Free Iowa Real Estate Practice Test (2026) — LicenseIQ

Question 1

Who is responsible for the accuracy of the information on an Iowa groundwater hazard statement?

Accepted Answer

The statute makes the owner responsible for accuracy and shields the agent and preparer unless they have direct knowledge contrary to the statement.

Question 2

A retail lease where rent is based partly on sales volume is a:

Accepted Answer

Percentage leases, common in retail, charge base rent plus a percentage of gross sales above a breakpoint.

Question 3

In addition to the 60-hour course, which set of courses must an original Iowa salesperson applicant complete?

Accepted Answer

Original applicants complete three 12-hour live courses: Developing Professionalism and Ethical Practices, Buying Practices, and Listing Practices. The 8/4/24 combination is the continuing education requirement for renewal, not the licensing requirement.

Question 4

In a mortgage, the borrower who pledges the property as security is the:

Accepted Answer

The mortgagor (borrower) gives the mortgage to the mortgagee (lender) in exchange for the loan.

Question 5

What must a licensee obtain before acting as a dual agent for both the buyer and seller in Iowa?

Accepted Answer

Iowa Code 543B.58 requires both buyer and seller to consent in writing. If either refuses, the licensee cannot act as a dual agent.

Question 6

Which ad phrase is most likely to violate fair housing advertising rules?

Accepted Answer

References that exclude or prefer protected classes, such as familial status ('no kids'), are discriminatory. Describe the property, not the desired buyer or tenant.

Question 7

A title search is performed primarily to:

Accepted Answer

A title search establishes the chain of title and reveals encumbrances or defects before closing. (Reclassified from section 17 to section 9 / CORE - not NJ-specific.)

Question 8

A life estate is measured by:

Accepted Answer

A life estate lasts for the duration of a specified person's life, then passes to the remainderman or reverts to the grantor. A fixed term describes an estate for years (a leasehold).

Question 9

A seller wants to net $250,000 after paying a 6% commission and $6,000 in other closing costs. To the nearest dollar, what must the sale price be?

Accepted Answer

Net + other costs = $256,000, which equals 94% of the price (100% - 6%). Price = $256,000 / 0.94 = $272,340.43, about $272,340. Adding 6% to $256,000 ($271,360) understates the price.

Question 10

Which deduction from a security deposit is NOT allowed under Iowa Code 562A.12?

Accepted Answer

Restoration deductions exclude ordinary wear and tear. Unpaid rent, tenant-caused damage, and possession costs from a bad-faith tenant are permitted.

Question 11

An unlicensed property management assistant shows an apartment, collects the first month's rent and deposit, and has the tenant sign the brokerage's standard lease form. Under the Iowa rules, these actions are:

Accepted Answer

The rules permit support staff to show rental property, collect rent and deposits, and complete and execute rental form agreements. Rental rules are looser than sale rules.

Question 12

Private mortgage insurance (PMI) is typically required on a conventional loan when the down payment is:

Accepted Answer

PMI protects the lender and is generally required when the borrower puts down less than 20% (LTV over 80%).

Question 13

May an unlicensed assistant write a newspaper ad for a listing?

Accepted Answer

Writing advertising and promotional materials is permitted subject to licensee and designated broker approval. Preparing or publishing ads without that approval is prohibited.

Question 14

When must the seller disclosure statement be delivered to the buyer in Iowa?

Accepted Answer

Iowa Code 558A.2 requires delivery before the transferor makes or accepts a written offer. Delivery after acceptance gives the buyer a right to revoke.

Question 15

Which Iowa licensees are exempt from the mandatory errors and omissions insurance requirement?

Accepted Answer

Iowa Code 543B.47 requires E&O coverage of every active licensee and firm. Only inactive licensees are exempt.

Question 16

A licensee lets her E&O coverage lapse, receives a Commission audit notice, and buys a policy the next day. Which statement is correct?

Accepted Answer

The rules say coverage must be continuous, and buying a policy after receiving an audit notice does not prevent discipline. The 20-day period is only the deadline to respond.

Question 17

Which is the most common and desirable way a real estate sales contract terminates?

Accepted Answer

Contracts ideally end by performance. They can also end by mutual agreement, impossibility, operation of law, or breach.

Question 18

A developer's ads for a new subdivision always show only people of one race. This may be:

Accepted Answer

Consistently depicting only one race, sex or family type can indicate a preference and violate fair housing advertising rules.

Question 19

Local governments enforce zoning ordinances and building codes primarily through:

Accepted Answer

Building permits verify compliance with zoning and codes before construction; inspections confirm the work, leading to a certificate of occupancy.

Question 20

To qualify for the IRS Section 121 exclusion on the sale of a home, the seller generally must have owned and used it as a primary residence for at least:

Accepted Answer

The exclusion ($250,000 single / $500,000 married filing jointly) requires 2 years of ownership and use within the 5 years before sale, and can be used once every 2 years.

Question 21

A broker's trust account bank statement closing June 30 shows that bank charges exceeded his personal funds in the account. By when must he cure the shortfall?

Accepted Answer

The broker must correct the shortfall within 15 calendar days of the bank statement's closing date. June 30 plus 15 days is July 15.

Question 22

Under a land contract (contract for deed), during the payment period the buyer holds:

Accepted Answer

In an installment/land contract the buyer has equitable title and possession; the seller keeps legal title until the final payment.

Question 23

A property use that legally existed before a new zoning ordinance and is allowed to continue is a:

Accepted Answer

A legal nonconforming ('grandfathered') use predates the ordinance and may continue, usually with limits on expansion. A variance is permission to deviate from a current requirement.

Question 24

A person who dies with a valid will is said to have died:

Accepted Answer

Testate = with a will (testator); intestate = without a will, so state descent laws apply; escheat occurs only if there is no will and no heirs.

Question 25

A tenant who vacates because the landlord failed to keep the premises habitable may claim:

Accepted Answer

Constructive eviction is the tenant's remedy when the landlord's failures make the premises unlivable; actual eviction is the landlord's court-ordered removal of a tenant.

Iowa real estate practice test

1. Who is responsible for the accuracy of the information on an Iowa groundwater hazard statement?

2. A retail lease where rent is based partly on sales volume is a:

3. In addition to the 60-hour course, which set of courses must an original Iowa salesperson applicant complete?

4. In a mortgage, the borrower who pledges the property as security is the:

5. What must a licensee obtain before acting as a dual agent for both the buyer and seller in Iowa?

6. Which ad phrase is most likely to violate fair housing advertising rules?

7. A title search is performed primarily to:

8. A life estate is measured by:

9. A seller wants to net $250,000 after paying a 6% commission and $6,000 in other closing costs. To the nearest dollar, what must the sale price be?

10. Which deduction from a security deposit is NOT allowed under Iowa Code 562A.12?

11. An unlicensed property management assistant shows an apartment, collects the first month's rent and deposit, and has the tenant sign the brokerage's standard lease form. Under the Iowa rules, these actions are:

12. Private mortgage insurance (PMI) is typically required on a conventional loan when the down payment is:

13. May an unlicensed assistant write a newspaper ad for a listing?

14. When must the seller disclosure statement be delivered to the buyer in Iowa?

15. Which Iowa licensees are exempt from the mandatory errors and omissions insurance requirement?

16. A licensee lets her E&O coverage lapse, receives a Commission audit notice, and buys a policy the next day. Which statement is correct?

17. Which is the most common and desirable way a real estate sales contract terminates?

18. A developer's ads for a new subdivision always show only people of one race. This may be:

19. Local governments enforce zoning ordinances and building codes primarily through:

20. To qualify for the IRS Section 121 exclusion on the sale of a home, the seller generally must have owned and used it as a primary residence for at least:

21. A broker's trust account bank statement closing June 30 shows that bank charges exceeded his personal funds in the account. By when must he cure the shortfall?

22. Under a land contract (contract for deed), during the payment period the buyer holds:

23. A property use that legally existed before a new zoning ordinance and is allowed to continue is a:

24. A person who dies with a valid will is said to have died:

25. A tenant who vacates because the landlord failed to keep the premises habitable may claim:

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