State: Illinois | Category: Real Estate | All tests in this Category:
Practice Test 1 Practice Test 21. The cost approach is most appropriate for valuing:
The cost approach works best for new or unique properties where comparable sales are limited. Older homes may have significant depreciation, making other approaches more reliable.
2. Which of the following is true about releasing a lien after payment in Illinois?
After payment, the lienor should issue a lien release (or satisfaction) to remove the lien from title.
3. Which document itemizes the buyer's and seller's debits and credits and is used to finalize the closing financials in Illinois?
The Settlement Statement (HUD-1 or equivalent) lists all charges and credits; in Illinois, it's used to ensure both parties agree on costs at closing.
4. In Illinois, which standard is commonly used to regulate life-safety and egress provisions in the building codes?
The IBC references NFPA 101 Life Safety Code for life-safety and egress provisions; jurisdictions enforce these standards through local amendments and interpretations.
5. Effective gross income is calculated by:
Effective gross income = potential gross income – vacancy and collection losses, representing the actual expected income from the property.
6. Which of the following best describes the difference between a life estate and a fee simple estate in Illinois practice?
A life estate is limited by the life of a measuring person, whereas a fee simple can last indefinitely and pass by inheritance.
7. What does a zoning map show?
A zoning map delineates the geographic boundaries of zoning districts (e.g., residential, commercial, industrial), which helps determine what uses are allowed where.
8. In Illinois, a residential lease that is on a month-to-month basis can be terminated by either party with how many days' written notice?
Illinois law generally requires 30 days' written notice to terminate a month-to-month tenancy by either party.
9. In Illinois, the process of appealing a property assessment usually begins with:
The typical first step for contesting an assessment is to file an appeal with the County Board of Review.
10. Which loan is paid first in a foreclosure sale?
In foreclosure, loans are paid in order of priority. The first trust deed (senior loan) is paid before junior liens or second trust deeds.
11. When a licensee acts on behalf of a principal in Illinois, the contract is binding if:
A contract is binding when the principal has authorized the agent to act, and the agent's actions fall within that authority.
12. Private mortgage insurance (PMI) protects the lender against:
PMI provides financial protection to lenders if a borrower defaults on a mortgage with a low down payment.
13. The tax rate applied to a property's EAV to determine the tax bill in Illinois is set by:
Tax rates are determined by local taxing districts (such as school districts, municipalities) through levies and are applied to the EAV to calculate the bill.
14. Are landlords in Illinois allowed to lock tenants out or shut off utilities to force eviction without a court order?
Lockouts or shutting off utilities to force eviction is illegal self-help in Illinois; eviction must be pursued through the courts.
15. Which adjustment is made when a comparable property is smaller than the subject?
If a comparable is smaller than the subject, its price is increased to make it comparable to the subject property.
16. A junior mortgage is usually:
A junior mortgage is secondary to the primary mortgage and is repaid after the first lien in case of default.
17. Which Illinois lease type is created when a lease ends and the landlord accepts rent for an ongoing period, producing a periodic tenancy?
A periodic tenancy is created when there is no fixed end date and rent is paid and accepted on a periodic basis (e.g., month-to-month).
18. Which of the following is primarily a residential mortgage lender in the U.S.?
Savings and loan associations (S&Ls) historically focus on residential mortgages, whereas commercial banks have broader lending portfolios.
19. Under Illinois law, a contract that cannot be performed within one year from its making must be:
The one-year rule is part of the Statute of Frauds. If the contract cannot be performed within one year, it must be in writing to be enforceable.
20. Which statement correctly describes designated agency in Illinois?
Designated agency allows two licensees within the same brokerage to represent different clients in the same transaction, preserving separate duties to each client.
21. A property’s highest and best use is defined as:
Highest and best use refers to the use that is legally permissible, physically possible, financially feasible, and most productive, producing the maximum value for the property.