timing changes require a written amendment signed by the brokerage-agreement parties.
- Trap
- A protection clause always earns a fee after expiration.
- Correction
- For residential property of four units or fewer, the current rule bars the tail fee when a valid written agreement with another sponsoring broker is entered during the protection period.
- Trap
- All duties disappear when representation ends.
- Correction
- Accounting for related money and property and protecting confidential information survive termination.
- Trap
- The agreement can be discarded after closing.
- Correction
- Written brokerage agreements are transaction records and must be maintained for five years under Rule 1450.755.
Can you apply the rule to a fresh scenario?
These questions are original study items aligned to the published outline. They are not copied, recalled, or predicted PSI questions.
1. When must an Illinois licensee have a written agreement with a seller before offering the property for sale?
- Before marketing or listing the property
- Within three days after the first advertisement
- Only before the first offer is accepted
- At closing
Show answer and explanation
Answer: A
Rule 1450.770 requires the written seller or owner brokerage agreement before marketing or listing the real estate for sale or lease.
2. A form is labeled an exclusive listing but waives the broker's duty to assist with negotiating counteroffers. How is it treated under the current Illinois rule?
- As exclusive because the title controls
- As non-exclusive because a minimum service was waived
- As a purchase contract
- As an appraisal engagement
Show answer and explanation
Answer: B
An exclusive agreement must include the minimum services in Section 15-75. Omission or waiver defeats exclusive status under Rule 1450.770.
3. Which item is specifically required in an Illinois listing agreement but not in the rule's buyer-agreement list?
- Duration
- Sponsoring-broker name
- List price and property identification
- Signatures
Show answer and explanation
Answer: C
A listing agreement identifies the offered property and its list price. Both agreement types also address the parties, signatures, duties, compensation, and duration.
4. How may an agreed buyer-broker compensation amount be changed under Rule 1450.770?
- Through an oral instruction at closing
- By inserting a new term only in the purchase contract
- By a written amendment signed by the agreement parties
- By the licensee changing the office copy alone
Show answer and explanation
Answer: C
A change to commission amount or payment time must be written and signed by the parties. A real estate contract form cannot replace that amendment.
5. After an Illinois brokerage agreement terminates, which duty ordinarily continues by statute?
- Marketing the property indefinitely
- Accepting every later offer
- Keeping the client's confidential information confidential
- Renewing the agreement automatically
Show answer and explanation
Answer: C
Section 15-30 preserves confidentiality and the duty to account for related money and property after termination, unless the agreement adds further duties.
How should you review this Illinois topic?
- Session
- 1. Identify agreement parties and timing
- Focus
- Sponsoring broker, consumer, designated agent, seller, owner, buyer, tenant, written form, listing presentation, marketing, and assisted licensed activity
- Proof you are ready
- Resolve fifteen scenarios about who signs and when the agreement must exist.
- Session
- 2. Compare agreement types
- Focus
- Listing, buyer, tenant, property management, exclusive, non-exclusive, bilateral, unilateral, property terms, parties, duties, compensation, and duration
- Proof you are ready
- Create a blank comparison grid from memory and fill every required element.
- Session
- 3. Memorize minimum services
- Focus
- Accept and present, develop and communicate, negotiate and present, notices, signed contract or lease, contingencies, and client questions
- Proof you are ready
- Explain why ten waiver clauses would cause an agreement to lose exclusive status.
- Session
- 4. Audit compensation and duration
- Focus
- Basis, amount, time, cooperating broker, signed amendment, purchase-contract prohibition, automatic expiration, one-year term, annual right, and 30-day notice
- Proof you are ready
- Correct ten defective compensation and duration clauses.
- Session
- 5. Handle termination and special clauses
- Focus
- Protection period, residential four-unit rule, confidentiality, accounting, sponsor suspension or revocation, fair-housing statement, record retention, and five years
- Proof you are ready
- State every continuing duty and protection-period exception without notes.
- Session
- 6. Apply AGREED
- Focus
- Parties, timing, type, required terms, exclusivity, changes, termination, and records
- Proof you are ready
- Score at least 90% on fresh Illinois brokerage-agreement questions.
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.
Practice the Illinois rule in context
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Questions students ask about Illinois Brokerage Agreements
What is a brokerage agreement in Illinois?
A brokerage agreement is a written agreement between a sponsoring broker and a consumer for licensed activities, or future licensed activities, provided in return for compensation or the right to receive compensation from another source. It may be bilateral or unilateral and exclusive or non-exclusive, depending on its terms.
Do all Illinois real estate brokerage agreements have to be written?
Yes. The current statutory definition says all brokerage agreements must be in writing. Rule 1450.770 recognizes physical or electronic writing for an exclusive agreement. Do not apply an older rule that only exclusive agreements had to be written.
When must an Illinois seller sign a brokerage agreement?
A licensee must enter into a written brokerage agreement with a seller or owner before marketing or listing that consumer's real estate for sale or lease. A listing presentation can occur before an agreement, but public marketing, listing entry, signs, and other licensed marketing work wait for the written relationship.
When must an Illinois buyer sign a brokerage agreement?
Under the current rule, a licensee must enter into a written buyer or tenant brokerage agreement before engaging in licensed activity intended to help with a purchase or lease, or as soon as reasonably practical after performing that activity. The safer exam choice is the timely written agreement, not an indefinite oral relationship.
What must an Illinois buyer or tenant brokerage agreement contain?
It must state the agreed compensation basis or amount and time of payment; name the sponsoring broker, designated agents, and buyers or tenants; contain the required signatures; state the broker or leasing agent's duties; and give the duration with an automatic expiration date or, if longer than one year, an annual termination right on 30 days' prior written notice.
What must an Illinois listing agreement contain?
A written listing agreement must include the list price; compensation basis or amount, timing, and amounts paid to cooperating brokers representing other parties; the sponsoring broker, designated agents, and owners; property identification; required signatures; listing-broker or leasing-agent duties; and the agreement's duration and expiration provisions.
What minimum services come with an exclusive Illinois brokerage agreement?
The sponsoring broker, through sponsored licensees, must accept and present offers and counteroffers; assist with developing, communicating, negotiating, and presenting offers, counteroffers, and related notices until an agreement is signed and contingencies are satisfied or waived; and answer the client's questions about those matters. An agreement that omits or waives those services is treated as non-exclusive under the current rule.
Can an Illinois purchase contract change an agreed brokerage commission?
No. A commission amount or payment-time amendment must be in writing and signed by the parties to the brokerage agreement. Rule 1450.770 says a licensee may not use a real estate contract form to change previously agreed commission-payment terms.
What duties survive an Illinois brokerage agreement's termination?
Unless the written agreement adds more, the sponsoring broker and affiliated licensees must still account for transaction money and property and preserve confidential information received during the relationship. A contractual protection period can also affect compensation, subject to the current special rule for residential property of four units or fewer.
Are these official Illinois broker exam questions?
No. They are original study questions aligned to the Illinois brokerage-agreements topic in the outline effective June 24, 2026. The law and administrative rule 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 definitions
- 225 ILCS 454/15-15, duties of licensees representing clients
- 225 ILCS 454/15-30, duties after brokerage-agreement termination
- 225 ILCS 454/15-50 and 15-75, written agreements and minimum services
- 225 ILCS 454/10-25, effect of sponsor suspension or revocation
- 68 Ill. Adm. Code 1450.770, amended July 13, 2026
- 68 Ill. Adm. Code 1450.755, brokerage-agreement recordkeeping
- IDFPR core curriculum for brokerage agreements and disclosures
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.