INFORMATION ABOUT THE STATE
REAL ESTATE BROKER EXAM
AMP provides a candidate’s handbook that contains your exam application. It is available through your school or the real estate commission and provides you with specific information regarding your own state exam. It is also available at www.goamp.com. Please read it carefully. This guide was written to be a streamlined review of the material presented in the classroom. More in-depth information about each subject is contained in the textbook.
The handbook can be found at www.goamp.com
Allocations of State Real Estate Broker Exam Questions by Chapter
The following table provides the number of questions in the State Real Estate Broker Exam allotted to various chapters in this book. There are two sections on the Illinois State Exam for Real Estate Brokers
Number of Questions
Chapter in the Book
The exam will include 5 pretest questions in the National portion and 5 pretest questions in the State portion that do not count toward your score.
EFFECTIVE LEARNING METHODS UTILIZING THIS ON-LINE BOOK
Bold Type — Take Notes
Key information is highlighted in bold type. As a key learning tool, write these items down in your personal learning notebook.
Underlined Bold Type — Highlight Notes
Underlined and bold items are likely to be subjects of questions in the State Exam. Highlight these items in your personal learning notebook. Spend time at each chapter making sure that you understand these concepts.
Bold and Underlined Bold Information — Say Aloud
It is a fact that in addition to seeing the information on your screen, writing down notes, and hearing the material (your own voice is fine) enhances learning and memory.
The more senses you involve in learning, the better you will learn the material and you will retain it longer.
Utilizing three senses — visual, aural and touch, will guarantee that you are maximizing your learning experience. Faithfully following these learning procedures will enable you to pass the Illinois Real Estate Broker Exam.
- Read the chapter quickly, to see what is being covered.
- Read over the chapter slowly, taking notes and speaking key sentences and phrases out loud, so you can hear them.
- Look up any words you don’t understand in the glossary at the back of the book.
- Review the concept list to make sure that you understand each of them.
- Review the Study Points for the State Exam at the end of each chapter.
- Re-read the sections of the chapter that pertains to any concept or State Study Point that you cannot remember or that you don’t quite understand.
- Take the exam at the end of each chapter.
- Mark the questions down on your notes that you got wrong. (You will be studying this material again at the end of the course and re-taking the test to make sure that you get them right at that time.)
- Proceed to the next chapter.
OTHER STUDY TIPS
- Ask friends and family to allow you some space and privacy to study this material. It will take a commitment from you and them to find time and privacy to study.
- Make a commitment and stick with it. It is not easy to take an on-line course. Too many distractions will take you away from the work you need to put in to obtain your goal – a Real Estate Broker’s License. In fact, make out a little sign with your goal of completing this course and obtaining your license and mount it within eyesight where you study or someplace where you can see it each night. The sign should read “Real Estate Broker’s License by July 20” or whatever date that might be your goal.
- Although some teens can study with the TV blasting or listening to ear-achingly loud music, for most people, especially those out of their teens, learning and retention require a quiet space to concentrate on the material to be mastered. You may need to study in a library, the basement, the attic, a Starbucks that is not noisy, or some other quiet and subdued place out of your home.
TESTING KNOWLEDGE THROUGH QUESTIONS
Taking in the information, understanding it and remembering it, is only part of what you have to do to prepare for the State Real Estate Exam. You also have to have some experience how the state will test this knowledge. They will test your knowledge through QUESTIONS.
The material you learn will be re-worked by a test developer, to come at the knowledge from several different angles. Some students will be able to anticipate these twists and turns, others cannot.
THE BEST WAY TO GAIN A SKILL AT ANTICIPATING HOW THE BASIC MATERIAL YOU LEARN WILL BE PRESENTED IN A DIFFERENT MANNER IN QUESTIONS IS TO PRACTICE ANSWERING QUESTIONS ABOUT THE MATERIAL YOU HAVE LEARNED. THE MORE QUESTIONS YOU TRY TO ANSWER, THE BETTER YOU WILL BE ABLE TO ANSWER THEM IN THE STATE EXAM.
SO, ANSWER THE QUESTIONS AT THE END OF EACH CHAPTER AFTER YOU HAVE STUDIED IT AND TAKE THE PRACTICE EXAMS AT THE END OF THE BOOK BERFORE TAKING THE REAL ESTATE EXAM.
ALSO, IT IS RECOMMENDED THAT YOU TAKE THE AMP TEST QUESTIONS FOR THE BROKER REAL ESTATE EXAM, WHICH THEY HAVE AVAILABLE ON THE WEB, TO GET A BETTER FEEL OF THE WAY THE QUESTIONS ARE STATED IN THE STATE EXAM.
MULTIPLE CHOICE QUESTIONS
The exam for the Illinois Real Estate Broker License is a multiple choice question. This is an advantage for the person taking the exam because the answer is provided for each question. As a result, reasonably intense study will provide enough familiarity with this material to answer a large number of questions without having to commit all the material to memory. The answer will be available in the list of possible answers.
GENERAL STRUCTURE OF THE QUESTIONS
Tests knowledge of Definitions, meaning of words and phrases used in Real Estate. This material has to be memorized. Short lists are prime targets for this type of question, so they should be memorized. Definitions of concepts that can result in a single word or phrase answer are also prime targets. These questions should be answered in the first read-through of the state exam.
These are more complicated questions. They involve relating several concepts to come up with an answer. They should be done only in the second or third read-through of the state exam. They should be read slowly and carefully when answering the questions at the end of each chapter of this book and while taking the state exam.
They will take a word or phrase and ask where it is used or how it is used in real estate transactions or ask where the concept is carried out in real life situations in relation to real estate transactions.
Many students read the questions too quickly and do not notice some key words which change the meaning of the question radically. Here are a few examples:
Several answers seem alike, but only a word or two differentiate them.
Best Answer — several answers seem to be applicable, but one is the best
Which is True
Which is False
“Which of the following is TRUE?” means there are three wrong answers and one true answer.
What is the difference
What do they have in common
In all of these situations, it takes a careful and slow reading of the question to spot the traps or items that have to be taken into consideration which are not apparent in a quick reading of the question. These questions should never be answered in the first sweep through the exam.
THE STATE BROKER EXAM IS DESIGNED FOR THE AVERAGE PERSON TO PASS
The state spends considerable time developing questions that are not too hard or too simple. They then test these questions in each exam given for the Broker’s License. There are 5 evaluation questions in the National portion of the state exam and 5 evaluation questions in the State portion of the state exam.
SUBJECTS COVERED IN THE NATIONAL PORTION
OF THE REAL ESTATE BROKER EXAM
100 QUESTIONS PLUS 5 UNGRADED TEST QUESTIONS
1 Agency Relationships and Contract
A. Agency Relationships
- Creating Agency
- Types of Agency (including implied agency)
- Rights, Duties and Obligations of the Parties
- Termination and Remedies for Non-Performance
- Disclosure (related to representation)
B. General Legal Principles, Theory, and Concepts about Contracts
- 1. Unilateral / Bilateral
- 2. Validity
- Void and Voidable
- 4. Notice of Delivery / Acceptance
- 5. Executory / Executed
- Addenda to Contracts
C. Purchase Contracts (contracts between seller and buyer)
- General Principles and Legal Concepts
- 2. Purchase Contract (contract of sale, purchase and sale agreement, etc.)
- Options (contractual right to buy)
- 4. Basic Provisions / Purpose / Elements
- 5. Conditions for Termination / Breach of Contract
- Offer and Acceptance (counter offers, multiple offers, negotiation, earnest money)
- 7. Contingencies
- Duties and Obligations of the Parties
D. Service/Listing Buyer Contracts (contracts between licensee and seller or buyer)
- General Principles and Legal Concepts
- Basic Provisions / Purpose / Elements
- Duties and Obligations of the Parties
- Conditions for Termination/Breach of Contract
- Remuneration / Consideration / Fees
- Types of Service / Listing Contracts
E. Employment Agreements between Broker and other Licensees (including supervision)
2. Real Property Ownership/Interest
A. Freehold Estates (rights of ownership)
- Basic Concepts and Terminology
- Types of Leases
- Basic Elements and Provisions of Leases
- Rights and Duties of the Parties
- Remedies for Default / Non-Performance
D. Forms of Business Ownership
- Sole Proprietorship
- General or Limited Partnership
E. Private Restrictions on Real Property/Land Use and Matters Affecting Ownership
- Easements / Rights of Way / Licenses
- Preexisting Leases or Other Agreements
- Deed Conditions, Covenants, and Restrictions
- Property Owner Association Agreements
F. Government Powers and Control of Land Use
A. Basic Concepts and Terminology
- Loan-to-Value Ratio
- Term and Payment
- Principal and Interest
- Direct and Indirect Costs (points, discounts)
- Return on Investment / Rate of Return
B. Types of Financing
- Interest Only
- Construction Loan
- Home Equity
C. Methods of Financing
D. Financing Instruments (Mortgages, Trust Deeds, Promissory Notes)
- Basic Elements and Provisions of Financing Instruments
- Legal Principles
E. Government Oversight
F. Lending Process
- Pre-approval and Pre-qualification (e.g., debt ratios, credit scoring, and history)
- Parties to the Lending Process (e.g., loan originator, underwriter, mortgage broker)
3. Real Property
A. Methods of Legal Description of Land
- Metes and Bounds
- Rectangular Survey
- Lot and Block
B. Methods of Measurement
- Structures (space and volume)
- Livable Area
- Land Measurement.
C. Property Valuation
- Basic Concepts and Terminology
- Influences and Characteristics Affecting Value
- Comparative Market Analysis (performed by a real estate
- Broker Price Opinion
- Real Property (e.g., fixtures vs. personal property (e.g.,chattel)
D. Methods of Valuation
- Sales Comparison (Market Data) Approach
- Cost Approach
- Income Analysis Approach
- Appraisal Process/Procedure
- Definition of Clear (Marketable) Title
- Matters Affecting Title
- Title Insurance
- Court-Ordered Sale (e.g., Foreclosure)
- Adverse Possession
- Settlement Procedures (closing the transaction)
5. Marketing Regulations (Purchase & Rental)
A. Property Advertising (Including Fair Housing) Disclosures
- Environmental Concern (e.g., lead-based paint, radon)
- Property Condition
B. Licensee Advertising.
6. Property Management
A. General Principles of Property Management Agreements
B. Basic Provisions/Purpose/Elements of Property Management Agreements
C. Type of Contracts
D. Duties and Obligations of the Parties
E. Market Analysis and Tenant Acquisition
F. Accounts and Disbursement
G. Property Maintenance and Improvements
7. Real Estate Calculations
A. Compensation, Commission and Fees
B. Valuation/Market Sale Price and Yields
C. Net to Seller, Cost to Buyer (Credits and Debits)
D. Tax and other Prorations
G. Prepayment Penalties
H. Loan-to-Value Ratio
I. Measurement (e.g., square footage, acreage, volume)
J. Property Management/Investment (e.g, rate of return)
TYPES OF QUESTIONS IN THE STATE BROKER EXAM
In addition, all items will be classified according to the cognitive level that is expected to be required for the entry-level candidate to appropriately respond to the item. The cognitive level classifications are defined in the following table, which also shows the percentage of items at each level for the salesperson examination.
Requires only recognition of isolated information, such as specific facts, generalizations, concepts, principles, or procedures. The information generally does not vary relative to the situation.
Percentage of Items
Requires interpretation, classification, or manipulation of limited concepts or data, in which the response or outcome is situationally dependent, but not overly complex.
Requires integration or synthesis of a variety of concepts to solve a specific problem situation (for example, evaluating and rendering judgments on complex problems with many situational variables).