- Official section
- National X
- Broker weight
- 12%
- Expected scored items
- About 12 of 100 national items
National Section X study guide
Practice of Real Estate for the Illinois broker exam
Practice questions test professional judgment across several laws. Start by naming the regulated conduct: housing choice, competitor coordination, phone solicitation, advertising, data handling, transaction money, or due diligence.
What does this exam area cover?
Short answer: Know fair housing principles, exemptions, protected classes and prohibited conduct; accessibility and accommodation duties; employee and independent-contractor status; antitrust violations and penalties; Do Not Call compliance; social and internet advertising; protection of confidential information; handling funds; and transaction due diligence.
The national outline uses federal principles, while Illinois and local rules can add protected classes, advertising requirements, privacy duties, and escrow procedures. PSI marks the separate supervisory-responsibilities subsection as instructor-only, so broker candidates should focus the 12% weight on Sections A through C.
Practice the topic in Pass Illinois
From concept to decision
Drill this topic, then review the explanation
Pass Illinois gives you original national and Illinois questions, topic-by-topic study, clear explanations, timed practice, flashcards, progress tracking, and Math Coach. Start free, find the weak distinction, and focus the next session there.
What is on the official outline?
- Topic
- Fair Housing Act principles and exemptions
- What to know
- Covered transactions, protected housing activity, owner-occupied small buildings, qualifying owner-sold single-family housing, religious organizations, private clubs, and housing for older persons
- Best exam move
- Treat exemptions narrowly and check whether advertising, broker involvement, race, or state law defeats the claimed exemption.
- Topic
- Federal protected classes
- What to know
- Race, color, national origin, religion, sex, familial status, and disability
- Best exam move
- Identify the protected basis and compare the service, term, statement, or housing opportunity provided.
- Topic
- Gender identity and sexual orientation
- What to know
- PSI's express testing of discrimination based on gender identity and sexual orientation
- Best exam move
- Treat adverse housing conduct based on either characteristic as prohibited for the exam.
- Topic
- Prohibited fair housing conduct
- What to know
- Redlining, blockbusting, steering, disparate treatment, refusal, different terms, false availability, retaliation, and interference
- Best exam move
- Look for a housing decision or service changed because of a protected characteristic.
- Topic
- Fair housing advertising
- What to know
- Words, images, targeting, audience exclusion, preference, limitation, protected-class signals, accessibility symbols, and equal housing message
- Best exam move
- Evaluate the likely message to an ordinary reader, not only the advertiser's claimed intent.
- Topic
- ADA accessibility and accommodations
- What to know
- Public accommodations, real estate offices, equal services, communication, accessible facilities, reasonable modifications, and overlap with housing law
- Best exam move
- Identify the facility and activity before choosing ADA, Fair Housing Act, Section 504, or overlapping duties.
- Topic
- Employee and independent-contractor status
- What to know
- Control, written agreement, compensation method, federal tax statutory nonemployee test, licensing, supervision, and law-specific classification
- Best exam move
- Do not let an independent-contractor label erase brokerage supervision or substitute for the governing legal test.
- Topic
- Antitrust laws and penalties
- What to know
- Sherman Act, price fixing, commission fixing, market or customer allocation, group boycott, tying, bid rigging, criminal fines, imprisonment, and civil damages
- Best exam move
- Competitors must decide fees, services, territories, clients, and vendors independently.
- Topic
- Do Not Call compliance
- What to know
- National Registry access, 31-day scrubbing, written procedures, training, monitoring, entity-specific requests, established business relationship, inquiry, and written permission
- Best exam move
- Check registry status, relationship or consent, call type, timing, and any direct stop request before dialing.
- Topic
- Social media and internet communication
- What to know
- Truthful content, brokerage identity, license status, listing authority, fair housing, targeting, testimonials, altered images, links, messaging, records, and platform limits
- Best exam move
- Treat every post, story, message, video, and landing page as regulated advertising when it promotes brokerage activity.
- Topic
- Confidential personal information
- What to know
- Written, verbal, and electronic information; collection, access, storage, transmission, authentication, retention, disposal, breach, and vendor access
- Best exam move
- Use minimum necessary access and a secure channel rather than forwarding sensitive data for convenience.
- Topic
- Funds of others
- What to know
- Escrow or trust account, deposit, documentation, reconciliation, authorized disbursement, dispute, commingling, conversion, and audit trail
- Best exam move
- Keep funds separate, traceable, timely handled, and disbursed only under the agreement and law.
- Topic
- Transaction due diligence
- What to know
- Identity and authority, property facts, documents, deadlines, title, financing, disclosures, inspections, public records, specialists, and follow-up
- Best exam move
- Investigate a red flag through the correct source without guaranteeing facts outside the licensee's competence.
Which distinctions produce the most mistakes?
- Terms
- Steering vs. blockbusting
- Difference
- Steering channels a person toward or away from areas because of protected characteristics. Blockbusting induces transactions by suggesting protected-class change will harm the area or values.
- Question cue
- Directing housing choice versus provoking fear-driven selling.
- Terms
- Redlining vs. steering
- Difference
- Redlining denies or changes services based on area or protected-class composition. Steering directs a person's housing search.
- Question cue
- Service map or lending rule versus neighborhood recommendation.
- Terms
- Disparate treatment vs. disparate impact
- Difference
- Disparate treatment is intentional different treatment because of a protected characteristic. Disparate impact examines a neutral policy's discriminatory effect under the governing legal framework.
- Question cue
- Different rule on purpose versus one rule with unequal effect.
- Terms
- Price fixing vs. independent pricing
- Difference
- Price fixing is competitor agreement on price, commission, fee, or pricing element. Independent pricing is each business deciding without competitor coordination.
- Question cue
- Let's all charge versus my firm independently chose.
- Terms
- Market allocation vs. lawful specialization
- Difference
- Market allocation is a competitor agreement not to compete for territories or customers. Lawful specialization is an independent business choice.
- Question cue
- You take north, I take south versus a firm chooses its own focus.
- Terms
- Group boycott vs. individual vendor choice
- Difference
- A group boycott involves coordinated refusal among competitors. One firm can independently select a vendor for legitimate reasons.
- Question cue
- Competitors agree to cut off versus one firm's documented decision.
- Terms
- Employee vs. statutory nonemployee
- Difference
- Employee status depends on the applicable control and legal test. A qualified licensed real estate agent can be self-employed for federal tax purposes when Section 3508 conditions are met.
- Question cue
- Law-specific test, not job title alone.
- Terms
- Commingling vs. conversion
- Difference
- Commingling improperly mixes entrusted funds with personal or business funds. Conversion is unauthorized use or control of another's money.
- Question cue
- Mixed account versus taken or spent funds.
- Terms
- Confidential information vs. material property fact
- Difference
- Protected client or personal information should be safeguarded. A known material property fact cannot be hidden merely by labeling it confidential.
- Question cue
- Negotiating position or identifiers versus legally disclosable defect.
How should you solve a practice-of-real-estate question?
- Name the conduct: housing discrimination, accessibility, worker status, competitor coordination, solicitation, advertising, privacy, money, or due diligence.
- Identify every actor and whether they are a consumer, protected person, competitor, client, vendor, worker, or fund owner.
- Find the trigger: protected basis, agreement among competitors, registry status, consumer report, sensitive information, or entrusted funds.
- Apply the narrow rule, exemption, timing, and required documentation.
- Check whether federal, Illinois, and local rules can overlap rather than cancel one another.
- Reject instructions from a client, owner, broker, or competitor that require unlawful conduct.
- Choose the response that is independent, consistent, documented, secure, and within the licensee's competence.
- Trigger
- Protected class changes housing service
- Rule family
- Fair housing
- Immediate exam move
- Compare treatment and refuse discrimination
- Trigger
- Competitors discuss commissions
- Rule family
- Antitrust
- Immediate exam move
- Do not agree; pricing must be independent
- Trigger
- Consumer number is on registry
- Rule family
- Do Not Call
- Immediate exam move
- Verify a valid exception and any entity-specific request
- Trigger
- Post promotes a listing
- Rule family
- Advertising
- Immediate exam move
- Apply brokerage identity, truth, authority, and fair housing rules
- Trigger
- Email contains bank or identity data
- Rule family
- Privacy
- Immediate exam move
- Limit access and use a secure approved channel
- Trigger
- Earnest money is received
- Rule family
- Funds of others
- Immediate exam move
- Deposit, document, safeguard, reconcile, and disburse lawfully
- Trigger
- Property fact appears inconsistent
- Rule family
- Due diligence
- Immediate exam move
- Verify through the proper record or specialist
How do the rules work in scenarios?
Spotting commission price fixing
Scenario: Competing managing brokers agree that none of their firms will accept a listing below the same commission percentage.
- The firms are competitors.
- Commission is a price term.
- The agreement removes independent pricing.
Answer: The agreement is classic horizontal price fixing under antitrust principles.
Applying the Do Not Call exceptions
Scenario: A homeowner asked a brokerage for a valuation two months ago, then directly told the brokerage yesterday never to call again.
- The recent inquiry might otherwise support a limited established-business-relationship exception.
- The homeowner made an entity-specific do-not-call request.
- That direct request overrides the relationship exception.
Answer: The brokerage should not make the sales call.
Handling targeted housing advertising
Scenario: A licensee configures an online rental campaign to exclude audiences associated with families with children.
- The targeting affects who receives a housing advertisement.
- Familial status is federally protected.
- Platform settings are part of the advertising conduct.
Answer: The exclusion creates a fair housing advertising and access problem.
Protecting transaction funds
Scenario: A broker receives earnest money and deposits it into the firm's operating account for one day before moving it to escrow.
- The money belongs to others and must be handled under escrow rules.
- The operating account contains business funds.
- Temporary mixing is still commingling.
Answer: The broker should place and document the funds through the required escrow process without using the operating account.
What are the common exam traps?
- Trap
- An owner instruction excuses housing discrimination.
- Correction
- A licensee must refuse unlawful instructions regardless of who gave them.
- Trap
- A Fair Housing Act exemption allows any advertisement.
- Correction
- The advertising prohibition and other federal, state, or local laws can still apply.
- Trap
- Commissions are standard, fixed, or required by law.
- Correction
- Brokerage fees are independently determined and negotiable, not set by competitors.
- Trap
- Antitrust requires a signed written agreement.
- Correction
- An unlawful agreement can be inferred from words or coordinated conduct; formal writing is not required.
- Trap
- A recent inquiry always permits calls.
- Correction
- A direct entity-specific do-not-call request overrides the relationship exception.
- Trap
- A social media story disappears, so advertising rules do not apply.
- Correction
- Temporary or private-format content can still be regulated brokerage advertising and communication.
- Trap
- Independent contractor means no supervision.
- Correction
- Tax classification does not erase licensing-law sponsorship and supervision duties.
- Trap
- It is safe to email financial details if the client asked.
- Correction
- Use approved secure methods, verify recipients and instructions, and minimize sensitive data.
- Trap
- A broker can disburse disputed earnest money based on personal fairness.
- Correction
- Disbursement follows the agreement, written direction, law, and required dispute process.
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. Two competing brokerages agree that each will serve only one half of the county. What violation is most directly described?
- Market allocation
- Independent specialization
- Reasonable accommodation
- Title insurance
Show answer and explanation
Answer: A
Competitors agreed to divide territory and avoid competition, which is market allocation.
2. Which statement about real estate commissions is most accurate?
- They are set by federal law
- They must match competing firms
- Each brokerage must determine its pricing independently
- Brokers may agree on a neighborhood minimum
Show answer and explanation
Answer: C
Competitor agreement on commission terms creates antitrust risk. Each business must price independently.
3. A consumer directly asks a brokerage not to call again. What effect does that request have on an established-business-relationship exception?
- No effect
- It overrides the exception for future sales calls by that seller
- It lasts one day
- It applies only to email
Show answer and explanation
Answer: B
The entity-specific stop request controls even when a relationship might otherwise allow a live sales call.
4. Which action is conversion rather than only commingling?
- Placing client money in an operating account
- Using escrow money to pay the broker's personal bill
- Recording a deposit in the ledger
- Reconciling the trust account
Show answer and explanation
Answer: B
Using another person's money for a personal bill is unauthorized use, which is conversion. Mixing alone is commingling.
5. Which federal tax condition is required for a licensed real estate agent to qualify as a statutory nonemployee?
- All pay must be hourly
- A written contract states the agent will not be treated as an employee for federal tax purposes
- The agent may not hold a license
- The brokerage may not supervise licensed activity
Show answer and explanation
Answer: B
Section 3508 also requires output-based compensation, but the written federal-tax-status contract is one of the express conditions.
How should you study this area?
- Session
- 1. Fair housing coverage
- Focus
- Protected classes, transactions, exemptions, gender identity, sexual orientation, and overlapping law
- Proof you are ready
- Apply or reject an exemption without overlooking advertising or state law.
- Session
- 2. Prohibited conduct
- Focus
- Steering, blockbusting, redlining, disparate treatment, advertising, accessibility, and retaliation
- Proof you are ready
- Name the conduct from ten one-sentence scenarios.
- Session
- 3. Antitrust
- Focus
- Price fixing, allocation, boycott, tying, independent decisions, criminal penalties, and civil damages
- Proof you are ready
- Identify the competitor agreement and explain why it restricts competition.
- Session
- 4. Outreach and advertising
- Focus
- Do Not Call, 31-day registry, exceptions, direct requests, social media, internet ads, and records
- Proof you are ready
- Approve or reject each call and post using a stated trigger.
- Session
- 5. Professional systems
- Focus
- Worker status, confidential data, secure communication, vendors, and supervision boundary
- Proof you are ready
- Separate tax classification from licensing duties and secure three data flows.
- Session
- 6. Money and diligence
- Focus
- Escrow, commingling, conversion, records, disbursement, identity, authority, facts, and specialist referral
- Proof you are ready
- Trace funds and resolve a transaction red flag without overstepping competence.
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.
Illinois Practice of Real Estate Exam Guide FAQ
How much of the Illinois broker exam is Practice of Real Estate?
Practice of Real Estate is 12% of the national broker portion, or about 12 of the 100 scored national items. It is the third-largest national area after Contracts and Agency.
What are the federal Fair Housing Act protected classes?
The federal classes are race, color, national origin, religion, sex, familial status, and disability. The PSI outline also expressly tests protections based on gender identity and sexual orientation. Illinois and local law add protections.
What fair housing violations should I know?
Know refusal to sell or rent, discriminatory terms or services, steering, blockbusting, redlining, discriminatory advertising, false statements about availability, and unequal treatment because of a protected characteristic.
Does a Fair Housing Act exemption allow discriminatory advertising?
Do not assume so. The owner-occupied small-building and qualifying owner-sold single-family exemptions are narrow, and the federal advertising prohibition can still apply. Race discrimination also remains prohibited by other federal law.
What antitrust violations are most important for the real estate exam?
Know price fixing, market or customer allocation, group boycotts, and tying arrangements. Competitors must make independent decisions about commissions, fees, territories, clients, vendors, and services.
What are the federal criminal penalties for a Sherman Act violation?
Current federal maximums include up to $100 million for a corporation, up to $1 million for an individual, and up to 10 years in prison for an individual. An alternative fine based on twice the gain or twice the loss can be higher.
How often must a telemarketer scrub against the National Do Not Call Registry?
The FTC safe-harbor framework requires a registry version downloaded no more than 31 days before the call. A consumer's entity-specific do-not-call request overrides an established-business-relationship exception.
When can a licensed real estate agent be a statutory nonemployee for federal tax purposes?
The IRS test requires licensing, substantially all compensation tied to sales or other output rather than hours, and a written contract stating the worker will not be treated as an employee for federal tax purposes. Other laws and actual duties can use different tests.
What is the difference between commingling and conversion?
Commingling improperly mixes client or transaction funds with personal or operating funds. Conversion is unauthorized use or control of another person's funds. Conversion is the more direct taking or misuse, but both are serious.
Are these practice 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
- HUD Fair Housing Rights and Obligations
- HUD, Fair Housing Act text
- U.S. Department of Justice, ADA Title III
- U.S. Department of Justice, Sherman Act offenses and penalties
- Federal Trade Commission, Telemarketing Sales Rule compliance
- Internal Revenue Service, statutory nonemployees
- Illinois Administrative Code, 68 Ill. Adm. Code Part 1450
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.