Real Estate Quiz Flashcards
Which statement about the Iowa Real Estate Commission is TRUE?
a. The state association of REALTORS® selects the members of the commission.
b. An independent testing company administers the examinations taken for real estate licensing.
c. The commission passes the laws by which all real estate licensees must abide.
d. The director of education oversees the operation of the commission’s activities.
b. An independent testing company administers the examinations taken for real estate licensing.
The exams are written under the supervision of the commission and administered by an independent testing company. The state association of REALTORS® does not select the real estate commission members. The legislature passes the laws; the commission makes and enforces rules. An executive secretary administers the operations of the commission.
Regarding Errors and Omissions (E&O) insurance, which statement is TRUE?
a. A licensee may not reject the group policy and obtain her own coverage.
b. The real estate commission has no control over an E&O provider to supply a group policy.
c. The group policy includes the right to cancel coverage for a licensee.
d. The real estate commission determines the minimum limits of coverage, deductibles, and permissible exceptions.
d. The real estate commission determines the minimum limits of coverage, deductibles, and permissible exceptions.
The Iowa Real Estate Commission contracts for a group policy and establishes the minimum limits of coverage.
The group policy can include any right on the part of the insurance provider to cancel coverage for a licensee.
Individuals may reject the group policy and obtain their own as long as it complies with the minimum requirements adopted by commission rule.
By State law, the Iowa Real Estate Commission may NOT:
a. carry on a program of real estate educational practices.
b. adopt rules to establish title insurance in Iowa.
c. adopt rules to carry out the provisions of the property disclosure law.
d. adopt rules to carry out and administer the provisions of real estate law.
b. adopt rules to establish title insurance in Iowa.
The writing of title insurance is not allowed in Iowa. The commission is authorized to adopt rules and administer the provisions of 5438 and 558A of the Iowa Code. In addition, it carries on a program of real estate education through a professional employee.
The Iowa Real Estate Education Fund is created as a financial assurance mechanism to assist in providing an education director and: a. regulatory compliance personnel. b. scholarships. c. radon pamphlets. d. seller disclosure forms.
a. regulatory compliance personnel.
The fund is created as a separate fund in the state treasury to provide an education director and regulatory compliance personnel. The commission does not prepare any forms regarding radon or seller disclosure.
Reference: Licensing Requirements
In Iowa, which of the following must be a licensed real estate broker or salesperson?
a. A partnership selling a building owned by the partners
b. A person accepting a referral fee from a licensed real estate agent
c. A nephew acting under his aunt’s power of attorney to list and sell her real estate
d. An on-site apartment manager working as an employee for the owner of the apartment complex
b. A person accepting a referral fee from a licensed real estate agent Because referral agents “assist in the procuring of prospects,” they are considered “dealing in real estate” and require a license in order to legally accept a fee. A nephew can sell his aunt’s home without a license if he has a duly executed power of attorney. Employees of an apartment complex owner are exempt under Iowa law, as are partners selling their own property.
Which of the following activities requires a real estate license?
a. A resident on-site manager collects rents on behalf of the building owner.
b. An auctioneer conducts the sale of a 160- acre farm but does not close the sale.
c. A company procures tenants for landlords for a fee.
d. An executor sells a decedent’s building.
c. A company procures tenants for landlords for a fee.
Procuring tenants for a fee requires a real estate license. An employed, on-site resident manager is specifically
exempt from being required to hold a real estate license. Auctioneers who just bark the sale but do not close the
sale are exempt, as are court-appointed administrators and executors.
In Iowa, a partnership, association, or corporation will be granted a license only if:
a. every member and/or officer actively participating in the brokerage business has a broker’s or salesperson’s
license.
b. two members or officers hold an active broker’s license.
c. all papers are properly filed with the secretary of state.
d. the brokerage business has paid a one time fee to the state’s Director of Revenue Office.
a. every member and/or officer actively participating in the brokerage business has a broker’s or salesperson’s
license.
All actively participating members of a partnership, association, or corporation must have either a broker’s or salesperson’s license. However, only one broker’s license is legally required for the organization to exist. That particular licensee is called the principal broker.
Filing papers with the secretary of state is a requirement for incorporation but not for real estate licensing. The Director of Revenue Office is a state agency that determines property tax rollback percentages.
“Engaging in the real estate business” consists of acting for another for a fee in all of the following activities
EXCEPT:
a. selling mobile homes.
b. managing real estate.
c. selling real estate.
d. collecting rents for the use of real estate.
a. selling mobile homes.
Mobile homes are considered personal property, not real property. To sell mobile homes requires an automobile dealer’s license, not a real estate license. The Iowa Department of Transportation regulates mobile home sales in Iowa. Once a mobile home has been placed on a permanent foundation and assessed as real property, the selling of the property for a fee requires a real estate license. A real estate license is required to manage real estate, collect rents, and/ or bring together buyers and sellers for a fee.
If engaged in the sale and closing of a real estate transaction, which of the following people are exempt from
Iowa’s licensing requirement?
a. Auctioneers
b. Attorneys-at-law acting solely as an incident to the practice of law
c. Appraisers
d. Associations, partnerships, and corporations
b. Attorneys-at-law acting solely as an incident to the practice of law
Attorneys-at law are exempt from real estate licensing requirements. Appraisers, associations, partnerships, and corporations, if engaging in real estate activities, must have a real estate license. Auctioneers are exempt as long as they do not attempt or close a transaction. Because the question specifically states “closing,” the auctioneer requires a license.
Which of the following persons must have a real estate broker’s license in order to transact business?
a. A full-time superintendent of a large apartment building who shows apartments to prospective tenants as part of his regular duties to the property owner
b. A daughter who has her parents’ power of attorney to negotiate the sale of her parents’ residence
c. A person who negotiates the sales of entire businesses, including stock, equipment and buildings, for an agreed fee
d. The owner of a six-plex who personally manages the building, collects rents, and shows apartments to pro
spective tenants
c. A person who negotiates the sales of entire businesses, including stock equipment and buildings, for an agreed fee.
You do not need a real estate license to sell personal property, such as stock equipment, but do need a license to sell the building. Owners are not required to obtain real estate licenses to manage their own properties. Full-time employees like superintendents of large apartment buildings are specifically exempt from being required to have a real estate license. A person who has power of attorney does need not to obtain a real estate license in order to negotiate the sale of a parent’s residence.
Some individuals are exempt from the provisions of the Iowa Code regarding real estate licensing. However,
who among the following must obtain a real estate license to perform the activity mentioned?
a. A property owner who sells or leases his or her own property
b. An individual who is employed as a resident property manager
c. An unlicensed full-time employee who accepts a 3 percent commission for selling her employer’s newly
constructed house
d. A person who receives compensation for procuring prospective buyers or renters of real estate
d. A person who receives compensation for procuring prospective buyers or renters of real estate.
A person who receives compensation for procuring prospective buyers or renters of real estate must hold a real estate license. Property owners who rent, sell, or buy property for themselves are exempt from licensing requirements, as are resident property managers and those who rent to their employers in the sale or purchase of real property.
In which of the following situations, though acting for another for some kind of fee, is a real estate license NOT
required?
a. Advertising yourself as being engaged in the business of real estate
b. Auctioning others’ personal property
c. Collecting rent for the use of real estate
d. Procuring of prospects intended to result in the sale or lease of real estate
b. Auctioning others’ personal property
Personal property is not covered in the definition of a broker. Procuring prospects, especially on the phone, requires a license. Advertising yourself as an agent requires a license, as does collecting rents for others for a fee.
Who among the following must have a real estate license in Iowa?
a. Auctioneers who close farm sales
b. Attorneys-in-fact
c. Administrators and executors
d. Employees of owners who on a regular, full time basis perform real estate-related tasks on property owned
by their employers.
a. Auctioneers who close farm sales
Auctioneers are exempt as long as their role is limited to just the auctioning. When the auctioneer closes or attempts to close the transaction, licensing is required. Employees are exempt when dealing with their employer’s property, and so are attorneys-in- fact while working under a duly executed power of attorney. In addition, administrators and executors may sell the estate’s real estate for a fee without being licensed.
Which of the following is a requirement to obtain an Iowa salesperson’s license?
a. Sponsoring broker’s signature on the application form
b. High school diploma or its equivalent
c. One-year residency
d. U.S. citizenship
a. Sponsoring broker’s signature on the application form
A salesperson is not allowed to obtain a license without a sponsoring broker whose responsibility is to supervise the activities of new licensees. A candidate applying for a real estate license must successfully complete a course of 60 hours in general principles of real estate. The candidate does not have to be a citizen of the United States or a resident of Iowa. Iowa does not require a high school diploma or its equivalent or any college courses.
In Iowa, applications for any salesperson’s real estate license must contain:
a. the applicant’s 30-hour pre-licensing certificate of completion.
b. a cashier’s check for the applicant’s real estate license.
c. a recent photograph of the applicant.
d. a pass notice from the testing service
d. a pass notice from the testing service.
Applications for any salesperson’s license must include a 60-hour prelicensing completion certificate, a pass notice from the testing service, and a check for $125. The check may be personal but cannot be a cashier’s check.
The commission does not require a photo.
A requirement for obtaining a broker’s license includes:
a. being of good moral character.
b. being at least 21 years of age.
c. having been actively engaged as a licensed salesperson for at least three years.
d. having successfully completed 60 hours of mandated real estate curriculum.
a. being of good moral character
In Iowa, the applicant for a broker’s exam must be of good moral character. The applicant must have been actively engaged as a licensed salesperson for at least two years , completed 72 hours of mandated curriculum, and be at least 18 years of age.
A person successfully completed prelicensing and passed the salesperson’s test on November 16, 2014. What is the latest date on which the person may apply for a salesperson’s license?
a. May 16, 2015
b. May 31, 2015
c. December 31, 2014
d. November 15, 2015
b. May 31, 2015
The law allows the applicant to apply up to the last working day of the sixth month following the qualifying
examination, in this example, May 31, 2015. December 31 is the expiration date of an active license.
An applicant for a real estate license in Iowa may be denied a license for:
a. being convicted of a felony.
b. not being at least 21 years old.
c. not having a high school diploma or equivalent.
d. not being a resident of Iowa for two years.
a. being convicted of a felony.
An applicant for a real estate license in Iowa may be denied a license if convicted of a felony. A person must
be at least 18 years of age, and there is no educational or residency requirement as a prerequisite to real estate
licensure.
The commission requires which of the following for salesperson candidates?
a. Completing a 72-hour prelicensing course
b. Being at least 21 years of age
c. Passing the salesperson’s real estate examination
d. Being a resident of Iowa
c. Passing the salesperson’s real estate examination.
Iowa does not have a residency or citizenship requirement to become a real estate licensee. However, candidates are required to be at least 18 years of age, complete a 60-hour prelicensing course, and pass Iowa’s salesperson’s exam by 70%. Reference: Licensing Requirements
The commission may deny the issuance or renewal of a real estate license:
a. upon receipt of notice that the applicant or licensee is in default of a college student loan.
b. if an applicant has been scrupulous.
c. if an applicant has been found guilty of an OMVI charge.
d. upon receipt of notice that the applicant or licensee is in default of his or her mortgage loan.
a. upon receipt of notice that the applicant or licensee is in default of a college student loan.
The commission may deny the issuance or renewal of a licensee upon certification of noncompliance from the college student aid commission. The commission would not hassle a licensee with scruples but might question someone that was unscrupulous. While an OMVI charge may be grounds for a hearing, it doesn’t automatically signal a denial for issuance of a license or its renewal. Defaulting on a mortgage is not an issue with the real estate commission.
The commission has the authority to waive the experience requirement and allow the person to take the broker’s exam, as long as the salesperson:
a. gets an approval letter from the attorney general’s office.
b. gets a waiver letter from the Iowa Real Estate Commission.
c. completes the salesperson’s prelicensing education.
d. establishes an office open to the public during normal business hours.
b. gets a waiver letter from the Iowa Real Estate Commission.
To get a waiver from the two year experience requirement, the agent must get a waiver from the commission.
The legal period of time that a broker has to send a change of business address to the commission is:
a. 14 calendar days.
b. 5 working days.
c. 10 working days.
d. 30 calendar days.
b. 5 working days.
Failure of a broker to inform the commission in writing within five working days of a change of address of a brokerage operation is a violation of commission rules.
If an agent’s license expires on Saturday, December 31, the licensee may renew:
a. on Tuesday, January 3, without paying a penalty.
b. before Saturday, December 31, to avoid a penalty payment.
c. on Tuesday, January 2, but has to pay a $25 penalty.
d. on Wednesday, January 3, without paying a penalty.
a. Tuesday, January 3, without paying a penalty.
Any deadline for filing a document is extended to the next working day when the deadline falls on a Saturday,
Sunday, or official state holiday.
If an agent’s license expires on December 31, and the licensee desires to become reinstated one year later, he
or she must file an application, must pay the regular license fee, and may either retake and pass the real estate
exam or satisfy all continuing education requirements and:
a. pay a reinstatement fee of $25 for each full or partial month.
b. pay a reinstatement fee of $1,000.
c. complete a 60 hour pre-licensing class.
d. take 12 hours of mandatory continuing education.
a. pay a reinstatement fee of $25 for each full or partial month.
Commission rules allow the agent wishing to be reinstated the option of either retaking and passing the real estate exam or paying a reinstatement fee of $25 for each full or partial month. Prelicensing classes are not required for reinstatement, and neither of these two options can be substituted with continuing education.
An inactive licensee must:
a. maintain errors and omissions (E&O) insurance.
b. conduct one transaction per year.
c. renew every three years.
d. take 36 hours of continuing education every three years.
c. renew every three years.
The inactive licensee must renew the inactive license every three years. The inactive licensee is not required to maintain E&O insurance, take continuing education courses, and may not conduct any real estate transactions.
A new salesperson received his license on October 6, 2018. When will his license expire?
a. December 31, 2021
b. October 5, 2021
c. January 1, 2020
d. December 31, 2020
d. December 31, 2016.
Iowa real estate licenses are issued for a full three years, counting the remaining portion of the year issued as a
full year.
When does a real estate license expire?
a. December 31 of the third year of licensure
b. June 30 of the third year of licensure
c. Third anniversary date of its original issuance
d. December 31 of the second year of licensure
a. December 31 of the third year of licensure
Regardless of the date of issuance, all licenses are issued for three-year terms, counting the remaining portion of the year issued as a full year. All individual licenses expire after three years.
At least annually, the Iowa Real Estate Commission publishes, and mails upon request, the names of all licensees licensed in Iowa and the names of:
a. all licensed appraisers in Iowa.
b. all the current members of the Iowa Real Estate Commission.
c. those whose licenses have been suspended or revoked within the last year.
d. all approved real estate schools in Iowa.
c. of those whose licenses have been suspended or revoked within the last year.
The commission, at least annually, prepares a list of the names and addresses of all licensees and all persons
whose licenses have been suspended or revoked within the last year and provides it to any person in Iowa upon
request.
If a licensee changes his personal residence, which of the following statements is TRUE?
a. The commission must be notified, in writing, of a change of residence or mailing address.
b. A request that a new license be immediately issued to reflect the change of address is required.
c. A $5,000 fine can be levied against a licensee for failing to notify the commission of a change in residence
or mailing address.
d. Nothing is required.
a. The answer is the commission must be notified, in writing, of a change of residence or mailing address. The
Iowa Real Estate Commission requires written notification in order to keep the licensee informed of any and all legal changes via the commission’s newsletter but will not issue a new license because of the salesperson’s change of address. The Iowa Real Estate Commission has the power to fine a licensee $2,500 for failure to notify it of a personal change of address . Failure to notify the Iowa Real Estate Commission is prima facie evidence of a violation of the Iowa Code.
Once a licensee allows his license to expire, how long does that person have to reinstate the expired license without monetary penalty? a. None of these b. Up to 30 days c. One year. d. Three years
a. The answer is none of these. After a license expires on December 31, there is no time limit in which to renew
without penalty. Iowa law allows a licensee to reinstate within the first 30 days but assesses a $25 penalty on top of the normal renewal fee. On January 31, the penalty becomes $50.
Iowa law allows a licensee whose license has expired up to three years to reinstate without starting over with
prelicensing. However , in addition to paying the normal renewal fee, the licensee must either pass a new examination or pay a reinstatement penalty of $25 per month for each month of expiration up to $900.
In Iowa, real estate licenses are renewed:
a. annually, 30 days before or after a licensee’s birth date.
b. on or before June 30 of every third year.
c. annually, based on the anniversary date of its issuance.
d. on or before December 31 of every third year
d. on or before December 31 of every third year.
Real estate licenses must be renewed on or before December 31 every three years.
In order to renew a salesperson’s license on inactive status, the salesperson must:
a. renew the license every three years.
b. renew the license every four years.
c. take 36 hours of continuing education every three years.
d. apply for a waiver from the commission.
a. renew the license every three years.
To renew on inactive status, the only requirement is to just renew your license. Education is only required to
renew on active status.
In Iowa, who administers real estate license law?
a. Iowa Real Estate Commission
b. Attorney General’s Office
c. Iowa Association of REALTORS®
d. Department of Housing and Urban Development (HUD)
a. Iowa Real Estate Commission
By legislative rule, the Iowa Real Estate Commission administers real estate license law. The attorney general’s office handles the sale of out of-state subdivided land but does not administer license law. The Iowa Association of REALTORS® is a trade association whose members must have a real estate license, but not all licensees are REALTORS®. HUD is a federal government agency supervising housing issues but not real estate licensees.
The members of the Iowa Real Estate Commission are appointed by the:
a. governor, after a public election.
b. Iowa Association of REALTORS®.
c. Attorney General.
d. Governor, subject to senate approval.
d. governor, subject to senate approval.
The governor makes the appointments subject to confirmation by the state senate. The Iowa Association of REALTORS® is a trade association that could recommend names to the governor’s office, but the governor’s office is not bound by its recommendations. Neither the public nor the attorney general’s office has the authority to appoint members to the commission.
The real estate commission has the authority to:
a. compose the examination questions on the state exam.
b. administer the exams given at the testing sites.
c. enact the laws that govern real estate licensees.
d. make and enforce the rules by which all real estate licensees must abide
d. make and enforce the rules by which all real estate licensees must abide.
The Iowa legislature enacts the law under 5438 of the Iowa Code, whereas the Iowa Real Estate Commission is authorized by state law to write rules and regulations that have the force of law. The exam questions are written by an independent testing service and reviewed by the real estate commission. The testing service administers the exams.
The mix of licensed and unlicensed members of the real estate commission is:
a. five licensed and two unlicensed.
b. four licensed and three unlicensed.
c. two licensed and five unlicensed.
d. six licensed and three unlicensed.
a. five licensed and two unlicensed.
The correct mix is five licensed and two unlicensed. The unlicensed members represent the public and give balance to the commission. At least one of the five licensed members must be a salesperson. This mix helps to ensure fair representation for both real estate agents and the public. The members must live in seven different Iowa counties.
A real estate commissioner will serve for a term of:
a. three years.
b. two years.
c. one year.
d. four years.
a. three years.
Iowa Code establishes appointments and reappointments as three-year terms. The member may serve three full terms (nine years) or two full terms after completing a partial term.
If a salesperson member of the Iowa Real Estate Commission elects to become a broker associate during her appointment to the commission, she:
a. must resign from the commission.
b. will automatically be reappointed as a broker member of the commission.
c. may complete her term as a salesperson but will lose eligibility for reappointment as a salesperson if she is
the only salesperson member.
d. may complete her term as a salesperson and still be eligible for reappointment as a salesperson for another
three years.
c. may complete her term as a salesperson but will lose eligibility for reappointment as a salesperson if she is the
only salesperson member.
At least one of the licensed members of the commission is required to be a licensed salesperson. Should a salesperson become a licensed broker during a term in office, she may complete the term but is eligible for reappointment on the commission as a licensed broker if there are other salespersons serving as members. The salesperson is not required to resign the position. The state does not allow any automatic reappointments.
Which of the following is TRUE of the Iowa Real Estate Commission?
a. The commission has only one commissioner, who is appointed by the governor and confirmed by the state
senate.
b. Members are not allowed to hold any other elective or appointed state or federal office simultaneously.
c. The commission is made up of a five member board, three unlicensed and two licensed.
d. Members may serve more than nine years
b. Members are not allowed to hold any other elective or appointed state or federal office simultaneously.
Members of the commission are prohibited from holding any elective or appointed state or federal office that
would create a conflict of interest. Instead of one commissioner, the commission in Iowa consists of five licensed members and two unlicensed members to protect the public. They are appointed by the governor, are confirmed by the state senate, and serve three-year terms that can be repeated three times.
Members of the commission are entitled to:
a. no compensation because it is a volunteer position.
b. medical benefits.
c. actual expenses plus a stipend for each day of service.
d. an annual salary.
c. actual expenses plus a stipend for each day of service.
Members of the real estate commission are to be reimbursed for their actual expenses and are eligible to receive a daily stipend for service. There is no annual salary or medical benefits.
The commission seal is used to authenticate:
a. The real estate commission’s proceedings and copies of papers used in court
b. An active license
c. All approved continuing education courses
d. The real estate commission’s approval to open a new broker’s trust account
a. the real estate commission’s proceedings and copies of papers used in court.
The real estate commission seal is used to authenticate its proceedings. All copies of paper documents thus duly
certified and authenticated can be received in evidence in all courts and are considered equal to the original.
A salesperson sold a property when she was actively working for a broker. She left the company, the broker refused to pay her when the transaction closed. She files a complaint with the real estate commission. In this case, the real estate commission will: a. order immediate payment. b. suspend the broker’s license. c. do nothing. d. hold a hearing after a 20-day notice.
c. do nothing.
The real estate commission is not authorized to hold hearings involving disputes over commissions between
brokers or salespeople.
Which of the following is a legal activity and NOT grounds for revoking a broker’s license?
a. Agreeing with a seller to accept more than the normal brokerage commission rate
b. Advertising in a newspaper that the brokerage firm is a member of the local MLS when in fact it is not
c. Depositing earnest money into the broker’s personal checking account
d. Being convicted of a felony
a. Agreeing with a seller to accept more than the normal brokerage commission rate.
Commission rates are always negotiable between the seller and the broker. The Iowa Real Estate Commission may revoke a broker’s license if the licensee has been convicted of a felony or found guilty of false advertising. Depositing earnest money into a personal checking account, rather than the required brokerage trust account, is prohibited.
To renew an Iowa real estate license to active status, a salesperson must:
a. complete 36 hours of commission-approved continuing education within the last three years.
b. be actively listing and selling real estate for others for a fee.
c. pay a $175 renewal fee.
d. complete 18 hours of commission-approved continuing education within the last three years.
a. complete 36 hours of commission-approved continuing education within the last three years.
To renew a license to active status in Iowa, licensees must take 36 hours of continuing education within the
preceding three years. The renewal fee is $125, and 18 hours is the maximum (of the 36 hours) permitted for
correspondence/home study education.
The Iowa Real Estate Commission may NOT undertake an investigation of a licensee based on:
a. its own initiative.
b. a motion from the members of the commission.
c. a written complaint submitted by a disgruntled client or customer.
d. a phone complaint from the public
d. a phone complaint from the public.
There must be some valid reason to undertake an investigation. Such a motivation can include the commission’s own initiative, a motion from the commission, or a written complaint from a consumer. Random selection can be done for errors and omissions (E&O) insurance and claimed education credits.
When the real estate commission sends a Notice of Hearing to a licensee, the notice does NOT include a:
a. statement that the licensee may bring legal counsel.
b. statement of the legal authority of the commission.
c. statement of the possible punishments.
d. reference to the involved statutes and rules.
c. statement of the possible punishments.
The commission does not forward a statement about the possible punishments. However, it does reference the fact that any party to a commission hearing has the right to have legal counsel present, the statutes and rules involved, and a statement of its legal authority to conduct the hearing.
The Iowa Real Estate Commission can investigate a licensee for all of the following EXCEPT:
a. a serious written complaint.
b. fraudulent representations.
c. use of untruthful statements in advertising.
d. professional competency.
d. professional competency.
The commission would not investigate a licensee for professional competency. However, they would investigate for professional incompetence as well as the use of untruthful statements in advertising. The commission can investigate a licensee upon its own motion or written complaints.
The real estate commission occasionally receives written complaints that lack clarity and, therefore, may be
refused a hearing. Which of the following is grounds for a hearing?
a. Revocation of any professional license
b. Lack of jurisdiction
c. Insufficient evidence
d. Triviality of the allegation
a. Revocation of any professional license
Revocation of any professional license held by a licensee in this state or any jurisdiction is grounds for a hearing. Lack of clarity on an issue, triviality of the complaint, insufficient evidence, an effort to resolve the problem on a local level, and lack of jurisdiction are all reasons for refusing to set a hearing by the real estate commission.
In the preparation of a real estate hearing, the power to execute and sign subpoenas that require the attendance
and testimony of any witness and the handover of any paper or books is given to the:
a. Real Estate Commission.
b. District Court.
c. Attorney General’s Office.
d. County Sheriffs Department.
a. real estate commission.
The Iowa Real Estate Commission has the power to execute and sign the necessary subpoenas for attendance and testimony of any witness and the producing of any paper or books.
Disobedience to a real estate commission subpoena is:
a. a fraudulent act.
b. a felony.
c. considered contempt of court.
d. subject to a $1,000 fine.
c. considered contempt of court.
Any failure to obey such an order may be punished as contempt of court.
The Iowa Real Estate Commission specifically will not get involved with a dispute over:
a. commissions between cooperating real estate firms.
b. the solicitation of an unexpired exclusive right-to-sell listing agreement.
c. the timely return of a salesperson’s license to the commission.
d. an offer that an owner’s agent failed to present.
a. commissions between cooperating real estate firms.
The rules specifically indicate that the Iowa Real Estate Commission will not get involved with disputes regarding commissions between cooperating real estate firms. The commission can get involved when an offer has not
been presented or someone else’s listing has been solicited, and over the timely return of a salesperson’s license to the commission.
A complaint was filed against a licensee. The commission has determined that a contested case hearing must be
held. How long before the hearing must the commission send a notice of the hearing along with a statement of
the charges?
a. 10 days
b. 30 days
c. 45 days
d. 20 days
d. 20 days
A written notice of hearing, together with a statement of the charges, must be mailed to the last known business
address of the licensee by certified mail at least 20 days before the hearing.
A licensee has received a notice of a hearing. The licensee must acknowledge receipt of the notice within:
a. 24 hours.
b. 30 days.
c. 10 days.
d. 5 days.
c. 1O days.
The licensee must respond to the written notice of a hearing within 10 days after receipt of the notice.
A complaint filed with the real estate commission:
a. must contain a concise statement of the facts.
b. must be supported with sworn statements.
c. may be made by telephone.
d. must be delivered by certified mail.
a. must contain a concise statement of the facts.
Complaints are made in writing and signed by the complainant with a concise statement of the facts. It may be personally delivered or delivered by regular mail to the executive secretary of the commission at the commission office. Sworn statements are made at the hearing.
Which of the following is TRUE regarding informal discussions conducted by the commission?
a. Legal Council’s presence is not permitted.
b. Attendance is mandatory.
c. It is held in an open session.
d. A licensee’s employing broker is always invited.
d. A licensee’s employing broker is always invited.
The disciplinary committee conducts informal, fact-finding discussions and requests the presence of both licensee and employing broker. The licensee and employing broker are not required to attend or participate, but if they elect to do so, legal council may represent them. All informal discussions are held in closed sessions.
The notice of a commission hearing does NOT include:
a. a statement requiring the respondent to acknowledge receipt of the notice.
b. a statement requiring the respondent to furnish the commission with a list of potential witnesses whom the
respondent intends to call.
c. the date, time, and place of the hearing.
d. authorized penalties that the commission may impose.
d. authorized penalties that the commission may impose.
The notice does not contain any information pertaining to the authorized penalties that the commission could
impose. The notice of the hearing will contain the date, time, and place of the hearing; a statement requiring the respondent to acknowledge receipt of the notice; a statement requiring the respondent to furnish place of the hearing; a statement requiring the respondent to acknowledge receipt of the notice; and a statement requiring the respondent to furnish the commission with a list of potential witnesses.
Which of the following factors are NOT among those which the commission may consider in determining the
nature and severity of disciplinary sanctions imposed against a licensee?
a. The relative seriousness of the violation as it relates to other real estate agents
b. The number of prior violations
c. The facts of the particular violation
d. The impact of a particular activity on the public
a. The relative seriousness of the violation as it relates to other real estate agents
In determining the nature and severity of disciplinary sanctions imposed against a licensee, the commission
does not consider the relative seriousness of the violation as it relates to other real estate agents. The commission’s purpose is to protect the public. They are concerned about the relative seriousness of the violation as it relates to assuring citizens that licensees maintain professional competency
Engaging in activities requiring a license while a license is inactive is a violation for which a is subject to all
penalties available to the commission and a civil penalty may be imposed in the amount of up to:
a. $2,500.
b. $500.
c. $1,500.
d. $2,000.
a. $2,500.
The civil penalty for engaging in activities requiring a license when a license is inactive is $2,500.
Which of the following is NOT a penalty available to the commission?
a. Probation
b. Additional education
c. 30 days in jail
d. A fine
c. 30 days in jail
The real estate commission has a number of penalties available, including suspension, revocation, additional
education, probation, and fines up to $2,500. Jail time is not an option.
A broker’s, corporation’s, or partnership’s license is suspended for two years. The licenses of the affiliated associate brokers and salespeople are:
a. returned to the commission and placed on inactive status.
b. automatically suspended for 30 days.
c. not impacted by the suspension.
d. revoked, subject to reinstatement after 30 days.
a. returned to the commission and placed on inactive status.
If the real estate company’s license is suspended or revoked, all the salespeople’s and associate brokers’ licenses are returned to the real estate commission and placed on inactive status until they are “hired” by a new broker.
Which of the following is legal and will NOT subject an owner-broker to disciplinary action?
a. Habitual intoxication
b. Noncompliance with errors and omissions insurance requirements
c. Use of improbable statements in advertisements
d. Soliciting agents from other real estate agencies
d. Soliciting agents from other real estate agencies
Soliciting agents from other real estate agencies is an ethical, not a legal, issue. The broker can get his or her
license suspended or revoked for improbable advertising , habitual intoxication, and not complying with the real estate commission errors and omissions insurance requirements.
A broker associate or salesperson who fails to keep the employing broker informed of her real estate- related
activities is subject to a maximum civil penalty of:
a. $500.
b. $100.
c. $2,000.
d. $2,500.
d. $2,500.
The maximum civil penalty in Iowa for failing to keep a broker informed is $2,500.
If a material error in an advertisement comes to the attention of the broker, the broker is required to take corrective measures within:
a. 10 calendar days.
b. 5 calendar days.
c. 3 calendar days.
d. 14 calendar days.
a. 10 calendar days.
The broker is required to ensure the accuracy of information and upon becoming aware of a material error must promptly take corrective measures within 1O calendar days.
During each three-year licensing period, a licensee may:
a. repeat a course if the course numbers and instructors are different.
b. take 36 hours of continuing education by correspondence.
c. take 24 hours of mandatory and 12 hours of approved, elective continuing education.
d. anytime within the three years take and pass the appropriate real estate exam in lieu of continuing education.
a. repeat a course if the course numbers and instructors are different.
Courses can be repeated if the course numbers and instructors are different. Licensing law only allows 18 hours of continuing education be taken by correspondence/home study. To remain an active licensee , 12 hours of mandatory and 24 hours of approved, elective continuing education are renewal requirements. In addition , the law allows a salesperson or broker to renew by passing the real estate exam within six months of renewal.
Successful completion of classroom continuing education requires:
a. signing in on an attendance sheet using the licensee’s license number.
b. passing an exam and full-time attendance.
c. full-time attendance throughout the course.
d. the passing of an examination.
c. full-time attendance throughout the course.
Successful completion of continuing education requires full-time attendance. Students who arrive late, leave during the class, or leave early may not receive certificates of completion . Continuing education courses may not require the passing of an examination or the signing of an attendance sheet.
A salesperson who failed to submit the required continuing education hours for license renewal may continue
with an inactive license in order to:
a. collect a commission on acts performed and which commission was earned prior to the license being placed
on inactive status.
b. help any existing client who had previously signed an agency agreement.
c. send a referral for a fee to an out-of-state real estate broker.
d. sell a family member a company listing.
a. collect a commission on acts performed and which commission was earned prior to the license being placed
on inactive status.
The inactive licensee is allowed to collect a commission on acts performed prior to his or her license being
placed on inactive status. Inactive licensees are precluded from engaging in any acts of real estate while their license is on file with the real estate commission.
The mission of the Iowa Real Estate Commission is to:
a. protect the public.
b. establish a standard commission rate.
c. approve purchase agreement forms.
d. regulate multiple listing services
a. protect the public.
The mission of the Commission is to protect the public through examination, licensing, and regulation of real
estate brokers, salespersons, and firms.
All of the following are requirements to become a licensed agent in Iowa EXCEPT:
a. being 18 years of age.
b. sending in an application without a photo.
c. being of good moral character.
d. being a U.S. citizen.
d. being a U.S. citizen.
An applicant is not ineligible because of their citizenship, sex, race, religion, marital status, or national origin.
A contested case hearing is scheduled for a broker charged with violating license law. The broker decides not to
go to the hearing on the scheduled date. In this case, the Commission will:
a. hold the hearing and the broker will be bound by the results.
b. reschedule one more time.
c. file contempt charges.
d. contact the Board of REALTORS® who will then take action.
a. hold the hearing and the broker will be bound by the results.
In the event a licensee fails to appear in person at the hearing, the Commission may proceed to conduct the
hearing and the licensee shall be bound by the results of such hearing to the same extent as if the licensee were
present.
How long does a licensee have to keep proof that they completed their required education to renew their license?
a. Five years after renewal
b. 30 days after renewal
c. Until the time of renewal
d. Three years after renewal
d. Three years after renewal
Iowa does not require proof of education when you renew your license, but they may do a random audit at any time within the three-year license term and the licensee must prove completion of all education requirements at that time.
After the first renewal, what mandatory courses are required by the Iowa Real Estate Commission to renew
either a salesperson’s or broker’s real estate license?
a. 8 hours of law update and 4 hours of ethics
b. 12 hours of professional development and ethics
c. 12 hours of fair housing
d. None of these
a. 8 hours of law update and 4 hours of ethics
Mandatory classes include eight hours of law update and four hours of ethics. The additional 24 hours of continuing education may include any commission-approved course. Twelve hours of professional development and ethics is mandatory for first renewal licensees but not for subsequent renewals. Fair housing is elective continuing education and is not mandatory.
Which situation completely satisfies the active license renewal continuing education requirements?
a. Completing a 12-hour course on using spreadsheet programs effectively in a real estate office that is offered
by a local community college
b. Taking a business law course that required 36 classroom hours
c. Retaking and passing the licensing exam within six months of renewal
d. Completing a 6-hour course on managing agricultural property that is offered by an approved continuing
education sponsor
c. Retaking and passing the licensing exam within six months of renewal
In Iowa, a licensee may retake and pass the appropriate license exam within six months of renewal in lieu of classroom continuing education requirements. Otherwise, the licensee must take 36 hours of continuing education to renew to active status. Twelve of the 36 required continuing education hours are on mandatory subject matter, and the remaining 24 are elective. Therefore, while the business law course may satisfy the elective
requirements for renewal, it fails the test for mandatory classes.
A licensee is audited to see if the licensee has met the renewal education requirement. If the licensee fails to
respond to the commission within 60 days, the commission will:
a. suspend the licensee.
b. schedule a hearing within 60 days.
c. fine the licensee $1,000.
d. place the license on inactive status.
d. place the license on inactive status.
The commission will place the license on inactive status. Subsequent to this action, the commission could later
conduct a hearing, suspend the licensee’s real estate activity, or fine a licensee up to $2,500.
On December 30, a licensee realizes that she has not taken the required continuing education course. If she
sends in the proper fee along with the application to renew January 1, the license:
a. is renewed on inactive status.
b. expires.
c. remains active for another 30 days.
d. is suspended.
a. is renewed on inactive status.
The Iowa Real Estate Commission allows a license to be renewed without the required continuing education, but
it can only be renewed to an inactive status.
After a candidate for a salesperson’s license has completed the required prelicensing education, the candidate must pass the state examination within: a. 3 months. b. 12 months. c. 6 months. d. 9 months.
b. 12 months.
A candidate for a license as a real estate salesperson must pass the state exam within 12 months after completi
ng the prelicensing education.
In order to receive a brokers license, an applicant must complete:
a. 72 hours of broker education.
b. 36 hours of broker education.
c. 60 hours of broker education.
d. a course in personal safety.
a. 72 hours of broker education.
An applicant for a broker license must complete 72 hours of broker education within 24 months of taking the
exam.
How long does a licensee have to keep proof of continuing education?
a. One year after renewal
b. Five years after renewal
c. Three years after they complete the course
d. Three years after renewal
d. Three years after renewal
All education documentation shall be retained for a period of three years after the date of renewal.
How many hours of continuing education may a licensee take online or home study?
a. None
b. 36
c. 12
d. 24
d. 24 hours
A maximum of 24 hours of continuing education may be taken by correspondence (online or home study).
Which action is legal and will NOT result in the broker having his license suspended or revoked?
a. Depositing earnest money into the broker’s personal checking account
b. Depositing $1200 for the maintenance of the broker’s trust account
c. Displaying a For Sale sign without the owner’s consent
d. Depositing cash from a buyer-client into the selling broker’s trust account and converting it into an earnest
money check to give to a cooperating listing broker
d. Deposit cash from a buyer-client into the selling broker’s trust account and converting it into an earnest
money check to give to a cooperating listing broker.
Depositing cash from a buyer- client into the selling firm’s trust account and then converting it into an earnest money check is required by Iowa code. This leaves a paper trail and protects both parties. A broker cannot legally place a client’s money into his or her personal checking account. The broker can commingle up to $800 for the maintenance of the trust account, but not $1,200. Displaying a For Sale sign without the owner’s consent is a violation of commission rules.
Every Iowa real estate office is required to:
a. keep transaction records for six years.
b. display company name signage at the office location.
c. employ at least one salesperson.
d. maintain trust account records for five years after the closing.
d. maintain trust account records for five years after the closing.
State law requires that brokers keep trust account and transaction records for at least five years. There is no
requirement that brokers display company name signage or that they employ a single salesperson. There are many one- person broker offices. Fair housing signage is required.
The commission has the power to revoke a salesperson’s license, if the salesperson:
a. singularly represents a buyer.
b. represents a real estate broker other than the salesperson’s employer with the employer’s consent.
c. enters into an exclusive-right-to-sell listing contract with a seller.
d. eeposits a tenant’s rental check in his or her own bank account and then writes a personal check to the
landlord.
d. deposits a tenant’s rental check in his or her own bank account and then writes a personal check to the landlord.
Depositing a tenant’s rental check into a salesperson’s personal bank account is the unlawful commingling of
personal and client’s funds. Unless permission is obtained in advance, a salesperson may represent only one broker. Buyers may be represented in today’s marketplace, and most real estate brokers prefer an exclusive right-to-sell listing agreement.
A real estate salesperson decides to sell her personal residence “by owner” without using any services of her
broker. The salesperson:
a. may deposit any earnest money into her personal checking account.
b. must deposit any earnest money into her broker’s trust account.
c. must use her broker’s phone number.
d. may collect a fee from the transaction.
a. may deposit any earnest money into her personal checking account.
The transaction must be totally “by owner,” with no commission being paid. The agent cannot function as a licensee in any capacity and cannot use her broker’s phone number. Only when acting in the capacity of an
agent during the sale of a personal residence or property are agents required to deposit earnest money into the broker’s trust account.
All funds received by a broker on behalf of his principal must be deposited in the trust account within five:
a. calendar days after obtaining all signatures.
b. banking days after receiving the offer.
c. calendar days after receiving an offer to purchase.
d. banking days after receiving all signatures.
d. banking days after receiving all signatures.
Other people’s money, such as earnest money and security deposits, must be deposited within five banking days after the final signature is obtained. Prior to obtaining the last signature, earnest money checks are normally held in the agent’s transaction file. If the offer is not accepted, the earnest money check is simply returned. It is imperative that the date of acceptance accompany the last signature.
A broker received an earnest money deposit from a buyer. Under Iowa law, the broker should:
a. deposit the earnest money into the broker’s business checking account.
b. hold the earnest money deposit in a secure place until the transaction closes.
c. deposit the money into an interest-bearing trust account that accrues interest to the state of Iowa.
d. open a separate interest-bearing trust account that benefits the seller.
c. deposit the money into an interest-bearing trust account that accrues interest to the state of Iowa.
Brokers are required by state law to deposit earnest money into interest-bearing trust accounts that accrue interest to the state of Iowa. A broker, with written authorization from both parties, may open a separate interest bearing trust account and pay the interest to either the buyer or the seller. The broker should never deposit earnest money into his or her business checking account; this type of commingling is illegal. It is also illegal to hold the earnest money deposit until the transaction closes
A broker received a buyer’s earnest money check for $5,000 and immediately cashed it. At closing, the broker
handed the seller a personal check drawn from the broker’s business account for $5,300, representing the original earnest money plus 6% interest. The broker:
a. should have deposited the money in the broker’s business account and kept the interest for maintaining
the account.
b. should have deposited the money in a special non-interest-bearing trust account.
c. should have deposited the money in an interest-bearing trust account where the interest is transferred quar
terly to the state treasurer.
d. acted properly by cashing the check and giving the interest to the seller
c. should have deposited the money in an interest-bearing trust account where the interest is transferred quarterly to the state treasurer.
In Iowa, real estate trust accounts must be interest bearing, and all interest earned is transferred quarterly to the treasurer of state. The state does allow the existence of a non-interest-bearing account for receipts from property management and/or rental transactions provided the account is separately maintained from the mandated interest-bearing trust account. A broker could never legally cash someone else’s check and place the money into his or her personal or business account. Additionally, it is illegal for a broker to be paid interest on monies held in trust for others.
If a broker establishes a trust account in an FDIC or NCUA institution to hold money belonging to others, which
of the following is TRUE?
a. All checks, deposit slips, and bank statements must include the word “trust” as part of the account name.
b. Accounts may be labeled either “trust” or “escrow.”
c. The account cannot be in the same bank as the broker’s personal checking account.
d. The account is non-interest-bearing.
a. All checks, deposit slips, and bank statements must include the word “trust” as part of the account name.
According to state law, no other word is allowed. There is no rule preventing a broker from using the same financial institution for personal banking and business banking. Other than a property management trust account,
the state of Iowa requires real estate trust accounts to be interest bearing.
A broker manages three individual rental units for one owner. One property is in need of emergency repairs, but
the individual trust account ledger on that unit shows that there is not enough money in the account to cover
repair costs. With permission from the owner, the broker transfers funds from one of the owner’s other accounts
to make the repairs. Which of the following is TRUE ?
a. The broker is allowed to borrow the funds from the trust account provided the general ledger balance re
mains in the black.
b. The broker must obtain the additional repair funds from the owner and not transfer them from one of the
owner’s other accounts.
c. The broker’s action was appropriate as long as the individual ledgers properly reflect the broker’s actions.
d. The additional repair costs must be covered by the broker and then billed to the owner.
c. The broker’s action was appropriate as long as the individual ledgers properly reflect the broker’s actions.
The broker is allowed to transfer funds from the same owner’s individual accounts but is not allowed to cover
excess repair costs with any of the general funds belonging to others. The reason for individual ledgers is to reconcile balances between them and the general ledger. In addition, it alerts a broker when funds are insufficient to cover the seller’s expenses.
If a broker is in doubt as to whether funds related to a transaction should be deposited in the trust account, the
broker should:
a. deposit the funds in the trust account.
b. deposit the funds in the broker’s business account.
c. contact the Iowa Real Estate Commission.
d. hold the funds until closing.
a. deposit the funds in the trust account.
Never commingle funds that belong to others into a business account. It is against state law to hold funds that belong to others; they must be deposited into the broker’s trust account within five banking days of the last signature.
Which ledger notifies the broker when money requested to be paid out of an account exceeds that which is in the account? a. General Ledger b. Deposit Ledger c. Checking Ledger d. Individual Ledger
d. Individual ledger
The individual ledger identifies every nickel in the account and readily identifies the problem of writing checks on limited funded accounts. The general ledger includes all accounts and allows the broker to reconcile the books by comparing the general ledger balance with the total of the individual ledger accounts.
Unless there is a written agreement to the contrary, the interest on the broker’s trust account is transferred quarterly to the:
a. buyer.
b. broker.
c. State of Iowa.
d. real estate commission.
c. state of Iowa.
Unless there is a written agreement to the contrary, the interest earned on the trust account is transferred on a
calendar-quarter basis to the state of Iowa. The broker may have the depository remit the interest directly, and
the amount remitted will be the amount of interest earned less any service charges for the maintenance of the account.
An Iowa broker must establish a trust account:
a. in an FDIC or NCUA financial institution located in Iowa.
b. identified as an “escrow” account.
c. located outside of Iowa.
d. and deposit funds immediately after receiving the funds.
a. in an FDIC or NCUA financial institution located in Iowa.
All trust accounts must be located in Iowa. A Swiss bank account or an offshore account would be an illegal place for a trust account. The account must be identified as a “trust” account, and funds must be deposited within five banking days after acceptance.
A broker pays utility payments, commissions, and salaries from the:
a. property management account.
b. business operating account.
c. personal checking account.
d. trust account.
b. business operating account.
The broker is not allowed to use the trust account as a business operating account or for personal uses. Commissions, salaries, related items, and normal business expenses are not to be disbursed directly from the trust account.
Concerning the release of earnest money, which situation is illegal and may result in the broker being disciplined?
a. A broker withholds a portion of the earnest money after a transaction fails to close to cover the commission
that has been earned.
b. An escrow agreement is created to distribute trust funds after a transaction closes.
c. After a buyer’s offer has been rejected, the earnest money check is returned to the buyer.
d. No funds are disbursed prior to the closing.
a. A broker withholds a portion of the earnest money after a transaction fails to close to cover the commission
that has been earned.
Under no circumstances is the broker entitled to withhold any portion of the earnest money when a transaction fails to consummate, even if a commission is earned. The broker must sue the appropriate party for any commission owed.
Upon the acceptance of his offer, a buyer instructs his dual agent to safeguard his earnest money check but not
to deposit it until the transaction closes. The broker must:
a. return the check to the buyer for safekeeping until closing.
b. turn the check over to the seller until closing.
c. deposit it in the broker’s trust account within five banking days after the final acceptance signature.
d. deposit it at least 5 days before closing.
c. deposit it in the broker’s trust account within five banking days after the final acceptance signature.
The law is clear: other people’s money must be deposited into a trust account within five banking days after the offer is accepted.
A broker lists a vacant parcel of land for $1O,000, and the owner of the property agrees to pay a 10% commission. The broker finds a buyer who submits, with a full price offer, an earnest money check for $1,000. At
closing, the seller tells the broker to keep the deposited earnest money in lieu of the 10% commission due to the
broker. In this situation, the broker:
a. must promptly withdraw the $1,000 and transfer it to the broker’s business account.
b. can keep the earned commission in the trust account until he needs to draw it out.
c. must get written permission from the Iowa Real Estate Commission to transfer the earned commission out of
the trust account.
d. is acting illegally because a broker is not allowed to transfer funds from the trust account to the business
account.
a. must promptly withdraw the $1,000 and transfer it to the broker’s business account.
The broker must promptly withdraw money held in the trust account that becomes due and payable to the broker. This situation does occur, and this procedure is a legal process.
Iowa’s replacement for title insurance is called:
a. title guard.
b. title replacement.
c. title guaranty.
d. title protection.
c. Title Guaranty.
The state of Iowa created a substitute for title insurance and markets it though the Iowa Finance Authority under
the name Title Guaranty Division. Title insurance origination is not authorized in Iowa. However, in order to sell mortgages on the secondary market, most investors require title insurance to protect their investments from a quiet title action.
When is a salesperson allowed to close a transaction?
a. With the consent of the buyer or seller
b. Under the supervision of the buyer’s accountant
c. Under no circumstances
d. Under the direct supervision or with permission of the listing broker
d. Under the direct supervision or with permission of the listing broker
Salespeople are not allowed to handle closings except under the direct supervision or consent of the employing
broker.
The listing broker authorizes the selling broker to handle the closing. Who is ultimately responsible for proper accounting? a. Selling broker b. Both listing and selling brokers c. Listing broker d. Abstract company
c. Listing broker
The listing broker is accountable for the closing even though another licensee may complete the closing. If an unlicensed escrow agent handles the closing and the escrow agent renders a closing statement, the listing broker must ensure that all funds are accounted for properly.
A buyer withdrew their offer before it was accepted . They gave a check as earnest money. When should they
expect to receive their money back?
a. Immediately
b. Within five banking days
c. Only with the seller’s written permission
d. Within 48 hours
a. Immediately
In the event that an offer is terminated for any reason, the earnest money must be returned immediately.
How much of a broker’s personal money may be kept in the company trust account?
a. As much as they want
b. Up to $5,000
c. Up to $1,000
d. None
c. Up to $1,000
A broker shall not commingle personal funds in a trust account; except, up to $1,000 which may be used by the
broker to pay expenses directly related to maintaining the trust account.
In Iowa, how long does a listing agreement last?
a. 3 days after closing
b. 30 days after an offer is accepted
c. Until closing
d. Until mutual agreement between the buyer and seller
c. Until closing
In Iowa, a listing lasts until closing of the transaction, mutual agreement of seller and broker, or expiration.
A buyer’s agent showed an outside firm’s listing that offered to pay the selling firm a 3% commission. The
buyer’s agent then presented an offer on the same property, demanding that the seller pay a 3.5% commission to
the selling firm. In this situation, the buyer’s agent’s demands are:
a. legitimate if a written buyer’s agency agreement has been signed.
b. okay with MLS approval.
c. illegal; commission proposals cannot be include in an offer to purchase.
d. only legitimate if the seller accepts the buyer’s terms.
c. illegal.
Commission proposals cannot be included in an offer to purchase. A real estate licensee is not allowed to induce
another to seek to alter, modify, or change another brokers listing without that licensee’s prior written consent.
Regardless of an agency agreement or the seller’s acceptance, it is unlawful to request a change in commission
without the listing agent’s authorization to do so. Without a warning of some kind, it might seem like extortion to
an unsuspecting seller’s agent.
Upon termination of employment with his broker, a salesperson asked a seller to cancel her listing and relist it
with the salesperson’s new broker. This activity is:
a. unlawful because the agent is not allowed to take listings with them.
b. lawful because the agent and the seller may cancel a listing.
c. lawful because listings belong to the listing agent.
d. unlawful because the agent was not a broker associate.
a. unlawful because the agent is not allowed to take listings with them.
Upon the termination of employment with a broker, agents are not allowed to take written listing agreements
secured during previous employment. Said listings remain the property of the previous broker and may only be canceled by the broker and the seller.
Which of the following is considered a legal action and is NOT a violation of law?
a. Advertising that those individuals attending a promotional presentation will receive a prize without
mentioning the requirement that they have to take a half-day trip to the new development site
b. Renewing errors and omissions (E&O) policies every three years
c. Placing a For Sale sign in front of a house after receiving written permission in the listing contract
d. Agreeing to reject an offer because the prospective buyer is of a different religious persuasion than the seller
c. Placing a For Sale sign in front of a house after receiving written permission in the listing contract
A broker must always have permission before erecting a sign. A broker may not encourage or agree to a negative
decision on religious grounds. A broker must make full disclosures of all conditions of a promotion, and except
for those who hold inactive licenses, Iowa code requires that E&O policies be renewed on an annual basis.
Buyer-brokerage agreements:
a. must be in writing to be enforceable.
b. must be on commission-specific forms.
c. are not regulated under Iowa license laws.
d. are illegal.
a. must be in writing to be enforceable.
The buyer-brokerage contract is an employment contract and must be in writing to be enforceable. Buyer-brokerage contracts are lawful and regulated, just as listing agreements are
In a dual agency situation, a broker may collect a commission from both the seller and the buyer if:
a. the broker does not disclose material adverse facts.
b. both parties are represented by attorneys.
c. both parties give prior written consent to such multiple paym ents.
d. the buyer and the seller are related by blood or marriage.
c. both parties give prior written consent to such multiple payments.
Both parties must give their informed written consent to dual compensation.
A salesperson who wishes to place a For Sale sign on a listed property must first:
a. obtain an exclusive-right-to-market contract.
b. obtain the consent of the property owner.
c. get permission from the municipality that owns the parking area between the sidewalk and the street.
d. get permission from the broker• obtain the consent of the property owner.
b. obtain the consent of the property owner.
After obtaining permission from the owner, the salesperson may erect a For Sale sign on the owner’s property. Permission to put up a For Sale sign can be written into any listing contract, but written permission isn’t a prerequisite under Iowa law. The local municipality may remove signs from municipal easements that create visual obstructions, but permission is not required from the municipality for sign placement. The broker gives her sales
personnel implied consent to put up For Sale signs, but only after permission is received from the owner to do so.
A consensual dual agent writes a $200,000 offer on a personally listed home at 1:00 pm. The dual agent then
calls the seller to set up an appointment to present the offer at 4:00 pm. Around 3:00 pm, an outside buyer’s
broker drops off an offer on the same property for $203,500. The listing company should:
a. call the owner and explain that two offers will be presented rather than just one.
b. present the first offer and then attempt to get a counteroffer for its buyer at the same price as the second
offer.
c. say nothing about the second offer unless the owner rejects the first $200,000 offer.
d. present the second offer for $203,500 first, and then, if it is rejected, inform the seller about the lower offer
for $200,000.
a. call the owner and explain that two offers will be presented rather than just one.
All offers must be presented promptly.
Three weeks before a person began his real estate prelicensing education, he offered to help a neighbor sell her
house. The neighbor agreed to pay the person a 5% commission. The neighbor accepted an offer while the person was taking the prelicensing class and closed the day before the person passed the examination. The neighbor
refused to pay the agreed commission. Can the person who passed the exam sue the neighbor for a commission?
a. No, the statute of frauds forbids recovery from an oral agreement.
b. Yes, the commission agreement is binding because the person was formally enrolled in a course of study
intended to result in a real estate license at the time an offer was procured and accepted .
c. No, state law prohibits any lawsuit to collect a commission, unless the injured party was a duly licensed
broker at the time of the alleged cause of action.
d. Yes, the person may sue his neighbor for breach of contract.
c. No, state law prohibits any lawsuit to collect a commission, unless the injured party was a duly licensed broker at the time of the alleged cause of action.
Only a broker can sue and collect commission. A broker may not allow unlicensed persons solicit listings. The
agent cannot sue because he did not have an active broker’s license at the time the agreement was reached and because the arrangement is illegal. The statute of frauds requires written contracts for the transfer of real estate but does not deal specifically with employment contracts.
Marketing real estate can be done in a variety of ways. However, Iowa prohibits:
a. the use of the internet.
b. telephone usage.
c. the selling of chances.
d. holding open houses.
c. selling of chances.
Lotteries and schemes involving the selling of chances are illegal in Iowa. Holding open houses, using the internet, and telephone usage are all legal ways to market real estate.
In Iowa, which of the following situations does NOT fall under the definition of real estate?
a. A tenant who signed a percentage lease agreement
b. Parking a car all day in a person’s yard to attend the state fair
c. Remaining in an apartment during a legal action for eviction
d. An easement by a utility company to repair gas lines
b. Parking a car all day in a person’s yard to attend the state fair
Parking a car in someone’s yard is considered a license and, as such, becomes a revocable privilege and does not rise to the level of a right. The definition of real estate includes rights, not privileges. A percentage-lease agreement acknowledges the rights of both landlord and tenant, and an easement gives the right to a utility company to enter the property for maintenance or replacement. A tenant has rights even during a legal action for eviction.
The listing agreement with a seller expired and the seller listed with a different brokerage firm. The original listing agent now has a buyer interested in the seller’s property. The original listing agent:
a. is a dual agent.
b. cannot disclose to the buyer information about the physical condition of the property.
c. cannot represent the buyer.
d. cannot disclose to the buyer offers received on the seller’s property while it was listed with that agent.
d. cannot disclose to the buyer offers received on the seller’s property while it was listed with that agent.
The original listing agent is now free to represent the buyer because the original agent no longer has an agency relationship with the seller. However, confidential information must remain confidential forever. Agents must always disclose information about the physical condition of the property.
A listing agent procured a ready, willing, and able buyer for his seller-client. The seller accepted the buyer’s
written offer, and then experienced a change of heart and withdrew her acceptance. In this situation, the listing
agent’s broker:
a. is out of luck because the transaction never closed.
b. may legally force the seller to sell to the buyer.
c. may retain the earnest money as commission earned.
d. can sue the seller for a commission.
d. can sue the seller for a commission.
The listing broker earned a commission because the broker did what he was hired to do: locate a ready, willing, and able buyer. The broker could legally sue the seller for payment. The buyer, not the broker, could legally sue the seller for performance. The earnest money must be returned to the buyer and may not be retained by the broker as commission earned.
The commission’s rules require that listing agreements:
a. must state the exact fee or percentage the broker will earn.
b. must be accompanied by a qualified expert’s report of the property’s condition.
c. be deliverd to a buyer before an offer is written.
d. last no more than 90 days.
a. must state the exact fee or percentage the broker will earn.
The listing agreement must state the exact fee the broker will earn (either a flat fee or a percentage). Additionally, the listing agreement must be in writing and have a definite expiration date. The listing does not have to be accompanied by a qualified expert’s report of the property condition. The seller must receive a copy of the listing agreement as soon as reasonably practical after the signature of the owner is obtained.
Listings based on a “net price” to the seller are:
a. legal in Iowa as long as the seller contractually agrees.
b. more profitable because no minimum is set on the amount of collectible commission.
c. illegal in Iowa regardless of agreement.
d. permissible with legal review.
c. illegal in Iowa regardless of agreement.
Net listings are illegal in Iowa because of the potential breach of agency to the seller-client. A conflict of interest exists any time an agent stops working in the best interest of his client. In the case of a net listing, an appearance of impropriety always exists because of the uncertainty of the selling price.
A seller signs a listing agreement with a broker. The agreement contains the following clause: “If the property
has not been sold after six months from the date of this signing, this agreement will automatically renew itself
for an additional six months.” Based on these facts, the agreement is:
a. legal because both parties agreed to the contract.
b. legal because the automatic renewal clause is less than one year.
c. illegal in Iowa because of the automatic renewal clause.
d. legal because it identifies a specific time limit.
c. illegal in Iowa because of the automatic renewal clause.
Listings must contain a definite termination date in Iowa. Automatic renewal periods of any duration are illegal
in Iowa. Both parties can agree to the contract, but the described contract is void because it lacks legality of
object
In a listing agreement, which of the following is legal?
a. Not specifying a rate of commission
b. Not giving a copy of the listing to the owner as soon as practical
c. Not including a broker’s protection clause
d. Not using a specific termination date
c. Not including a broker’s protection clause
State law does not address the issue of whether or not a broker should include a protection clause. All listings
in Iowa must specify a rate of commission and have a definite termination date. According to state law, the
seller must be given a copy of the listing as soon as practical.
Upon obtaining a listing, a broker or licensed salesperson is obligated to:
a. cooperate with every real estate office wishing to participate in the marketing of the listed property.
b. hold the open house.
c. give the seller a legible copy of the written listing agreement.
d. place advertisements on the internet.
c. give the seller a legible copy of the written listing agreement.
According to Iowa law, a licensee is obligated to give the seller a legible copy of the listing as soon as practical. There is no obligation to hold an open house or place a listing on the internet, although both of these are
very good marketing ideas. Any company can extend an invitation to cooperate; however, nothing requires a
competitor to accept such an overture.
Which of the following agreements is not a type of listing?
a. An exclusive-right-to-sell listing
b. An exclusive-right-to-buy agreement
c. A multiple listing
d. An open listing
c. A multiple listing
Multiple listing is not a type of listing. An exclusive-right-to sell, exclusive-right-to-buy, and open listing must be in writing, indicating termination date and commission rate. A multiple listing clause must be in writing in an exclusive listing.
In order to enforce a protective clause, the broker must:
a. provide the commission with a list of the protected names and addresses.
b. give protection lists to the seller within 72 hours of the expiration or withdrawal of the listing agreement.
c. review the protection clause before the listing expires.
d. define the protection period in the original listing agreement.
d. define the protection period in the original listing agreement.
The listing agreement and Iowa license law require a definite protection period spelled out in the original listing agreement. In order to enforce a protective clause, a list of the protected names and addresses must be given to the seller prior to the expiration or withdrawal of the listing. There is no 72-hour grace period to do so.
In a listing agreement, the protective clause protects the:
a. buyer.
b. closing agent.
c. seller.
d. listing broker.
d. listing broker.
The protective clause in a listing agreement protects the listing broker from the consumers who “wait out” the listing period to avoid paying a commission. The protective clause must be included in the original listing, so that the seller is aware of owing a commission if he sells to a buyer introduced during the listing.
If requested, and after the acceptance of an offer, a broker is required to furnish a detailed progress report to the buyer and/or the seller at: a. 15-day intervals. b. 45-day intervals. c. reasonable intervals. d. 60-day intervals.
c. reasonable intervals.
On demand by either party, the broker is required to furnish a detailed current statement at reasonable intervals until the transaction is closed.
Dual contracts for the sale of real property refer to:
a. one broker who obtains a listing agreement and then presents a purchase agreement of a buyer he or she has
been representing to the seller.
b. two accepted offers by the same buyer on the same property to deceive a lender as to the true sales price.
c. a first and a second mortgage on the same property.
d. two open listings on the same property.
b. two accepted offers by the same buyer on the same property to deceive a lender as to the true sales price.
Dual contracts are illegal in Iowa. Dual contracts refer to two or more written or oral contracts for purposes of
sale concerning the same parcel of real estate. One of the contracts is not made known to the prospective lender, so that the purchaser can obtain a larger loan than the true sale price would allow or so that the purchaser can qualify for a loan that she otherwise could not obtain.
A broker going out of business wants to sell his listings to another company and is:
a. eligible to sell them only to his agents.
b. not eligible to do so because the listings belong to the listing agent.
c. eligible to do so with the written consent of all parties to the listing agreement.
d. not eligible to do so because all listings must expire.
c. eligible to do so with the written consent of all parties to the listing agreement.
A listing agreement may not be assigned, sold, or otherwise transferred to another broker without the express written consent of all parties to the original agreement.
A flat-fee broker agreed to list a home for:
$3,000. The flat-fee broker does not offer compensation to outside brokers. An outside broker is working with a
buyer-client who wants to make an offer on the flat-fee broker’s listing. The buyer’s broker has signed a buyer’s
agreement that states that the buyer is obligated to pay a 3.5% finder’s fee. The buyer writes a full-price offer
and demands that the seller pay the additional 3.5% for the buyer’s commission obligation to the broker. In this
situation the:
a. buyer’s agent can call the seller directly and present his client’s offer.
b. buyer’s agent’s demands are legal.
c. buyer’s agent may not include any commission proposals in an offer to purchase.
d. buyer’s agent must call the listing agent and then present his client’s offer.
c. buyer’s agent may not include any commission proposals in an offer to purchase.
Once the parties to the listing agreement agree on a flat fee, no other licensee, other than the listing agent, is
allowed to attempt to alter, modify, or change the flat-fee arrangement. The commission amount in the “listing
agreement” may be modified with the written permission of all parties to the agreement. A commission split
between brokers should be a separate agreement between brokers and not include in an offer to purchase.
When must a broker remove a “For Sale” sign from a property after a transaction has closed?
a. Immediately upon closing
b. Within 10 calendar days of closing
c. Within 24 hours of closing
d. Upon written request
a. Immediately upon closing
A licensee shall make every reasonable effort to remove signs from a property after the transaction is closed unless permission of the new owner is obtained.
A listing broker may:
a. refuse to share his commission with other companies.
b. refuse to let other companies show his listings.
c. solicit other companies’ listed properties.
d. refuse to present offers from other companies.
a. refuse to share his commission with other companies.
A listing broker is not required to share commission with other companies, but cannot refuse to let other companies show their listings. A broker must promptly present all written offers.
In order to enforce a protective clause, the list of buyers to be protected must be given to the seller:
a. within 24 hours of expiration.
b. within five calendar days of expiration.
c. before the listing expires.
d. at the time of listing.
c. before the listing expires.
To enforce a protective clause, the broker must
deliver the names and contact information of buyers to the seller before the listing expires via personal delivery
or registered/certified mail (return receipt requested).
A broker takes a listing in which the broker gets to keep, as commission, any money in excess of a net amount
the seller wants at closing. This type of listing:
a. is alright as long as it does not exceed $5,000.
b. can be done verbally.
c. is illegal in Iowa.
d. is alright only if it is not a co-op sale with another company.
c. is illegal in Iowa.
Net listings are illegal in Iowa.
An owner who has her home listed with one broker contacts an agent of another company to discuss listing her
property when her current listing expires. The agent should:
a. try to enter into a listing agreement that starts after the expiration of the seller’s current listing.
b. refuse to talk to the sellers.
c. contact the listing broker to co-list the property.
d. get permission from the listing broker to talk
a. try to enter into a listing agreement that starts after the expiration of the seller’s current listing.
If the owner initiates the discussion, the licensee may negotiate and enter into a listing or brokerage agreement that will take effect after the expiration of the current listing.
A buyer’s agent writes an offer on another company’s listing. The listing company:
a. can refuse to have the buyer’s agent present when the offer is presented to the seller.
b. can refuse to present the offer if the buyer does not want to give any earnest money.
c. must allow the buyer’s agent to be present when the offer is presented to the seller.
d. can decline to present the offer if they think the price is too low.
c. must allow the buyer’s agent to be present when the offer is presented to the seller.
A listing agent must allow a buyer’s agent to be present when an offer is presented unless the seller provides
written instruction otherwise.
In order for a broker to receive compensation in a real estate transaction, the broker must have:
a. an office in a commercially-zoned area.
b. a signed brokerage agreement.
c. an agency agreement.
d. at least one salesperson.
b. a signed brokerage agreement.
In order to collect compensation, a broker must have a signed brokerage with a buyer, seller, landlord, or tenant.
An agency agreement does not obligate a party to pay compensation.
If a “subject to sale” offer has been accepted but the subject property does not sell within the agreed time frame,
the earnest money is normally:
a. kept in the agent’s file and used on the next offer.
b. returned to the buyer after the seller and buyer sign an earnest money release form.
c. returned to the buyer immediately.
d. forfeited by the buyer to the seller.
b. returned to the buyer after the seller and buyer sign an earnest money release form.
Earnest money must be kept in the trust account until all parties agree in writing to its disbursement.
A real estate broker signed an agency agreement with a tenant who was looking for a building to lease. The
broker did not charge a fee to the prospective tenant because he customarily asks landlords to pay the commission. The broker tells a landlord that the prospective tenant could probably pay a somewhat higher rent than the
landlord is asking. Which statement is TRUE?
a. The broker’s disclosure to the landlord was appropriate because of the blanket offer of subagency through
the MLS.
b. The broker’s disclosure violated the statutory fiduciary duties owed to the tenant.
c. The broker owes the duties of agency to the landlord because of the payment of the commission.
d. Because the broker is not charging a fee to the prospective tenants, the broker is not really representing
them.
b. The broker’s disclosure violated the statutory fiduciary duties owed to the tenant.
The licensee’s disclosure violated the confidentiality owed to a tenant. Delegated authority and consent to act
determines representation, not who pays the commission. Payment of compensation under license law is not construed to determine or establish an agency relationship. In addition, under Iowa code it is unlawful to extend an offer of subagency through the MLS.
A real estate agent entered into an appointed agency agreement with both a seller and a buyer. If the buyer is
now interested in making an offer on the seller’s property, can this occur?
a. Yes, as long as written appointed agency agreements have been entered into with both parties.
b. Yes, if the seller has agreed to pay the commission.
c. No, because the real estate agent would become a dual agent.
d. Yes, if both the buyer and seller give their written consent to dual agency.
d. Yes, if both the buyer and seller give their written consent to dual agency.
If both parties agree in writing, then the agent can represent both sides of the transaction as a consensual dual agent. Consensual dual agency is allowed in Iowa. Note that even though appointed agency agreements have been signed by both parties, in order to be legal, both must also sign a consensual dual agency agreement.
A broker entered into a listing agreement with a seller. Another broker, working with a buyer, learned about the
property through the MLS. The cooperating broker would represent the:
a. buyer as a subagent.
b. buyer as a nonclient.
c. buyer as an agent.
d. seller as a subagent.
c. buyer as an agent.
A salesperson who takes a buyer to see another company’s listing is typically working as a buyer’s agent. The possibility exists that the buyer is a nonclient, but in this scenario, there is no information to suggest this arrangement.
A broker can extend all of the following through the MLS EXCEPT:
a. cooperation.
b. referrals.
c. subagency
d. compensation
c. subagency.
Cooperation, compensation, and referrals are readily extended by brokers in most MLS communities. Subagency cannot be offered through an MLS service.
A salesperson’s license was revoked for representing two parties in a single transaction without the knowledge
of both. If the employing broker clearly instructed all agents regarding the company’s written duel agency policy’s and did not have any guilty knowledge and did not conspire to cover up the incident, the commission will:
a. revoke the employing broker’s license.
b. fine the broker for failure to supervise.
c. neither suspend nor revoke the broker’s license.
d. suspend the employing broker’s license.
c. neither suspend nor revoke the broker’s license.
Any unlawful act by a broker’s agent is not cause for the revocation of the broker’s license, unless the commission finds that the broker had guilty knowledge of the unlawful act or violation or was not properly supervising the agents.
A broker accepts a referral fee from an abstracting company for sending them the seller’s business. The broker
then collects a commission from his seller-client on the same transaction . This action is:
a. not permitted for any reason .
b. permitted as long as the broker discloses the accepted fee to the seller in writing.
c. okay as long as the broker doesn’t tell the seller.
d. permitted as long as the seller has received verbal notice from the broker.
b. permitted as long as the broker discloses the accepted fee to the seller in writing.
In providing brokerage services, a licensee is not allowed to accept referral fees unless the licensee provides written notice to their client of the transaction that compensation will be accepted by the licensee from such person.
A prospective buyer is interested in seeing a house listed with a real estate company. The agent has not disclosed his company’s agency policy. The listing agent can show the buyer the house if the:
a. seller leaves during the showing.
b. salesperson provides the buyer with a consensual dual agency form.
c. salesperson does not ask any questions of a confidential nature.
d. buyer verbally agrees to buyer agency.
c. salesperson does not ask any questions of a confidential nature.
No discussion of agency is required until questions of a confidential nature are entertained. Neither buyer
agency nor consensual dual agency is necessary because a buyer does not have to be represented.
A salesperson represents a seller in a transaction, but prospective buyers ask to look at the property. The salesperson must:
a. tell the buyers that they must first enter into a buyer representation agreement with another licensee.
b. show the buyers the property without making any disclosures about the salesperson’s relationship with the seller.
c. inform the buyers that the real estate company represents the seller’s interest.
d. inform the buyers that they have to consent to dual agency.
c. inform the buyers that the real estate company represents the seller’s interest.
Informing the buyers about the company’s relationship with the seller must be made so that the buyers understand that they are not being represented. Buyers do not have to be represented, nor do they have to agree to dual agency relationships.
When a broker gives a listing presentation, a discussion about agency must be made to the seller:
a. at the beginning of their first personal meeting.
b. during the time ministerial acts are provided.
c. at the time of specific assistance.
d. immediately after the listing agreement is signed.
c. at the time of specific assistance.
Agency must be discussed with the seller prior to the listing presentation . Regardless of the time spent with a seller during a listing presentation, an agent must discuss agency during the time of specific assistance. Specific assistance means eliciting or accepting from the seller the motivation for wanting to sell his or her equity position in the house. Ministerial acts do not require a discussion of agency.
A written, appointed agency agreement with a seller must be determined, and all necessary forms must be
executed:
a. at any time after a purchase and sale agreement is executed by the parties.
b. no later than the closing.
c. prior to entering into a listing agreement.
d. at the time specific assistance.
c. prior to entering into a listing agreement.
The brokerage’s written, appointed agency relationship with a seller must be determined and all necessary
agreements executed prior to taking a listing agreement. A written form is also required prior to an offer being
made or accepted by any party to the transaction.
If a salesperson receives a referral fee from a lender for the referral of a buyer-client, the salesperson:
a. has fulfilled the fiduciary duty of reasonable care.
b. has done nothing wrong as long as the salesperson’s broker is aware of the stipend.
c. is in violation of Iowa law and can be fined up to $5,000.
d. has not acted in the best interest of the public, and receiving the fee constitutes a violation of Iowa code.
d. has not acted in the best interest of the public, and receiving the fee constitutes a violation of Iowa code.
Regardless of whether the broker is aware of the practice or not, a salesperson in Iowa cannot legally receive referral fees from a lender. This practice is a violation of a salesperson’s fiduciary duty to a buyer-client. This practice also drives up the cost of loans, and the higher costs are often passed on to the consumer. The maximum real estate fine is $2,500.
If a salesperson acts solely for a seller-client in a real estate transaction to the exclusion of everyone else in his brokerage agency, the salesperson is: a. a consensual dual agent. b. a subagent. c. a designated agent. d. an appointed agent.
d. an appointed agent.
An appointed agent is appointed by a designated broker to act solely for a client to the exclusion of the other affiliated licensees of that brokerage agency. A consensual dual agent by definition would represent two people, while under subagency a subagent could be an agent to any number of sellers.
Which of the following duties does a licensee have to all parties in a transaction?
a. Providing brokerage services honestly and in good faith
b. Providing home inspection services
c. Disclosing all facts that the licensee knows about the transaction
d. Providing investment opportunities for money held in escrow
a. Providing brokerage services honestly and in good faith
Honesty and working in good faith, as well as reasonable skill and care, are required of licensees in all transactions. The licensee is not obligated to disclose all facts, but disclosing all material facts except those that are already known or could have been discovered through a reasonable inspection is also required. Providing investment opportunities is not a duty owed to all parties in a real estate transaction.
A real estate company has legally entered into a consensual dual agency agreement with both a seller and buyer.
The company salesperson working with the buyer may legally:
a. disclose to the buyer what the seller’s motivating factors are for moving.
b. provide comparable market data about the seller’s property to the buyer.
c. provide the buyer’s financial qualifications to the seller.
d. disclose to the seller that the buyer will pay more than the offering price.
b. provide comparable market data about the seller’s property to the buyer.
Under consensual dual agency, the salesperson may provide comparable market data to the buyer. However, a consensual dual agent may not disclose the buyer’s financial qualifications to the seller or disclose to the buyer the seller’s motivation for selling. A consensual dual agent may not disclose to the seller that a buyer would pay more than the offering price as well.
An appointed agent is working for a buyer-client who desires to purchase a house listed by another appointed
agent from the same office. Which statement concerning any additional agency disclosures is TRUE?
a. The seller and the buyer must be informed of the situation and agree to a consensual dual agency
arrangement.
b. The buyer’s appointed agency status must be changed to that of a nonclient in order to purchase the
house.
c. If the appointed listing salesperson and the appointed selling salesperson are two different people, no
additional disclosure is required.
d. The buyer’s agent should refer the buyer to another brokerage firm to negotiate the sale.
c. If the appointed listing salesperson and the appointed selling salesperson are two different people, no additional disclosure is required.
As long as the appointed buyer’s agent isn’t the listing agent, consensual dual agency isn’t an issue. Under designated (appointed) brokerage, the broker appoints agents within the sales office to represent sellers or buyers singularly to the exclusion of every other salesperson in the firm. State law permits consensual dual agency and working with a buyer as a nonclient; therefore, referring a buyer to another brokerage firm isn’t necessary or practical.
Which of the following rises to the level of specific assistance?
a. Attending an open house and responding to customer questions
b. Establishing a listing price range with a seller
c. Responding to telephone inquiries from a consumer concerning the price or location of property
d. Responding to telephone inquiries by consumers as to the pricing of brokerage services
b. Establishing a listing price range with a seller
Establishing a listing price range requires communication beyond casual conversations and should be considered specific assistance. Responding to telephone inquiries concerning brokerage prices, locations, and prices of
properties, as well as responding to customer questions at an open house, are all ministerial acts.
Which of the following is an example of a ministerial act?
a. Responding to general questions about the price and location of specific property
b. Qualifying buyers to determine their buying power
c. Arguing the merits of an offer on behalf of a prospective buyer
d. Assisting a buyer through the closing
a. Responding to general questions about the price and location of specific property
Generally, reciting published information, such as price and location of a specific property, is considered ministerial and may be performed without any discussion of agency. However, agency disclosure is required before working directly with buyers, helping them determine their buying power, and negotiating and assisting in the closing process. These are examples of providing specific assistance and require a discussion of agency before the licensee solicits or obtains confidential information.
A real estate salesperson has been working with a couple to purchase a home. After helping them negotiate for
their home, the buyers ask the salesperson if she can help them secure a mortgage. The salesperson knows a
lender that pays a fee for referring buyers to the lender. Should the salesperson refer the buyers to this lender?
a. Yes, if the salesperson and the buyers have a written buyer agency agreement.
b. No, unless the salesperson discloses the referral fee to the buyers.
c. Yes, if only the buyer is seeking a conventional loan.
d. No, because acceptance of a fee from a lender would be in violation of Iowa code.
d. No because acceptance of a fee from a lender would be in violation of Iowa code.
It is not in the best interest of the public and is a violation of Iowa code to accept a referral fee from a lender. In
addition, salespeople can only receive compensation from their employing brokers.
A licensed salesperson obtains a listing. Several days later, the salesperson meets a prospective buyer at the
property and tells her, “I am the listing agent for this property and I’m very familiar with it. Would you like to
make another offer?” The agent then writes up an offer for these buyers. Under these circumstances, the salesperson has:
a. not yet properly disclosed his agency relationship with the buyer.
b. created an undisclosed dual agency relationship.
c. created an appointed agency agreement with the buyer.
d. legally disclosed his agency obligations.
a. not yet properly disclosed his agency relationship with the buyer.
Agency representation is not about the property, but rather the duties and obligations to a client and a customer. The buyer does not know what her relationship is with the brokerage firm until the salesperson explains it to her. The salesperson has a legal obligation to discuss agency with the buyer prior to providing specific assistance or writing an offer. Although the creation of an undisclosed dual agency relationship is a possibility, nothing in the question suggests that “delegated authority or consent to act” has taken place between the salesperson and the
buyer.
Asking a seller about her motivation for wanting to sell is called:
a. a ministerial act.
b. general conversation.
c. specific assistance.
d. an inquiry
c. specific assistance.
Specific assistance is defined as eliciting or accepting confidential information about a party’s real estate needs, motivation, or financial qualifications.
Which of the following is NOT considered specific assistance?
a. Asking a buyer how much he or she has for a down payment
b. Discussing a buyer’s price range
c. Describing the benefits you could provide as an agent
d. Asking if the buyer has been recently transferred to town
c. Describing the benefits you could provide as an agent.
Specific assistance is any communication beyond casual conservation, such as price range, motives, and financial information. Company agency policy disclosure is required before providing specific assistance.
A buyer contacts a real estate office and indicates an interest in purchasing one of the office’s listings. Without
formally disclosing his company’s agency policy, the listing agent can do all of the following EXCEPT:
a. give the buyer information on mortgage interest rates and terms.
b. provide the buyer with information on other properties for sale in the area.
c. explain to the buyer how consensual dual agency relationships work.
d. prequalify.
d. prequalify the buyer for a mortgage.
A salesperson is prohibited from asking questions of a confidential nature without first entering into a buyer
agency agreement. Prequalifying the buyer for a mortgage requires asking questions of a confidential nature, and the agent cannot work to obtain this information without first disclosing the company’s agency policy. A salesperson working with a buyer can provide ministerial acts, such as providing information about other properties, mortgage rates, and explanations of the various agency relationships.
A broker took a listing for a small office building. Because the property was in excellent condition and produced
a good, steady income, the broker’s salesperson decided to purchase it as an investment. If the salesperson actually purchased this property, the salesperson must:
a. require the seller to enter into a dual agency agreement.
b. inform the owner verbally that the salesperson is a licensee before providing specific assistance and in
writing before making an offer.
c. have a third party purchase the property on the salesperson’s behalf.
d. ask her broker to cancel the listing and then make an offer to purchase.
b. Inform the owner verbally that the salesperson is a licensee before providing specific assistance and in writing before making an offer.
The salesperson must inform the owner verbally that the salesperson is a licensee before providing specific assistance and in writing before making an offer. The salesperson does not have to resign, use a third party, or require the seller to enter into a dual agency agreement. Dual agency must be consensual; it may not be required.
Written agency agreements must be given to prospective purchasers and/or tenants:
a. during the performance of any material acts.
b. when responding to questions about the property during an open house.
c. before showing them any property.
d. before any offers to purchase or lease are prepared or presented.
d. before any offers to purchase or lease are prepared or presented.
Commission rule requires agency relationships be discussed at the time of specific assistance (asking questions of a confidential nature). However, written agency agreements are not required until the time prior to an offer being made or accepted by any party to the transaction and acknowledged by separate signatures of all the parties.
The purpose of homestead is to:
a. protect a person’s equity in her home.
b. ensure the payment of property taxes, claims, and liens.
c. protect spouses against disinheritance .
d. permit a surviving spouse to retain the home.
a. protect a person’s equity in her home.
The purpose of homestead is to protect a person’s equity (up to $4,850) in her home.
After listing a property, the agent refers the sellers to a home cleaning company that the agent has an ownership
interest in. In this situation, the agent:
a. has broken the law.
b. must refer the sellers to a different cleaning company.
c. should disclose the agent’s ownership and financial interest in the cleaning company.
d. would be entering into a tying agreement.
c. should disclose the agent’s ownership and financial interest in the cleaning company.
This practice is alright as long as the agent has disclosed their relationship to the company to which they are
referring their client.
A broker that offers appointed agency must:
a. have procedures in place that prohibit agents from sharing a client’s confidential information with other
agents in their office.
b. include a protective clause in all listings.
c. have the same commission splits with all companies on the MLS.
d. be the seller’s agent for all the properties they have listed.
a. have procedures in place that prohibit agents from sharing a client’s confidential information with other
agents in their office.
A broker who has an appointed agency policy must implement procedures intended to prevent mishandling of confidential information within their office.
