Practice of Real Estate topic guide
Illinois real estate due diligence and broker limits
A useful investigation answers a real decision: Can the buyer use the property as planned? Who can sign? What does the inspection mean? Start with that question, then find the right source and the deadline for acting on the answer.
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The short answer
Real estate due diligence means investigating the property, the parties and the transaction before the relevant decision or deadline. An Illinois broker coordinates brokerage work, follows up on red flags, communicates accurately and handles documents properly. Legal opinions, technical inspections, appraisals and other regulated services need the appropriate professional authority. A checklist helps organize the work; it does not guarantee the property or replace the contract.
PSI places due diligence in National X.C.3, within Practice of Real Estate. The whole national broker area receives 12% of the 100 scored national questions, or 12 questions. There is no separate published due-diligence quota. Illinois duties and professional-license boundaries add to that outline. These scenarios are original teaching material, not PSI questions or a validated readiness assessment.
Build a plan around the decision and the deadline
- Write the actual question. Include the proposed use, concern, property, decision and person who needs the answer.
- Read the relevant contract provision. Record the investigation period separately from the notice deadline, required content, delivery method, recipient and any response or extension process.
- Assign the task to the right source. A seller statement, survey, title document, municipal response, inspection report and association package answer different questions.
- Name the person responsible for the next step. A referral or report request is not proof that the task was finished.
- Compare the answer with the other available facts. A contradiction, missing record or unresolved defect calls for follow-up, rather than a reassuring guess.
- Stay within the role. Describe an observation, attribute a supplied fact and explain the next step without inventing a structural diagnosis or legal remedy.
- Communicate the result and the remaining uncertainty promptly. Obtain the required professional review and preserve the client decision without promising an approval, repair, loan or insurance outcome.
- Save the request, response, source date, report and any required notice or delivery proof. Review missed practice answers by explaining which fact or condition controls.
| Decision or concern | Useful source or document | Follow-up to track |
|---|---|---|
| Can this person convey the property? | Title materials, the actual trust or entity authority, and counsel | Resolve identity and signing authority before relying on a signature |
| Does the fence follow the boundary? | A suitable professional survey and title review | Compare the physical condition with the documents and objection terms |
| What does this crack mean? | An appropriately licensed inspector or qualified structural professional | Get the scoped evaluation and act on it before the contractual deadline |
| Is the planned use allowed? | The applicable local authority, governing restrictions and counsel | Describe the actual use; do not rely on the listing label |
| What condition information is required? | The applicable seller, lead and radon disclosures | Check coverage, timing, available records and inconsistencies |
| What does the condo association permit? | Declaration, bylaws, rules and applicable resale information | Check the intended use and unresolved document requests |
| What is the flood concern? | Official flood maps, local information and appropriate professionals | Check practical risk and insurance separately from the map label |
| Can this financing proceed? | The lender and its outstanding requirements | Track the financing clause; preapproval is not final closing approval |
| What protection does the contract provide? | The signed agreement and qualified legal review | Calendar the notice as well as the investigation |
| Has the task actually been completed? | The dated response, report, client instruction and delivery record | Record what remains open and who will follow up |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| A red flag and a diagnosis | A stair-step crack, stain, missing permit or inconsistent document gives a reason to investigate. Observing it does not establish its cause or turn the broker into the relevant specialist. | Describe what is observed, then obtain the appropriate scoped evaluation. |
| An investigation and a contingency | An inspection or document request gathers information. A contingency supplies particular contract conditions or rights. Its notice, delivery and timing requirements still need to be met. | A report arriving on time does not prove the required notice was delivered. |
| Client duties and a particular non-client disclosure duty | Section 15-15 includes a client duty about materially false information the licensee knew or should have known was false. Section 15-25 uses a different test for the seller-engaged licensee and prospective buyer customer: actually known latent material adverse physical facts not discoverable by a reasonably diligent inspection. Its client-provided-information protection also requires no actual knowledge of falsity. | Keep the role, knowledge test and physical-property conditions with the rule. |
| Seller disclosure and independent investigation | The covered seller report is based on actual knowledge under its statute, with coverage, exemptions and qualified protections. It is not an inspection or a condition warranty. An error, inaccuracy or omission discovered before closing can require a written supplement. | Do not turn a form into a guarantee or an excuse to ignore conflicting information. |
| Broker observation and a regulated home inspection | Illinois separately regulates home inspection and inspection reports. The definition concerns examination and evaluation of two or more listed components in connection with a proposed sale, lease or other conveyance. Direct or indirect compensation matters. Proper licensure is required unless an applicable statutory exemption supplies authority. | Renovation experience and a real estate license alone do not supply the separate credential. |
| Inspection scope and complete assurance | A home inspection has professional standards and a defined scope, including accessibility and reporting limits. An engineer, environmental specialist or other professional may be needed for a further issue. | Ask what was inspected, what was not and what follow-up the report recommends. |
| A CMA or BPO and an appraisal | Illinois permits compliant broker price opinions and comparative market analyses for specified purposes. They have written-report requirements and must not be presented as appraisals. The broker-product authority excludes use as the primary basis for determining market value for a financial institution's mortgage loan origination secured by the same real estate. | Keep all parts of that restriction; it is not a ban on every lender request. |
| Required report identity and a dual licensee's first page | Section 10-45 supplies the written broker-product requirements, including preparer identity and the statement that the product is not an appraisal. Section 1450.790 separately requires a person holding both the broker or managing-broker and appraiser credentials to identify the broker credential, rather than the appraiser credential, on the initial page of a BPO or CMA. A compliant label does not authorize a prohibited use. | Separate the report requirements from the extra first-page rule for a dual licensee. |
| Factual form completion and custom legal drafting | The narrow preliminary-form role recognized in Quinlan and Tyson does not authorize a broker to draft a deed, mortgage or custom indemnity, or decide uncertain legal rights. Using a familiar template or charging no separate fee does not resolve the authority question. | A new remedy or allocation of legal risk belongs with qualified Illinois counsel. |
| Planned blanks and later signed changes | Section 1450.775(a) prohibits obtaining a contract signature with the intention of filling blanks afterward. For later additions, deletions or alterations, subsection (b) requires written consent or direction from all signatories and each change signed or initialed by all at the time it is made. | Consent or direction is one requirement; signing or initialing the change is another. |
| Original signatures and corrected-copy delivery | Section 1450.775(c) requires a true copy of the original or corrected agreement for the person signing or initialing, within 24 hours after that person's original signing or initialing or correction. The rule covers physical and electronic documents. | Do not substitute closing day or the last party's signature for the signer-specific event. |
| Public permission and private restrictions | A zoning or permit response and a private covenant or association restriction address separate sources of authority. Check both for the actual proposed activity and the applicable property. | A residential label does not itself authorize a short-term rental. |
| Title, a survey and a public parcel map | Title materials concern ownership, rights and recorded issues. A suitable professional survey addresses location within its scope. A parcel map or listing sketch does not automatically settle a disputed boundary or create legal access. | Match the document and the professional to the question. |
| A trustee, a beneficiary and a direction holder | An Illinois land trustee holds legal and equitable title; the beneficiary's interest is personal property under the governing definition. The power of direction is a separate authority to direct specified trustee actions. | Read the actual authority documents; a claimed ownership percentage is not sufficient signing authority. |
| Condo developer offering and owner resale | Section 22 addresses initial offering information. Section 22.1 addresses the nondeveloper owner's resale information made available to a prospective purchaser upon demand. These are different requirements. | Identify the transaction before selecting the document list or a remedy. |
| Purchaser resale information and member records access | Section 22.1 resale information differs from Section 19 rights of association members, including access through an agent under its conditions. A prospective buyer does not automatically receive every association record merely by requesting a resale package. | Do not treat meeting minutes, private records and the statutory resale list as identical. |
| Condo information and what it actually establishes | Section 22.1 includes anticipated capital expenditures for the current or succeeding two fiscal years, reserve information including earmarking, the available last-fiscal-year financial statement, pending suits or judgments, and association-provided insurance information. Its good-faith statement about unit improvements concerns compliance with the condominium instruments, rather than government permit certification. | Read the exact subject and qualification; a master policy or good-faith statement is not a universal clearance. |
| A referral and completed brokerage follow-up | A specialist performs work within that professional's authority. The broker still needs to carry out the applicable brokerage duties, communicate accurately and track the agreed task and contract process. An unlicensed assistant's clerical help does not authorize negotiation, legal interpretation or another regulated service. | A scheduling confirmation is not a completed evaluation or a timely contract notice. |
| A map, an estimate and a promised outcome | An official flood map is a useful source, but lower mapped risk is not zero risk. A current tax bill, insurance quote or loan preapproval also has a limited purpose; it does not promise the future owner's final cost, coverage or closing. | Name the source, its date and its limits. |
| A real concern and a required disclosure | Not every concern uses the same legal test. Follow up on a visible crack without pretending it meets a rule expressly limited to latent facts. Keep client confidentiality and legally required disclosure duties distinct. | Avoid both a universal disclosure promise and a blanket confidentiality excuse. |
| Electronic receipt and a person reading the message | Under the Illinois electronic-transactions default, receipt can occur in the designated or used system when the record is retrievable and processable, without the individual yet being aware of it. The agreement, known-failure provision and other applicable law matter. That default does not settle every notice clause, acceptance or formation question. | Distinguish system receipt from awareness, and check the actual governing terms. |
Work through the facts
A residential listing does not approve a rental business
A buyer plans short-term rentals. An old listing describes the property as residential, and the broker promises the use is allowed.
- Identify the actual activity, location and current requirements.
- Check applicable public controls and private restrictions separately.
- An old listing is not the local authority's current determination or a legal opinion.
Answer: Withdraw the unsupported assurance, obtain the appropriate current information and legal review, and track the buyer's contract deadline.
A visible crack needs an appropriate evaluation
At a showing, a buyer asks whether a stair-step crack means foundation failure. The broker has renovated several homes but has no separate inspection or engineering authority.
- Describe the visible condition without assigning a cause.
- Renovation experience does not establish the relevant professional authority.
- Arrange the appropriate evaluation and allow time for any needed specialist and contract notice.
Answer: Treat the crack as a red flag, avoid a structural diagnosis and follow up within the actual contract process.
An environmental indemnity needs legal drafting
A buyer asks the broker to write a detailed indemnity covering unresolved contamination.
- The proposed clause would allocate legal risk and remedies.
- Simple factual completion of a customary preliminary form is a narrower task.
- The contamination also requires the appropriate technical evaluation.
Answer: Refer the custom clause to an Illinois attorney and the technical issue to the appropriate environmental professional, while tracking the transaction.
A timely report and a late notice are different events
The inspection report arrives during the inspection period. The broker discusses it with the buyer but does not send the notice the contract requires until after the deadline.
- Receiving a report completes one task.
- The notice may require particular content, delivery, recipient and timing.
- Do not assume a report delivery or conversation substitutes for the contractual notice.
Answer: Calendar the investigation and notice separately. Obtain prompt legal review of the actual rights and options rather than promising an automatic cancellation or extension.
A general rule for current condo resale requests
A nondeveloper owner is reselling a condominium. The prospective purchaser demands the Section 22.1 information, and the designated board officer receives the owner's written request.
- Use Section 22.1 rather than assuming every initial developer-offering rule applies.
- The officer's statutory response period is 10 business days for the written request, not 10 calendar days.
- Separate this response period from any contract document-review or notice deadline.
Answer: Request and track the applicable resale information, then review it under the actual transaction terms. Do not promise that the statute extends the contract deadline.
A buyer wants every association minute
A prospective condo purchaser asks the broker to promise access to every minute, personnel file and owner record as part of the resale package.
- Section 22.1 identifies the resale information.
- Section 19 addresses member records rights with its own conditions and exceptions.
- A purchaser's request alone does not make every association record automatically available.
Answer: Identify the documents actually required and available, seek appropriate additional information and obtain counsel's help with unresolved access questions.
A signed correction also needs a true copy
Assume the rule's authorization and all-signatory requirements are satisfied. A signer makes and initials a contract correction Wednesday, October 28, 2026 at 2 p.m. What is 24 hours later?
- Start from that signer's correction, rather than waiting for closing.
- Adding 24 ordinary hours gives Thursday, October 29 at 2 p.m.
- The rule requires the true corrected copy for the person signing or initialing.
- This example does not resolve a disputed holiday, weekend, daylight-saving or private notice clause.
Answer: Thursday, October 29, 2026 at 2 p.m. is the ordinary 24-hour point for the stated correction.
A second license changes the role question
A real estate broker is also properly licensed for an inspection service and is asked to perform that service.
- A real estate license alone does not authorize regulated inspection.
- A separate valid credential can matter; saying no broker may ever inspect is too broad.
- The actual assignment still needs the applicable scope, professional duties, disclosures and safeguards.
Answer: Evaluate authority under the separate professional role. A second license does not erase the rules for either service.
A condo improvement statement is not a building permit
A resale statement says the unit improvements are in good faith believed to comply with the condominium instruments. The buyer asks whether that proves a remodeled room has every required government approval.
- Identify exactly what the statement addresses: the condominium instruments.
- The good-faith qualification remains part of that statement.
- Public permits, code requirements and private association approval are different matters.
- Follow up with the appropriate records, authority and counsel rather than expanding the statement into a guarantee.
Answer: No. Obtain the appropriate public-approval information and any needed professional review; the qualified condominium statement is not government permit certification.
Electronic receipt is not necessarily the reading time
For the receipt issue only, assume the Illinois default applies without an altering agreement or known transmission failure. A record enters the recipient's designated or used system in retrievable, processable form Wednesday, October 28, 2026 at 4 p.m. The person reads it Thursday morning.
- The scenario supplies the default receipt conditions.
- Individual awareness is not necessary under that default.
- Receipt and the person's later reading are therefore different events.
- This example does not approve a particular contract notice, determine acceptance or calculate an unstated response period.
Answer: Under the stipulated default, receipt occurs Wednesday at 4 p.m., rather than waiting for the Thursday reading.
Mistakes to avoid
- The broker must personally solve every issue. Coordinate the appropriate sources and professionals while carrying out the brokerage duties.
- A completed disclosure guarantees the property. Disclosure and inspection have different purposes, scope and knowledge conditions.
- A free report avoids inspection licensing. The definition includes indirect compensation. Do not invent a loophole from the absence of a separate fee.
- A CMA becomes an appraisal if the comparables are good. Use the permitted product, purpose, identity and report requirements. A label cannot supply missing authority.
- An attorney-review clause lets the broker draft any remedy. The clause does not confer authority to practice law.
- Everyone expected a blank to be completed later. The planned-after-signature blank prohibition still applies. Later changes have separate requirements.
- A board officer always has 10 calendar days. Section 22.1 specifies 10 business days for its written request. Do not transfer that clock to every contract or records issue.
- The new condo collection-policy copy is already an October requirement. The identified Public Act 104-0734 amendment takes effect January 1, 2027.
- A referral or disclaimer cures an unsupported promise. Communicate accurately, track the agreed next step and preserve required notices.
- A practice percentage proves exam readiness. Explain the rule and try changed facts. These questions are teaching material, not a validated pass prediction.
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 wants to run a business from the property. What is the sound first approach?
- Ask the photographer to approve the use
- Promise permission because the listing says residential
- Assume zoning never changes
- Describe the actual use and obtain the appropriate current public, private-restriction and legal information
Show answer and explanation
Answer: D. Describe the actual use and obtain the appropriate current public, private-restriction and legal information
The proposed activity matters. A residential label alone does not resolve zoning, other applicable approvals or private restrictions. Track the decision and contract deadline.
2. Which service requires the separate inspection authority, assuming no statutory exemption applies?
- Calendaring the inspection deadline
- Performing the regulated compensated home inspection and issuing its report
- Sharing an existing seller disclosure
- Arranging access
Show answer and explanation
Answer: B. Performing the regulated compensated home inspection and issuing its report
Illinois separately regulates home inspection and inspection reports. Direct or indirect compensation can matter; ordinary scheduling and factual document sharing are different tasks.
3. How should a compliant broker CMA be described?
- A certified appraisal merely because it uses comparables
- A broker analysis that is not an appraisal
- A title policy
- A guaranteed sale price
Show answer and explanation
Answer: B. A broker analysis that is not an appraisal
The authorized broker product has its own permitted uses and reporting requirements. Better comparables do not turn it into an appraisal or guarantee a price.
4. A buyer needs a custom clause allocating environmental liability. Who should draft the legal language?
- The photographer
- Qualified Illinois counsel
- The showing scheduler
- An unlicensed assistant
Show answer and explanation
Answer: B. Qualified Illinois counsel
A custom indemnity creates and allocates legal rights and risk. The narrow factual preliminary-form role does not authorize that legal drafting.
5. Which checklist entry is most useful?
- Remove professional referrals to save time
- Inspection: checked, with no source or date
- A question linked to a responsible person, source, deadline, required action and saved response
- Use the same unchecked list for every property
Show answer and explanation
Answer: C. A question linked to a responsible person, source, deadline, required action and saved response
The entry should support an actual decision and the contract process. A check mark alone does not establish the answer, notice or completion.
6. A stair-step crack is visible. The broker has no separate structural authority. What is the sound response?
- Describe the observation and arrange an appropriate professional evaluation
- Ignore it because it is visible
- Diagnose foundation failure from experience
- Promise it is cosmetic
Show answer and explanation
Answer: A. Describe the observation and arrange an appropriate professional evaluation
A red flag calls for follow-up. Visibility does not justify ignoring the concern, and brokerage experience alone does not authorize a structural diagnosis.
7. A report arrives before the inspection deadline. What must still be checked?
- Whether the broker likes the inspector
- Only the report filename
- Nothing; every report automatically cancels the contract
- Whether all contractual notice and other required steps are satisfied
Show answer and explanation
Answer: D. Whether all contractual notice and other required steps are satisfied
The report and the contract notice are distinct. Content, delivery, recipient and timing can control whether a contractual right is properly exercised.
8. May a broker obtain signatures intending to fill the contract blanks afterward?
- Yes, if that was informally expected
- Yes, if closing is nearby
- Yes, if the document is electronic
- No; Section 1450.775(a) prohibits that planned practice
Show answer and explanation
Answer: D. No; Section 1450.775(a) prohibits that planned practice
The planned-after-signature blank prohibition is separate from the rule for later authorized changes. Electronic format does not remove it.
9. For a later signed-contract change, what does Section 1450.775(b) require?
- Only one party's verbal approval
- Both written consent and a separate direction from one broker only
- Written consent or direction from all signatories, and the change signed or initialed by all at the time it is made
- An unsigned revised page at closing
Show answer and explanation
Answer: C. Written consent or direction from all signatories, and the change signed or initialed by all at the time it is made
Keep the alternatives and the separate requirements: written consent OR direction from ALL, plus each change signed OR initialed by ALL AT THE TIME. That is not a planned-blank exception.
10. Which event is relevant to Section 1450.775(c) corrected-copy delivery?
- Only recording the deed
- The person's original signing or initialing, or correction, as applicable
- The broker's next marketing meeting
- Only closing
Show answer and explanation
Answer: B. The person's original signing or initialing, or correction, as applicable
A true original or corrected copy is due to the person signing or initialing within 24 hours after the relevant signing, initialing or correction. It is not a universal closing-day rule.
11. Under the stated ordinary-hours example, a signer initials a correction October 28, 2026 at 2 p.m. What is 24 hours later?
- November 1 at noon
- October 28 at 4 p.m.
- October 29 at 2 p.m.
- October 30 at 2 p.m.
Show answer and explanation
Answer: C. October 29 at 2 p.m.
Adding 24 ordinary hours gives October 29 at 2 p.m. The example does not decide a holiday, weekend, daylight-saving or different contractual notice question.
12. A nondeveloper owner resells a condominium. Which section specifically supplies the resale information made available upon demand?
- Only the developer's initial-offering Section 22
- Section 22.1
- Every personnel-file provision automatically
- No statute can be relevant
Show answer and explanation
Answer: B. Section 22.1
Section 22.1 addresses this nondeveloper-owner resale. Identify the transaction before selecting a document list or importing another section's remedy.
13. Section 22.1 gives the designated officer what response period for the written information request?
- One year
- 10 business days
- 72 hours for every request
- 10 calendar days
Show answer and explanation
Answer: B. 10 business days
The ordinary statutory response period is 10 BUSINESS days. A paid expedited option and the contract's separate review or notice period are different matters.
14. What follows merely from a prospective buyer demanding the Section 22.1 package?
- The specified resale information is relevant; Section 19 member access has separate conditions
- Automatic approval of all unit improvements
- Automatic waiver of the seller's contract
- Automatic access to every personnel and owner file
Show answer and explanation
Answer: A. The specified resale information is relevant; Section 19 member access has separate conditions
Purchaser resale information and member records-access rights are not identical. Section 19 also contains conditions and exceptions.
15. The new collection-policy copy added by Public Act 104-0734 is effective January 1, 2027. Is that addition already an October 28, 2026 requirement?
- No; keep the future addition separate from the current package
- Yes, if a listing mentions it
- Yes, because enactment always means immediate effectiveness
- It repeals all current association duties
Show answer and explanation
Answer: A. No; keep the future addition separate from the current package
The effective date controls this future addition. Existing October duties remain; separating the dates is not permission to ignore current law.
16. For Section 15-25's particular seller-licensee physical-fact duty, which knowledge test belongs in the rule?
- Actually known, with the other statutory conditions
- Only rumors on social media
- Every possibility the broker can imagine
- Whatever a buyer guarantees
Show answer and explanation
Answer: A. Actually known, with the other statutory conditions
The seller-licensee/customer rule addresses actually known latent material adverse physical facts not discoverable by a reasonably diligent inspection. Do not substitute the different client-duty knew-or-should-have-known wording.
17. A seller learns before closing that the previously delivered covered disclosure report omitted a known condition. What should be considered?
- Automatic destruction of the earlier report
- Only a silent change to the listing
- A universal rule that no update can be needed
- The written-supplement requirement under Section 30
Show answer and explanation
Answer: D. The written-supplement requirement under Section 30
The statute addresses awareness before closing of an error, inaccuracy or omission in the report or supplement. Apply the required written supplement and delivery rules; this does not itself decide every contract remedy.
18. Does Illinois Radon Awareness Act Section 10 itself require every seller to test or mitigate?
- Yes, always
- It bans all voluntary testing
- Yes, if the broker prefers it
- No; its disclosure framework does not itself impose that testing or mitigation mandate
Show answer and explanation
Answer: D. No; its disclosure framework does not itself impose that testing or mitigation mandate
Section 10 supplies disclosure duties without itself requiring testing or mitigation. Applicable other law, the actual contract and professional authority remain separate.
19. An official flood map puts the home outside the high-risk area. What is the sound conclusion?
- Flooding is impossible
- No other source can be relevant
- Lower mapped risk is not zero risk; follow up on property-specific concerns
- Insurance coverage is guaranteed free
Show answer and explanation
Answer: C. Lower mapped risk is not zero risk; follow up on property-specific concerns
Map classification is useful information, not a guarantee against all flooding. Practical conditions, appropriate professional information and insurance questions remain.
20. An Illinois land-trust beneficiary claims a percentage interest. Does that fact alone establish authority to convey title?
- Yes, if the beneficiary speaks confidently
- A parcel map alone decides it
- No; check the trustee, direction authority and actual governing documents
- Yes, any percentage permits a deed
Show answer and explanation
Answer: C. No; check the trustee, direction authority and actual governing documents
Land-trust title, the beneficiary's personal-property interest and direction authority are distinct. The actual authority documents and legal review matter.
21. Does charging no separate inspection fee automatically remove the licensing concern?
- Yes, indirect compensation never matters
- No; the definition includes direct or indirect compensation
- Yes, if the broker calls it friendly advice
- Yes, whenever two components are examined
Show answer and explanation
Answer: B. No; the definition includes direct or indirect compensation
A separate invoice is not the only possible compensation. Apply the statutory activity, compensation and exemption conditions rather than inventing a free-report loophole.
22. A broker also holds the proper credential for a separate regulated service. Which statement is sound?
- Evaluate the separate credential, scope and applicable duties for the actual assignment
- No broker can ever provide another regulated service
- The extra credential erases all professional duties
- The real estate license alone was always sufficient
Show answer and explanation
Answer: A. Evaluate the separate credential, scope and applicable duties for the actual assignment
A valid separate credential can change the authority analysis. It does not remove the separate service rules, conflicts, scope or brokerage obligations.
23. A broker BPO would be the primary basis for market value in a financial institution's mortgage origination secured by the same property. Does Section 10-45 authorize that use?
- No; the provision expressly excludes that use
- Yes, if the analysis is emailed
- Yes, a disclaimer cures it
- Yes, every bank request is allowed
Show answer and explanation
Answer: A. No; the provision expressly excludes that use
Keep all the conditions in this restriction. It concerns the primary market-value basis for the specified secured mortgage origination, rather than a ban on every valuation requested by a lender.
24. An assistant schedules a specialist visit. What does that establish by itself?
- Only that the visit was scheduled
- The specialist's evaluation and all contract notices are complete
- The assistant may now negotiate repairs
- The buyer must waive the contingency
Show answer and explanation
Answer: A. Only that the visit was scheduled
Clerical coordination is not a completed evaluation, negotiation authority or contract notice. Applicable supervision and task limits remain.
25. What period does Section 22.1 specify for anticipated capital-expenditure information?
- Only the next two calendar years
- Only the month before closing
- The current or succeeding two fiscal years
- Every future expense forever
Show answer and explanation
Answer: C. The current or succeeding two fiscal years
Preserve both the current year and the fiscal-year unit. This is specified information about anticipated expenditures, not a guarantee that no other expense can ever arise.
26. The condo resale improvement statement supplies a good-faith belief about what?
- The buyer's guaranteed loan eligibility
- Compliance with the condominium instruments
- The buyer's future insurance premium
- Every government permit and code approval
Show answer and explanation
Answer: B. Compliance with the condominium instruments
The statute addresses a qualified good-faith belief concerning the condominium instruments. Public permits and code compliance need their own appropriate inquiry.
27. A dual broker-and-appraiser licensee prepares a BPO under the broker authority. Which credential belongs on its initial page under Section 1450.790?
- Only the client's license number
- No identity if the client knows the person
- Only the appraiser credential
- The broker or managing-broker name and license number, rather than the appraiser credential
Show answer and explanation
Answer: D. The broker or managing-broker name and license number, rather than the appraiser credential
The initial-page rule specifically addresses this dual-license situation. All applicable written-report identity and other contents remain required, and the correct identity does not cure a prohibited use.
28. Under the expressly stipulated Illinois electronic-receipt default, a retrievable and processable record enters the designated or used system Wednesday afternoon. The recipient reads it Thursday. What is sound?
- Every email automatically forms a contract
- Receipt can occur Wednesday without individual awareness
- All notice clauses are waived
- Receipt always waits for human reading
Show answer and explanation
Answer: B. Receipt can occur Wednesday without individual awareness
The default receipt rule does not require individual awareness. The scenario assumes no altering agreement or known failure; other law, actual contract notice terms and formation issues remain separate.
Common questions
What is due diligence in an Illinois real estate transaction?
It is the organized investigation of the property, parties and transaction to support a decision before the relevant deadline. The work depends on the property, intended use, documents, location, financing and contract. Start with a question and connect it to the right source, responsible person, action and saved response.
How is due diligence tested on the Illinois broker exam?
PSI lists it in National X.C.3. The whole Practice of Real Estate area receives 12% of the 100 scored national broker questions, or 12 questions. That allocation is for the whole area, not 12 due-diligence questions. Illinois law adds duties that need their own role and coverage analysis.
Must a broker personally investigate and guarantee every fact?
No universal guarantee follows from due diligence. Carry out the applicable brokerage duties, communicate accurately, follow up on red flags and obtain the appropriate professional help. Client duties and the particular seller-licensee duty to a non-client have different knowledge and disclosure conditions. A disclaimer does not make a knowingly false statement proper.
What should a buyer investigate before a deadline?
Start with the actual decision: authority to sign, title and location, condition, intended use, required disclosures, association restrictions, financing, insurance or costs. Read the contract for the investigation and notice requirements. A broad checklist is a starting point; not every property requires the same reports, and not every task creates a cancellation right.
May an Illinois broker explain or complete a contract form?
The narrow customary preliminary-form role recognized in Quinlan and Tyson concerns appropriate simple factual completion in the brokerage function. It does not authorize custom legal drafting, deeds, mortgages or opinions about uncertain rights. The actual work matters. An attorney-review clause or the absence of a separate fee does not turn a custom legal remedy into ordinary factual entry.
Can a broker leave contract blanks to fill after signing?
Section 1450.775(a) prohibits obtaining signatures with that intention. For later additions, deletions or alterations, subsection (b) requires written consent or direction from all signatories, with each change signed or initialed by all when made. These are distinct protections. The rule also covers electronic documents.
When is a true copy of an agreement or correction due?
Section 1450.775(c) requires the person signing or initialing to receive a true copy of the original or corrected agreement within 24 hours after that person's original signing or initialing or correction. Do not wait for closing or assume every person's clock starts with the last signature. A particular contract's notice clause is a separate issue.
Can a real estate broker perform a home inspection?
A real estate license alone is insufficient authority for a regulated Illinois home inspection or report. The Home Inspector License Act has its own licensing requirement and statutory exceptions. Its definitions include direct or indirect compensation, so an absence of a separate inspection fee is not a universal exception. A separately qualified person must still meet the requirements of the actual professional role.
Is a home inspection the same as an appraisal?
No. An inspection examines condition within its scope. An appraisal addresses value under its governing requirements. A broker CMA or BPO is another product with its own authorized purposes, identity and report requirements. None of those labels guarantees the property or makes the other service unnecessary.
Does receiving an inspection report preserve the inspection contingency?
Not by itself. Read the actual agreement for what must happen after the investigation, including notice content, delivery, recipient and timing. A report can arrive on time while the notice is late. An extension or cancellation right must have a proper basis; do not assume either happens automatically.
Which documents apply to a condominium resale?
For a nondeveloper owner's resale, Section 22.1 identifies information the owner obtains from the board and makes available to the prospective purchaser upon demand. It includes governing documents and specified assessment, expenditure, reserve, financial, litigation, insurance and improvement information. Section 22 initial-offering requirements and Section 19 member records-access rights are separate.
How long does the board officer have under Section 22.1?
The designated officer must furnish the specified information within 10 business days after the written request. Do not substitute calendar days or treat that period as the contract's document-review deadline. The statute also addresses an additional expedited-service option; it does not make every ordinary request a 72-hour request.
Does a condo resale package automatically include every meeting minute?
No automatic all-records right follows from that request. Section 22.1 and Section 19 serve different purposes. Section 19 governs member access, including through an agent, with particular conditions and exceptions. Identify what is required, what additional information is available and whether counsel needs to address an unresolved request.
Is the new condo collection-policy copy required in October 2026?
The identified Public Act 104-0734 addition to Section 22.1 is effective January 1, 2027. Keep it separate from the package required in October 2026. This future change does not erase existing disclosure, governing-document or contract duties.
Does residential zoning approve a short-term rental?
Not by the label alone. Describe the actual proposed activity and check the applicable current public requirements and private restrictions. A local approval and a covenant or association restriction address different authority. Obtain the appropriate written information and legal advice before relying on the intended use.
Where should a buyer start with flood maps?
The USGS identifies FEMA as the official public source for insurance flood maps, including the Map Service Center. An official map answers a mapped-classification question, not every property-specific flooding or insurance question. Lower mapped risk is not zero risk. Follow up with appropriate local, survey and insurance information.
Do seller, lead and radon disclosures replace inspections?
No. Each disclosure system has coverage, timing and information requirements. A covered Illinois seller report is based on its actual-knowledge framework, with exemptions and qualified protections. Federal lead disclosures and Illinois radon disclosures have separate rules. Receiving a form does not certify the condition or replace the appropriate investigation.
Are these official questions or a way to predict my score?
No. These are original teaching scenarios grounded in the published outline and identified sources. Explain the governing condition and try changed facts rather than memorizing a letter. Repeated practice percentages do not validate exam readiness. The optional app offers another way to practise; Property Ownership practice is free and full access is paid.
Is the Illinois condo resale-document fee always $375?
Do not quote $375 as an unqualified current October 2026 cap. Section 22.1 specifies a $375 base subject to annual CPI increases or decreases. The actual applicable indexed limit needs its own verification. The section also permits an additional $100 for rush service completed within 72 hours. That qualified option is different from the ordinary 10-business-day response requirement.
This guide does not calculate an unsupported 2026 indexed amount or promise that every requested document has the same fee. Identify the actual request, service and statutory conditions.
What do the condo reserve, insurance and improvement statements mean?
Read their subjects and limits. Section 22.1 addresses reserve status, including amounts earmarked for specified projects; anticipated capital expenditures for the current or succeeding two fiscal years; the available financial statement for the last fiscal year; pending suits or judgments; and association-provided insurance coverage. A reserve balance is not a promise that no special assessment will occur.
The qualified good-faith belief about unit improvements concerns the condominium instruments. It does not certify every government permit, building-code issue, insurance need or lender requirement. Obtain the further information needed for the buyer's actual decision.
Does an unread email count as received?
It can under the Illinois electronic-transactions default when the record enters the designated or used system in retrievable, processable form; individual awareness is not necessary. The agreement and the statute's other qualifications matter, including the known-failure provision. Do not convert that default into a rule that every sent email satisfies every notice clause, forms a contract or starts every deadline.
Is the federal lead inspection opportunity the same as an Illinois radon testing requirement?
No. For a covered sale under the federal lead rule, the purchaser generally receives a 10-day opportunity for the specified lead inspection or risk assessment before becoming obligated, unless the parties mutually agree in writing to a different period or the buyer waives the opportunity in writing. Coverage, exemptions, disclosures and available records still need the separate rule. The opportunity is not a universal testing mandate.
Illinois Radon Awareness Act Section 10 has its own disclosure framework and does not itself require testing or mitigation. Other applicable law and the contract may matter. Neither disclosure system turns a broker into a licensed technical evaluator or proves the property safe.
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Official sources and scope
Sources reviewed through October 28, 2026. PSI establishes the exam scope; the identified Illinois statutes, adopted rules, court opinion and agency materials support the specific distinctions. Earlier actual primary readings are reused where recorded. The January 1, 2027 condominium amendment is identified as future law. This guide does not evaluate a particular property, approve a contract or supply a full legal, inspection, title or insurance review.
- PSI June24,2026: NationalX, Practice of Real Estate
- 225 ILCS 454/15-15: client duties
- 225 ILCS 454/15-25: the specific seller-licensee customer duty
- 225 ILCS 454/15-30: duties after the engagement
- 68 Ill. Adm. Code 1450.775: signed documents and true copies
- Quinlan and Tyson, 34 Ill. 2d 116 (1966), majority pages 120-123: narrow preliminary-form role; opinion reproduced by Justia
- 815 ILCS 333/15: electronic sending and receipt
- 225 ILCS441/1-10: home-inspection definitions
- 225 ILCS441 Article10: standards and record provisions
- 68 Ill. Adm. Code1410: current official indexed standards
- 68 Ill. Adm. Code1410.250: report identity and consent
- CFPB: schedule an independent home inspection
- Public Act104-0746: selected Home Inspector Act amendments
- SB3897: enacted Public Act104-0746 and effective date
- 225 ILCS 454/10-45: permitted uses and complete written-report contents
- 68 Ill. Adm. Code 1450.790: dual-license identity and deficient reports
- 225 ILCS 458/5-5: appraisal licensing and selected exceptions
- 68 Ill. Adm. Code 1450.740: assistant tasks, approvals, pay and responsibility
- Standlee v. Bostedt, 2019 IL App (2d) 180325: instruments, enforcement and a promised variance process
- USGS: where to find official flood maps
- NFIP FloodSmart: flood risk remains outside high-risk areas
- 765 ILCS 77/5: covered property and seller definitions
- 765 ILCS 77/15: nine seller-transfer exemptions
- 765 ILCS 77/25: actual knowledge and qualified seller protection
- 765 ILCS 77/30: written preclosing supplement
- Current 40 CFR Part 745 Subpart F: lead disclosure, exemptions, documentation and agent duties
- EPA real-estate disclosures guidance, May 27, 2026
- 420 ILCS 46/10: statutory sale form and disclosure timing
- 68 IAC 1270.56: professional surveying standards and scope
- Public Act 104-0734: January 1, 2027 effective date
- 765 ILCS405/1: land-trust title and personal-property interest
- 765 ILCS435/10: power-of-direction holder
- 225 ILCS441/5-5: inspection licensing and statutory exceptions
- 765 ILCS605/22: initial condominium offering disclosures
- 765 ILCS605/22.1: current resale package and future amendment
- 765 ILCS605/19: member access differs from purchaser resale disclosure
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.