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IL Real Estate Broker PSI Practice Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified
What is the main function of a real estate broker?✔✔A real estate broker acts as an intermediary between buyers and sellers, assisting with negotiations and facilitating transactions.
What is the purpose of an earnest money deposit in a real estate transaction?✔✔An earnest money deposit shows the buyer's good faith and commitment to the purchase, often held in escrow until closing.
What does the term "closing costs" refer to?✔✔Closing costs are fees associated with the finalization of a real estate transaction, including title insurance, appraisal fees, and lender charges.
What is the difference between a real estate broker and a real estate agent?✔✔A real estate broker has a higher level of licensing and can own a real estate firm, while an agent works under a broker’s supervision.
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What does the term "dual agency" mean in real estate?✔✔Dual agency occurs when a real estate broker represents both the buyer and the seller in the same transaction.
What is a “listing agreement” in real estate?✔✔A listing agreement is a contract between a property owner and a broker, authorizing the broker to sell the property on the owner’s behalf.
What is the definition of "market value" in real estate?✔✔Market value is the most probable price a property would sell for in a competitive and open market.
What is the purpose of title insurance in a real estate transaction?✔✔Title insurance protects the buyer and lender from potential defects in the title or ownership disputes after closing.
What does the term “deed of trust” refer to?✔✔A deed of trust is a legal document used to secure a loan on real property, involving a third- party trustee. 2 / 3
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What is a "purchase agreement" in real estate?✔✔A purchase agreement is a written contract between a buyer and a seller outlining the terms and conditions of the sale of a property.
What is the purpose of an appraisal in a real estate transaction?✔✔An appraisal is used to determine the fair market value of a property, typically required by lenders before approving a mortgage loan.
What does "escrow" mean in real estate?✔✔Escrow refers to a neutral third-party account where funds or documents are held until certain conditions of a real estate transaction are met.
What is a “seller’s disclosure” in real estate?✔✔A seller's disclosure is a document provided by the seller to inform the buyer of known issues or defects with the property.
What is a "contingency" in a real estate contract?
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