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Illinois License Act study guide

Illinois brokerage agreements: who signs, when, and what must be included

An Illinois brokerage agreement puts the sponsoring broker's relationship with a client in writing. For the exam, start with the client's role: sellers and owners sign before marketing; ordinary buyer or tenant assistance has a different timing rule. Then check the required terms, minimum services, expiration and any protection period.

Last reviewed:

When is a written brokerage agreement required?

Seller or owner: written agreement before marketing or listing. Buyer or tenant: before or as soon as reasonably practical after ordinary licensed assistance. A listing agent who will act as a dual agent must first execute the buyer/tenant agreement and comply with the dual-agency requirements. Do not apply one deadline to every relationship.

Illinois brokerage agreement timing by relationship
RelationshipWhat must happenCommon exam trap
Seller or ownerEnter the written agreement before marketing or listing the property for sale or lease. Rule 1450.770(g).Coming-soon marketing is not a sign-later exception.
Ordinary buyer or tenant assistanceEnter the agreement before, or as soon as reasonably practical after, licensed activity intended to assist a purchase or lease. Subsection (h).This is not a fixed number of days, or permission to postpone until closing.
Listing agent working for seller with an unrepresented buyer/tenantWith an executed seller/owner agreement, give written no-agency disclosure before the activities described in subsection (i)(1).The buyer is not automatically the listing agent's client.
Listing agent acting as a dual agentExecute the buyer/tenant agreement and comply with Section 15-45 before any licensed activity for that buyer/tenant. Subsection (i)(2).The ordinary buyer timing allowance does not supply a dual-agency grace period.

Section 15-50 requires the written relationship terms and designation of the licensees acting as the client's agents. A brokerage agreement engages the broker; an agency disclosure explains whom the licensee represents. A purchase contract binds the transaction parties. One document does not automatically do the others' jobs.

Dual agency needs more than a second brokerage agreement

Section 15-45 requires informed written consent from all clients before acting as a dual agent. A licensee offering dual representation presents the disclosure when entering the brokerage agreement; the client may sign then or before the licensee acts as a dual agent for that client. Written confirmation of prior consent is also required in the transaction. The statute says it should be obtained when the clients execute an offer or purchase/lease contract; if included there, the clients must sign the document and initial the confirmation. Consent and later confirmation serve different steps.

Use the agency versus no-agency guide if the question turns on whom the broker represents. The table above follows Rule 1450.770(g) to (i) as amended effective July 13, 2026. This lesson teaches exam rules, not wording for a live contract.

What terms belong in each type of agreement?

Exclusive and non-exclusive agreements both need written terms. Electronic writing can qualify. Read the agreement type first, then check the relevant list in Rule 1450.770.

Required Illinois brokerage agreement terms
AgreementNames, signatures and dutiesMoney, property and duration
Buyer or tenant, subsection (c)Name the sponsoring broker, designated agents and buyers/tenants. Include the sponsor's and buyers'/tenants' or authorized signatories' signatures, and the broker's or leasing agent's duties.State the agreed compensation basis or amount and payment time. Include duration, read with Section 10-25 below.
Listing, subsection (d)Name the sponsor, designated agents and owners. Include sponsor and owner/authorized signatures and broker/leasing-agent duties.Identify the property by address and/or legal description; give list price, commission basis/amount, payment time and amounts to cooperating brokers representing other parties. Include duration.
Property management, subsections (e) and (f)A written management agreement is required when the duties include licensed activity. Name the sponsor, designated agents and owners; include sponsor and owner/authorized signatures and both broker and owner duties.Identify the property, include list price, agreed payment/compensation and timing, amounts to cooperating brokers, and duration. Do not omit list price merely because this is the management list.

Subsection (m) also requires each brokerage agreement to state the prohibition on discriminatory showing, display, leasing or sale by an owner or licensee. Use its full current protected-class list and Article 3 of the Illinois Human Rights Act; a short federal-only list does not cover the Illinois requirement.

For the definition and listing-specific vocabulary, read listing agreement. Keep compensation terms separate from agency status: paying a broker does not, by itself, decide who the broker represents.

Does an annual cancellation right replace an expiration date?

No. Section 10-25 requires definite automatic expiration. If the term is longer than one year, it also requires an annual termination right with no more than 30 days' prior written notice. The statute says an agreement missing the required provision is void. A longer term needs both protections.

Read the Act together with the rule

Rule 1450.770(c)(5), (d)(7) and (f)(7) still use “or” between expiration and the longer-term termination wording. The current Section 10-25 uses “and” and caps prior written notice at 30 days. Apply the controlling statute rather than treating the rule's wording as permission for an agreement with no definite expiration.

The current statutory source note includes P.A. 104-852, effective August 21, 2026. Use the current text when an older study summary treats the two protections as alternatives.

For example, a 24-month agreement with an automatic end date still needs the annual termination right. A six-month agreement needs definite expiration but does not trigger the longer-than-one-year annual-right condition. Additional cancellation terms require their own reading; annual termination is not unrestricted cancellation on any date.

What minimum services make an agreement exclusive?

Section 15-75 requires an exclusive agreement to specify that the sponsoring broker, through sponsored licensees, will:

  1. Receive and present offers and counteroffers for the property the client is selling, buying or leasing.
  2. Help develop, communicate, negotiate and present offers, counteroffers and related notices until the purchase or lease agreement is signed and its contingencies are satisfied or waived.
  3. Answer the client's questions about those offers, counteroffers, notices and contingencies.

Section 15-75 and Rule 1450.770(b)(2) work together: missing minimum-service language or a waiver makes the agreement non-exclusive. That is a different consequence from Section 10-25's void-agreement rule. Memorize the defect and its stated result together.

How do commission changes, protection periods and expiration work?

Changing commission terms

A brokerage agreement must require commission-amount or payment-time amendments to be written and signed by its parties. A licensee may not use a transaction contract form to change previously agreed commission-payment terms. Those are the separate rules in subsections (j) and (k).

A protection period is conditional

A protection period concerns possible compensation after the agreement ends; it is not ongoing exclusive representation. For residential property of four units or fewer, subsection (n) requires an exception: no fee is due under that agreement if the consumer enters a valid written brokerage agreement with another sponsoring broker during the protection period. The new agreement need not be exclusive. The rule does not set one standard protection-period length.

Earnest money and the fair-housing statement

If a listing says that, after buyer default, the broker's full commission or fees come out of earnest money before the seller receives the balance, subsection (l) requires that provision in letters larger than the agreement's general text. This formatting requirement does not itself authorize an escrow disbursement. Keep it separate from subsection (m)'s required nondiscrimination statement.

What continues after the agreement ends?

Section 15-30 preserves accounting for transaction money and property and confidentiality of information received during the agreement. Written terms may add continuing duties. Rule 1450.755 separately requires transaction records to be retained for five years. Under Section 10-25, suspension or revocation of the sponsoring broker's license causes the brokerage agreement to expire on the effective date of that action.

Discussing a future agreement with an exclusively represented consumer

Rule 1450.770(b)(3) permits the discussion if the consumer initiates contact. Its alternative has several conditions: mail or email a request for the existing agreement's expiration date to the sponsoring broker; receive no written response within 10 calendar days and no requested information within 14 calendar days; and be unable to obtain it from another shared broker-information source. Simply waiting 10 days does not satisfy the whole alternative or cancel the existing agreement.

Five Illinois brokerage agreement practice questions

Choose an answer before opening each explanation. These are original teaching questions, not recalled PSI items. For each one, identify the client's role, the triggering fact and the rule's exact consequence.

1. Can the coming-soon advertisement go live?

An owner gives a broker verbal permission to advertise a home as coming soon. The listing agreement is still unsigned. When may the broker begin marketing the property?

  • A. After recording the verbal permission in the file.
  • B. After the owner and sponsoring broker sign the written listing agreement.
  • C. After emailing an unsigned draft, provided showings wait.
  • D. As soon as reasonably practical after the first advertisement.
Answer and why each choice works or fails

Answer: B. After the owner and sponsoring broker sign the written listing agreement.

  • A: A file note does not replace the written listing agreement and required signatures.
  • B (correct): This meets the seller-side timing and signature requirements. Coming-soon advertising still markets the property.
  • C: An unsigned draft is not the executed agreement. Delaying showings does not stop an advertisement from being marketing.
  • D: That imports the ordinary buyer/tenant timing language into the seller/owner rule. The seller agreement comes first.

Change the facts: The listing agreement is already executed, and an unrepresented buyer asks the listing agent about the home. Under subsection (i)(1), the agent may perform licensed activities for the seller with that buyer after giving written notice that the agent does not represent the buyer. That notice does not create buyer agency.

Rule 1450.770(d)(5) and (g)

2. What does a minimum-service waiver change?

A signed Illinois brokerage agreement is labeled exclusive, but it expressly waives the Section 15-75 minimum services. How does Rule 1450.770 classify the agreement?

  • A. Exclusive because both parties signed it.
  • B. Exclusive if the client negotiates without the broker.
  • C. Non-exclusive.
  • D. Automatically void in its entirety.
Answer and why each choice works or fails

Answer: C. Non-exclusive.

  • A: Signatures do not cure a waiver of the services required for exclusive classification.
  • B: The client's willingness to handle negotiations does not preserve exclusivity when the minimum services are waived.
  • C (correct): Subsection (b)(2) expressly gives this result when the required service language is missing or the minimum services are waived.
  • D: That is not the consequence stated in subsection (b)(2). Do not substitute the separate expiration provision's void-agreement rule.

Change the facts: The agreement instead includes all three minimum services without a waiver. That removes this classification defect, but the agreement still needs to meet the other requirements for an exclusive agreement.

Rule 1450.770(b)(1) and (2); Act Section 15-75

3. Is a two-year end date enough?

A brokerage agreement has a definite 24-month term and automatic expiration. What additional duration protection does Section 10-25 require?

  • A. An annual termination right with no more than 30 days' prior written notice.
  • B. No additional right because the end date is definite.
  • C. A right to cancel on 60 days' notice after the second year.
  • D. No expiration date, provided the client can cancel annually.
Answer and why each choice works or fails

Answer: A. An annual termination right with no more than 30 days' prior written notice.

  • A (correct): The term exceeds one year, so the statutory annual termination right is needed in addition to definite automatic expiration.
  • B: The end date meets only one part of Section 10-25. The longer-than-one-year condition triggers the additional right.
  • C: This exceeds the statutory notice ceiling and does not provide annual termination during the term.
  • D: Annual termination does not replace the statute's definite-expiration requirement.

Change the facts: The term is exactly one year. Section 10-25's additional annual right is triggered by a term longer than one year, not exactly one year. Definite automatic expiration is still required; other agreed cancellation rights may also apply.

225 ILCS 454/10-25, current text including P.A. 104-852, effective August 21, 2026

4. What happens during a protection period?

A brokerage agreement for a three-unit residential property contains a post-termination protection period. During that period, the owner signs a valid written brokerage agreement with another sponsoring broker. What must the earlier agreement provide under Rule 1450.770(n)?

  • A. The earlier broker always collects a full commission.
  • B. No commission or fee is due under the earlier agreement in this situation.
  • C. The exception applies only if the new agreement is exclusive.
  • D. A verbal promise to use another broker would produce the same result.
Answer and why each choice works or fails

Answer: B. No commission or fee is due under the earlier agreement in this situation.

  • A: This ignores the required exception for a valid written agreement with another sponsor during the protection period.
  • B (correct): The facts meet the residential unit limit, timing, written-agreement and different-sponsor conditions.
  • C: Subsection (n) requires a valid written agreement with another sponsoring broker. It does not add an exclusivity condition.
  • D: The specified exception requires a valid written brokerage agreement, not a verbal promise.

Change the facts: The property has five residential units. These facts no longer establish subsection (n)'s four-or-fewer-unit exception. They do not establish that a commission is automatically earned, either; the agreement and other applicable law still matter.

Rule 1450.770(n)

5. Can the purchase form change the commission terms?

A broker inserts a clause in the buyer-seller purchase contract to change commission-payment terms already agreed in the listing agreement. Which answer follows Rule 1450.770?

  • A. The purchase contract always replaces the listing agreement.
  • B. The change works if only the buyer initials it.
  • C. The change works if the broker explains it orally.
  • D. The broker may not use the transaction contract form for that change.
Answer and why each choice works or fails

Answer: D. The broker may not use the transaction contract form for that change.

  • A: The documents govern different relationships. The transaction form cannot be used for this prohibited change.
  • B: The buyer's initials do not supply a signed amendment by the parties to the brokerage agreement, and the wrong-form problem remains.
  • C: An oral explanation does not meet the signed-writing requirement for a commission amendment.
  • D (correct): Subsection (k) prohibits this use of real estate contract forms. Subsection (j) separately requires commission amendments to be written and signed by the parties.

Change the facts: The parties to the brokerage agreement execute a proper written amendment to its commission amount or payment time. Subsection (j) permits that method; it does not make every commission term permanently unchangeable.

Rule 1450.770(j) and (k)

For another set, try the free brokerage agreements practice page. When reviewing a miss, write one sentence explaining which fact would have changed the answer.

Keep the next practice session short

If you prefer studying between other commitments, download the Pass Illinois app for exam prep. Work through the free questions above first, then focus your next session on the distinction you missed. Practice results are study feedback, not a guarantee of passing.

Illinois brokerage agreement FAQs

Does an Illinois buyer brokerage agreement have to be in writing?

Yes. Rule 1450.770 covers exclusive and non-exclusive buyer or tenant agreements. For ordinary assistance, subsection (h) places the agreement before or as soon as reasonably practical after licensed purchase or lease assistance. A listing agent acting as a dual agent faces subsection (i)(2)'s stricter before-activity requirement.

Can the seller's agent work with an unrepresented buyer without becoming the buyer's agent?

Yes. Under Rule 1450.770(i)(1), an agent with an executed seller or owner agreement may perform licensed activities for that client with an unrepresented buyer or tenant after written disclosure that the agent does not represent the buyer or tenant. Working with both sides does not, by itself, establish dual agency.

Can an exclusive agreement waive the minimum services?

A waiver, or missing required service language, makes the agreement non-exclusive under Rule 1450.770(b)(2). The exclusive label and the client's consent do not preserve exclusive status. This consequence is different from Section 10-25's void-agreement consequence for missing the required duration provision.

How long can an Illinois brokerage agreement last?

Section 10-25 does not impose a one-year maximum. It requires definite automatic expiration and, if the term is longer than one year, an annual termination right requiring no more than 30 days' prior written notice. A longer term therefore needs both protections. Read any additional cancellation terms separately.

Is there a standard Illinois protection-period length?

Rule 1450.770(n) does not prescribe a universal number of days. Read the agreed period and its conditions. For residential property of four units or fewer, the agreement must include the exception for a valid written agreement with another sponsoring broker during that period.

Can an oral brokerage agreement ever be enforced?

Licensees must use a written agreement. Section 15-50(a-5) nevertheless preserves a client's ability to seek enforcement of an oral agreement and a court's legal or equitable remedies. It is not permission for a licensee to skip the writing or a promise that a broker will recover a commission.

Does expiration end confidentiality and recordkeeping?

No. Section 15-30 preserves accounting for transaction money and property and protection of confidential information received during the agreement. A written agreement may add continuing duties. Rule 1450.755 separately requires five-year transaction record retention; an expired agreement is not permission to discard the file.

Are these official Illinois real estate exam questions?

No. These five questions are original study exercises. They teach Brokerage Agreements in Illinois outline II.D. PSI assigns 16 of the 40 scored broker-state items to the whole Real Estate License Act area, not 16 questions to brokerage agreements alone. There is no separately published question count for this subtopic.

Sources and exam scope

Brokerage Agreements appears in II.D of PSI's Illinois outline. The whole Real Estate License Act area has 16 of 40 scored broker-state items, or 40%. PSI does not publish a separate brokerage-agreements quota. Use the role, writing, duration and service distinctions to solve the facts in front of you.

The October 23, 2026 review used Illinois' published current statutory text and the July adopted rule, rather than proposed amendments or a generic national buyer-agreement summary. The specific duration wording difference is explained above. For a live agreement or fee dispute, ask your designated managing broker and an Illinois attorney to review the actual facts and document.

Choose one response. You can add a short note, especially if a rule, example, or explanation needs work. No name or email is requested.