IL Real Estate key terms

The legal obligation of a real estate agent to put the client's interests ahead of the agent's own, including duties of care, obedience, loyalty, disclosure, confidentiality, accounting, and reasonable skill and diligence.

The party who has an agency relationship with a brokerage and therefore receives fiduciary duties, as distinguished from a customer, who is unrepresented and owed only honesty, fairness, and accurate information.

An Illinois brokerage arrangement in which the sponsoring broker assigns one licensee to represent only the buyer and another to represent only the seller in the same transaction, limiting conflicts.

Representation of both buyer and seller in one transaction by the same licensee or brokerage; Illinois permits it only with the informed written consent of all parties.

The uninterrupted series of efforts by a licensee that leads to a transaction and entitles the licensee to a commission, often decided by who first produced the ready, willing, and able party.

The most complete form of real property ownership, lasting indefinitely, freely transferable during life, and inheritable on death, subject only to government powers and private restrictions.

A right to use a neighboring parcel that benefits the dominant parcel and passes automatically with it when the dominant parcel is sold, regardless of who owns it.

Any lien, easement, restriction, encroachment, or other burden attached to real property that limits the owner's use or may reduce its market value.

Co-ownership in which each owner holds a distinct, transferable, inheritable fractional share with no right of survivorship; shares need not be equal and owners may sell independently.

Co-ownership requiring equal shares and unity of time, title, interest, and possession, featuring a right of survivorship that passes a deceased owner's interest to the survivors.

A condominium area reserved for the use of fewer than all unit owners, such as a balcony or an assigned parking space, typically maintained by the association.

Personal property that has been attached to or permanently associated with real estate so that it is legally treated as part of the land and transfers with the property.

The two essential steps in forming a contract: one party's definite proposal and the other party's unqualified agreement to exactly those terms, communicated back to the offeror.

A buyer's good-faith deposit on a purchase, held in trust by a broker or escrow agent and applied to the price at closing or refunded or forfeited under the contract.

A contract provision making an obligation conditional, such as a financing, inspection, or appraisal contingency; if the condition fails, the protected party may cancel and recover deposits.

The rule requiring real estate sale contracts, options, and leases longer than one year to be in writing and signed by the party against whom enforcement is sought.

Illinois statute requiring sellers of most homes to deliver a written report of known material defects before contract; a buyer who does not receive it may rescind the contract.

The borrower's written promise to repay a loan according to stated terms of principal, interest, and payments; the mortgage or deed of trust gives the lender security for that promise.

A written pledge of real property as security for a debt in which the borrower keeps title, but the lender may foreclose on the property if the loan is not repaid.

The standard monthly housing payment consisting of principal, interest, property taxes, and homeowners insurance; lenders use this figure to qualify borrowers for a loan.

The loan amount divided by the property's sale price or appraised value, shown as a percentage; higher ratios typically require mortgage insurance and cost more.

A federally required form giving the borrower final loan terms and all closing costs, which must be received at least three business days before closing.

A foreclosure conducted through the court system, the method used in Illinois, in which a judge confirms the debt, orders a sale, and sets the borrower's redemption period.

A licensee's opinion of likely selling price based on recent sales, current listings, and expired listings; it is not an appraisal and cannot be used for federally related lending.

An appraisal method that estimates value by comparing recent sales of similar properties and adjusting their prices for differences in location, size, condition, and features.

The use of a property that is legally permissible, physically possible, financially feasible, and produces the greatest value, as determined by market analysis.

A written instrument that, when validly delivered, transfers an interest in real property from a grantor to a grantee; recording protects the grantee's interest against later claims.

A deed that transfers whatever interest the grantor may have, if any, with no warranties of title; often used to clear defects or transfer property between family members.

A policy protecting an owner or lender against financial loss from title defects and claims existing before the policy date; an owner's policy remains in effect as long as the owner holds title.

Filing a document such as a deed or mortgage with the county recorder to give public notice; Illinois follows a race-notice system, so a later buyer who records first may prevail.

A doctrine allowing a person to gain title to another's land through open, notorious, exclusive, hostile, and continuous possession for the statutory period, which in Illinois is twenty years.

The state statute that sets licensing requirements and rules of conduct for Illinois brokers and managing brokers, enforced by the Department of Financial and Professional Regulation.

The managing broker who holds the licenses of affiliated licensees, supervises their activities, and is responsible for the brokerage's trust accounts, records, and advertising compliance.

A brokerage account holding money belonging to others, such as earnest money or rental deposits, kept separate from the broker's funds and disbursed only as authorized.

Illegally mixing client money, such as earnest money, with a broker's personal or business funds, or failing to deposit it in the required escrow account.

Guiding buyers or tenants toward or away from particular neighborhoods, buildings, or units because of protected characteristics, which is illegal discrimination.

Inducing owners to sell by suggesting that members of a protected class are moving into the neighborhood and will reduce property values; also called panic selling and prohibited by fair housing law.

Refusing, limiting, or charging different terms for loans, insurance, or real estate services in particular neighborhoods based on the residents' race or other protected characteristics.

Illinois law prohibiting discrimination in real estate transactions and adding protected classes beyond federal law, including sexual orientation, gender identity, source of income, marital status, and military status.

Advertising a property for sale or lease without identifying the brokerage or responsible licensee as required by Illinois rules, making the ad misleading to the public.