Free Iowa Property Practice Test — LicenseIQ

Question 1

Which is required for a deed to be valid?

Accepted Answer

A valid deed needs a writing, competent grantor who signs, identifiable grantee, consideration, granting and habendum clauses, legal description, delivery and acceptance. The grantee does not sign; recording is not required for validity.

Question 2

A neighbor's new garage extends two feet over the property line. This is an:

Accepted Answer

An encroachment is an improvement that intrudes onto another's land; a survey establishes the boundary.

Question 3

In a lease, the tenant holds a ____ estate and the landlord holds a ____.

Accepted Answer

The lessee has a leasehold (non-freehold) estate; the lessor retains the leased fee interest plus the reversion.

Question 4

On a property condition disclosure form, if a seller does not know the age of the roof, the seller should:

Accepted Answer

Only the seller completes the form, reporting what is known and stating when something is unknown; guessing creates liability.

Question 5

The subject property has a garage; a comparable that sold for $300,000 does not. The garage is worth $15,000. The adjusted value of the comparable is:

Accepted Answer

Adjust the comparable, never the subject. The subject is superior, so add $15,000 to the comp: $315,000.

Question 6

Which instrument is exempt from Iowa's real estate transfer tax?

Accepted Answer

Mortgages and related instruments are exempt under 428A.2. A $5,000 lot is taxable because consideration exceeds $500.

Question 7

An owner's title insurance policy protects against:

Accepted Answer

Title insurance covers title defects existing before the policy date, such as forged deeds or undisclosed liens - not physical damage or future events.

Question 8

A rural property has no wells, tanks, waste sites, burial sites, or private sewage system. How is the groundwater hazard requirement met?

Accepted Answer

When none of the conditions exists, no separate statement is submitted, but the deed's first page must contain the prescribed exemption statement. Otherwise the recorder refuses to record.

Question 9

Which action may a life tenant take WITHOUT the remainderman's consent?

Accepted Answer

A life tenant may occupy or lease the property for the duration of the life estate but cannot sell, mortgage or commit waste that harms the remainderman's future interest.

Question 10

A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

Accepted Answer

Gaps in the chain or unreleased liens are clouds that must be cleared (e.g., by quitclaim deed or quiet title action) before title is marketable.

Question 11

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 12

A licensee may manage property for an owner for a fee only if there is:

Accepted Answer

Property management agreements must be written and signed; they make the manager a general agent and define duties, authority and fees.

Question 13

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 14

In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

Accepted Answer

The ADA's accessibility rules primarily cover public accommodations and commercial facilities; housing accessibility is governed mainly by the Fair Housing Act.

Question 15

A lender's title insurance policy protects:

Accepted Answer

A lender's (mortgagee's) policy protects the lender's interest up to the loan amount and declines as the loan is paid. An owner's (fee) policy protects the owner.

Question 16

Under Iowa Code 562A.12, interest earned on a security deposit during the first five years of the tenancy belongs to:

Accepted Answer

The statute assigns interest earned during the first five years to the landlord. (The housing trust fund distractor reflects the broker trust account rules, which can apply separately when a broker holds the funds.)

Question 17

The principle that a property's value tends to be set by the cost of an equally desirable substitute is:

Accepted Answer

Substitution: a buyer will pay no more than the cost of an equally desirable alternative.

Question 18

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 19

A home is assessed at $312,000 with a tax rate of 2.25%. What is the QUARTERLY tax payment?

Accepted Answer

Annual tax = $312,000 x 0.0225 = $7,020; quarterly = $7,020 / 4 = $1,755.

Question 20

Monthly rent is $1,375. What is the maximum security deposit under Iowa Code 562A.12?

Accepted Answer

The cap is two months' rent: 2 x $1,375 = $2,750. $4,125 is three months' rent.

Question 21

What is the minimum age to be issued an Iowa real estate salesperson license?

Accepted Answer

Iowa Code 543B.15 requires applicants to be at least 18. Candidates may sit for the PSI exam earlier, which is why 16 or 17 can seem plausible, but the license itself cannot issue before 18.

Question 22

Which item is included on the Real Estate Commission's sample seller disclosure form?

Accepted Answer

The Commission's sample form includes a lead water service line item (yes, no, or unknown), reflecting the statute's lead service line definition that took effect January 1, 2026.

Question 23

A seller delivers the disclosure statement, and a week later discovers that the water heater he reported as new is actually 12 years old. What must he do?

Accepted Answer

If information becomes inaccurate or misleading, the statement must be amended using the same delivery procedure. The exception is for changes caused by events after delivery, which is not this case: the information was wrong from the start.

Question 24

A listing agent refers her seller client to a title company in which her brokerage holds an ownership interest. What must she do?

Accepted Answer

A client is owed disclosure of any financial interest the licensee or brokerage has in a business the licensee refers the client to. Competitive pricing does not eliminate the duty.

Question 25

According to Iowa Code 543B.62, a licensee who shows a client's listed home is liable for a visitor's injury on the property only when the licensee:

Accepted Answer

The statute says the licensee does not possess the client's property and is liable for damage or injury only when the licensee is the direct and proximate cause. The client is responsible for the property's condition and safety.

Iowa real estate property practice test

1. Which is required for a deed to be valid?

2. A neighbor's new garage extends two feet over the property line. This is an:

3. In a lease, the tenant holds a estate and the landlord holds a .

4. On a property condition disclosure form, if a seller does not know the age of the roof, the seller should:

5. The subject property has a garage; a comparable that sold for $300,000 does not. The garage is worth $15,000. The adjusted value of the comparable is:

6. Which instrument is exempt from Iowa's real estate transfer tax?

7. An owner's title insurance policy protects against:

8. A rural property has no wells, tanks, waste sites, burial sites, or private sewage system. How is the groundwater hazard requirement met?

9. Which action may a life tenant take WITHOUT the remainderman's consent?

10. A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

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

12. A licensee may manage property for an owner for a fee only if there is:

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

14. In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:

15. A lender's title insurance policy protects:

16. Under Iowa Code 562A.12, interest earned on a security deposit during the first five years of the tenancy belongs to:

17. The principle that a property's value tends to be set by the cost of an equally desirable substitute is:

18. A title search is performed primarily to:

19. A home is assessed at $312,000 with a tax rate of 2.25%. What is the QUARTERLY tax payment?

20. Monthly rent is $1,375. What is the maximum security deposit under Iowa Code 562A.12?

21. What is the minimum age to be issued an Iowa real estate salesperson license?

22. Which item is included on the Real Estate Commission's sample seller disclosure form?

23. A seller delivers the disclosure statement, and a week later discovers that the water heater he reported as new is actually 12 years old. What must he do?

24. A listing agent refers her seller client to a title company in which her brokerage holds an ownership interest. What must she do?

25. According to Iowa Code 543B.62, a licensee who shows a client's listed home is liable for a visitor's injury on the property only when the licensee:

Sources