Free Iowa Agency Practice Test — LicenseIQ

Question 1

A dual agent learns that the buyer will pay up to $20,000 more than the current offer. What may the dual agent do with that information?

Accepted Answer

A dual agent may not disclose one client's confidential information to the other client. Being asked directly does not change that.

Question 2

An agent tells a buyer he will show homes only if the buyer uses the agent's brother as mortgage broker. This is an illegal:

Accepted Answer

Conditioning one service on the purchase of another is a tying arrangement prohibited by antitrust law.

Question 3

A buyer's agent is offered a $500 gift card by a lender if the buyer closes with that lender. What does Iowa law require before the agent accepts?

Accepted Answer

A licensee may not accept transaction-related compensation from anyone other than the client without written notice to all parties. There is no dollar threshold. (Federal RESPA rules may separately prohibit the payment.)

Question 4

Which duty does a seller's agent owe to a buyer who is a customer, not a client?

Accepted Answer

Customers are owed HARD duties - Honesty, Accounting, Reasonable skill and care, and Disclosure of material facts - but not loyalty, obedience or confidentiality.

Question 5

An agent advertises a home as having a 'new roof' without verifying it; the roof is actually 18 years old. This is:

Accepted Answer

Stating unverified facts that prove false is negligent misrepresentation; knowingly false statements are fraud. Puffing is opinion, not a verifiable fact.

Question 6

A buyer's agent is about to negotiate on a listed property. What disclosure must the buyer's agent make to the listing licensee?

Accepted Answer

Iowa Code 543B.57(5) requires the buyer's licensee to inform the listing licensee of the agency relationship before negotiations begin. Who pays does not determine agency.

Question 7

Under Iowa's agency disclosure rules, when is agency disclosure NOT required?

Accepted Answer

The rules exempt a licensee acting solely as a principal, and written solicitations of business. The licensee must still disclose their personal interest in writing under 543B.56(3).

Question 8

An agent authorized to perform a single specific act for a principal is a:

Accepted Answer

A special (limited) agent has authority for a specific task, typical of a listing agent. A property manager is usually a general agent.

Question 9

In a cooperative sale, a selling agent receives $1,500 cash earnest money. What is the proper handling?

Accepted Answer

Cash accepted by a selling agent goes into the selling broker's trust account and may then be forwarded to the listing broker, the usual holder, by a check drawn on that account.

Question 10

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 11

An agency relationship can be terminated by all of the following EXCEPT:

Accepted Answer

Agency ends by performance, expiration, mutual agreement, operation of law, death or incapacity, or destruction of the property - not by the wish of an unrepresented customer.

Question 12

A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

Accepted Answer

The duty of confidentiality bars disclosing information, like the seller's lowest acceptable price, that would harm the client's bargaining position.

Question 13

The fiduciary duty that requires an agent to safeguard and account for all money and property received on behalf of the client is:

Accepted Answer

The duty of accounting requires the agent to track, report on and properly handle all funds and documents belonging to the client.

Question 14

A buyer's agent's brother owns a home that fits the buyer's needs. Before showing it, the agent must:

Accepted Answer

Any personal or financial interest of the agent or family must be disclosed up front so the client can make an informed decision.

Question 15

A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

Accepted Answer

Implied agency arises from conduct; the agent then owes full fiduciary duties. Express agency is created by stated agreement, ideally in writing.

Question 16

Which statement about dual agency is correct?

Accepted Answer

Dual agency creates an inherent conflict; with informed written consent, the agent provides limited representation and must keep each party's confidences.

Question 17

When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

Accepted Answer

Designated agency assigns separate agents within one brokerage; the broker is still a dual agent and written consent is required.

Question 18

An Iowa agent is working with two unrelated buyer clients who are both looking at similar homes, in separate transactions. Which is correct?

Accepted Answer

Iowa Code 543B.60 allows a licensee to serve more than one client in different transactions. Dual agency means both sides of the same transaction. If the agent agreed to serve only one buyer, that agreement must be stated in the agency disclosure.

Question 19

Which duty does an Iowa licensee owe to every party in a transaction, including a party who is not a client?

Accepted Answer

Under 543B.56(1), all parties are owed honesty, good faith, disclosure of known material adverse facts, and accounting. Putting a party's interests first and disclosing all material information are client-only duties.

Question 20

Where do an Iowa licensee's duties to clients primarily come from?

Accepted Answer

Iowa Code 543B.62 says the statutory duties supersede common-law fiduciary duties to the extent they conflict. The one exception preserves common-law liability for negligent or fraudulent misrepresentation.

Question 21

A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

Accepted Answer

Latent (hidden) defects known to the seller or agent must be disclosed; failing to do so can create liability for both.

Question 22

A material defect that a seller/agent must disclose is one that:

Accepted Answer

Material defects significantly affect value or would influence a buyer's decision and must be disclosed.

Question 23

An Iowa licensee wants to buy a house listed by another brokerage for her own account. What does Iowa law require?

Accepted Answer

Under 543B.56(3), a licensee may not act for herself, immediate family, her brokerage, or an entity she has an interest in unless that interest is disclosed in writing to all parties. Although agency disclosure is not required when acting solely as a principal, the interest itself must still be disclosed.

Question 24

At an open house, a buyer begins telling the listing agent the most he could pay. The agent should first:

Accepted Answer

Agents must disclose up front whom they represent so customers don't mistakenly share confidential information - anything the agent learns must be shared with the client.

Question 25

A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

Accepted Answer

A general agent handles a range of matters in a continuing relationship (typical of property management). A listing agent is a special (limited) agent for one transaction.

Iowa real estate agency practice test

1. A dual agent learns that the buyer will pay up to $20,000 more than the current offer. What may the dual agent do with that information?

2. An agent tells a buyer he will show homes only if the buyer uses the agent's brother as mortgage broker. This is an illegal:

3. A buyer's agent is offered a $500 gift card by a lender if the buyer closes with that lender. What does Iowa law require before the agent accepts?

4. Which duty does a seller's agent owe to a buyer who is a customer, not a client?

5. An agent advertises a home as having a 'new roof' without verifying it; the roof is actually 18 years old. This is:

6. A buyer's agent is about to negotiate on a listed property. What disclosure must the buyer's agent make to the listing licensee?

7. Under Iowa's agency disclosure rules, when is agency disclosure NOT required?

8. An agent authorized to perform a single specific act for a principal is a:

9. In a cooperative sale, a selling agent receives $1,500 cash earnest money. What is the proper handling?

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

11. An agency relationship can be terminated by all of the following EXCEPT:

12. A listing agent knows the seller will accept $20,000 less than list price. A buyer asks, 'Will they take less?' The agent should:

13. The fiduciary duty that requires an agent to safeguard and account for all money and property received on behalf of the client is:

14. A buyer's agent's brother owns a home that fits the buyer's needs. Before showing it, the agent must:

15. A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:

16. Which statement about dual agency is correct?

17. When a broker appoints one salesperson to represent the seller and another salesperson in the same office to represent the buyer, this is:

18. An Iowa agent is working with two unrelated buyer clients who are both looking at similar homes, in separate transactions. Which is correct?

19. Which duty does an Iowa licensee owe to every party in a transaction, including a party who is not a client?

20. Where do an Iowa licensee's duties to clients primarily come from?

21. A seller knows that the basement flooded last spring, but the damage was repaired and is not visible. The seller and listing agent must:

22. A material defect that a seller/agent must disclose is one that:

23. An Iowa licensee wants to buy a house listed by another brokerage for her own account. What does Iowa law require?

24. At an open house, a buyer begins telling the listing agent the most he could pay. The agent should first:

25. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

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