Which type of agency relationship is NOT recognized in Illinois?
Audio Lesson
Duration: 3:06
Question & Answer
Review the question and all answer choices
Exclusive buyer agency
Exclusive buyer agency is CORRECT_ANSWER in Illinois. This is a recognized form where a buyer's agent represents only the buyer's interests in a transaction, with fiduciary duties including loyalty, confidentiality, and obedience.
Designated agency
Designated agency is CORRECT_ANSWER in Illinois. This occurs when a brokerage firm represents both buyer and seller, but different agents within the firm are designated to represent each party separately, avoiding conflicts of interest.
Transaction brokerage
Single agency
Single agency is CORRECT_ANSWER in Illinois. This refers to a traditional agency relationship where an agent represents either the buyer or the seller, but not both, with full fiduciary duties owed to that single client.
Why is this correct?
Transaction brokerage is not recognized in Illinois because state law requires licensees to establish clear agency relationships with fiduciary duties. Licensees must either represent buyers, sellers, or both as disclosed dual agents, rather than acting as neutral facilitators without fiduciary obligations.
Deep Analysis
AI-powered in-depth explanation of this concept
Understanding agency relationships is fundamental to real estate practice because they define the legal and ethical duties agents owe to clients. This question tests knowledge of Illinois-specific agency regulations, which differ from many other states. The core concept is recognizing which agency forms are legally permitted in Illinois. To arrive at the correct answer, one must understand that Illinois law requires licensees to represent either the buyer, seller, or both as disclosed dual agents, but does not permit transaction brokerage. This distinction is crucial because it affects how agents can structure their relationships with clients and what disclosures must be made. The question is challenging because it requires knowledge of state-specific laws rather than general real estate principles. Additionally, the terminology used in different agency models can be confusing, with similar concepts having different names across states. This connects to broader knowledge about fiduciary duties, disclosure requirements, and how agency relationships impact transaction procedures.
Knowledge Background
Essential context and foundational knowledge
Illinois has specific regulations regarding agency relationships outlined in the Illinois Real Estate License Act of 2000. The state requires licensees to provide written disclosure of their agency relationships to all parties early in the transaction process. Illinois law mandates that licensees must either represent a buyer, a seller, or both as disclosed dual agents. Transaction brokerage, which is recognized in some states where licensees act as neutral facilitators without fiduciary duties to either party, is not permitted in Illinois. This regulatory approach ensures that clients always have representation with defined fiduciary obligations rather than having transactions handled by neutral intermediaries.
Think of Illinois agency relationships as a courtroom: transaction brokerage would be like having a judge who doesn't represent either side, but Illinois requires either a prosecutor (seller's agent) or defense attorney (buyer's agent), or both with separate attorneys (dual agency).
When encountering Illinois agency questions, visualize this courtroom scenario to remember that neutral positions aren't allowed.
When questions ask about agency relationships in Illinois, remember that transaction brokerage is never an option. Illinois requires clear fiduciary relationships with either single or dual agency representation.
Real World Application
How this concept applies in actual real estate practice
A licensed real estate agent in Chicago is working with both a buyer and seller who want to use the same brokerage. In many states, the agent could structure this as a transaction brokerage with no fiduciary duties to either party. However, in Illinois, the agent must first establish clear agency relationships through written disclosure. The broker would need to either: 1) Assign different agents from the firm to represent each party as designated agents, or 2) Have one agent represent one party while the other party is unrepresented, with proper disclosure. Attempting to structure this as a transaction brokerage would violate Illinois regulations.
More Agency Law Episodes
Continue learning with related audio lessons
In Washington, dual agency requires:
2:35 • 0 plays
Missouri requires agency disclosure:
2:11 • 0 plays
Connecticut real estate licensees are regulated by the:
2:35 • 0 plays
A broker provides services to both a buyer and a seller in a transaction without disclosing their dual agency status. This is an example of:
2:27 • 0 plays
North Carolina does NOT recognize which type of agency?
3:06 • 0 plays
Ready to Ace Your Real Estate Exam?
Access 2,499+ free podcast episodes covering all 11 exam topics.