Free Iowa Real Estate Practice Exam

Q1.A large Iowa brokerage has a listing on a property, and one of its other salespersons has a buyer who is interested in that property. Rather than entering into dual agency, the broker designates one salesperson to represent only the seller and a different salesperson to represent only the buyer. Under Iowa Code Chapter 543B, this arrangement is known as:

• A.Disclosed dual agency
• B.Subagency
• C.Designated agency
• D.Transactional brokerage

Q2.A seller breaches a purchase contract by refusing to convey the property after all contingencies have been satisfied. Under contract law principles, which remedy would most likely provide the buyer with the actual property they contracted to purchase?

• A.Specific performance requiring the seller to complete the sale as agreed
• B.Monetary damages equal to the difference between contract price and current market value
• C.Rescission of the contract with return of earnest money
• D.Liquidated damages as specified in the purchase agreement

Q3.When screening potential tenants, which practice would violate the Equal Credit Opportunity Act (ECOA) as applied to rental housing decisions?

• A.Requesting employment verification from all applicants
• B.Requiring a co-signer for applicants with insufficient income
• C.Checking credit reports with written authorization
• D.Asking about an applicant's marital status to determine household composition

Q4.Under the Truth in Lending Act (TILA), when must a lender provide the initial Truth in Lending disclosure to a mortgage applicant?

• A.Within 3 business days of receiving a completed application
• B.Within 7 business days of loan closing
• C.At the time the loan application is submitted
• D.Within 30 days of loan approval

Q5.To protect against wire fraud at closing, a best-practice approach is to:

• A.Send wiring instructions via text message instead of email
• B.Use only cashier's checks for all transactions above $10,000
• C.Request that the title company encrypt all emails with a password
• D.Verbally confirm wiring instructions by phone using a number independently obtained — not one from the email

Q6.After initially obtaining an Iowa salesperson license, how often must the licensee renew their license, and what continuing education is required for renewal under Iowa Code Chapter 543B?

• A.Annually, with no continuing education required for salespersons in their first renewal period
• B.Every three years, with 36 hours of Iowa-approved continuing education required
• C.Every two years, with 36 hours of Iowa-approved continuing education required for renewal
• D.Every two years, with 15 hours of continuing education required only in even-numbered years

Q7.Under Arizona contract law, what is the legal effect of a counteroffer on the original offer?

• A.The original offer remains open until the buyer explicitly withdraws it
• B.The counteroffer is merely a modification — the original offer stays alive as a fallback
• C.The counteroffer operates as a rejection of the original offer and creates a new offer from the seller
• D.The counteroffer extends the original offer's expiration date automatically by 48 hours

Q8.Which Iowa state agency is primarily responsible for receiving, investigating, and adjudicating housing discrimination complaints filed under the Iowa Civil Rights Act?

• A.Iowa Real Estate Commission
• B.Iowa Civil Rights Commission
• C.Iowa Department of Inspections, Appeals, and Licensing
• D.Iowa Attorney General's Office

Q9.A broker's written company policy designates all buyer clients as 'customers' rather than 'clients' unless a separate buyer representation agreement is signed. A salesperson affiliated with the firm verbally promises a prospective buyer, 'I will negotiate the best possible price for you and protect your interests.' No written buyer representation agreement is ever executed. At closing, the buyer learns the salesperson withheld a seller concession that would have benefited the buyer. Under agency law, which doctrine MOST directly supports the buyer's claim against the broker?

• A.Respondeat superior based solely on the written company policy designating buyers as customers, which negates any agency duty.
• B.Ostensible (apparent) agency and the non-delegable supervisory duty of the broker, because the salesperson's representations created an agency by estoppel and the broker is responsible for supervising and preventing unauthorized agency representations.
• C.The parol evidence rule bars any claim based on verbal promises where the written company policy expressly limits buyer relationships to customer status.
• D.The buyer has no claim because RESPA's affiliated business arrangement disclosure requirements govern the salesperson's conduct in this situation.

Q10.Under most Arizona listing agreements, when is the real estate commission considered 'earned'?

• A.When the listing agreement is signed by both parties
• B.When the seller accepts a ready, willing, and able buyer by executing the purchase contract
• C.When the transaction closes and the deed is recorded
• D.When the buyer submits an offer at full list price

Q11.A broker operates a branch office and assigns a newly licensed salesperson as the sole representative for a buyer in a complex commercial acquisition involving environmental due diligence, a 1031 exchange, and seller financing. The salesperson lacks experience in any of these areas. The transaction collapses after the salesperson fails to timely invoke the environmental contingency, costing the buyer the earnest money deposit. The buyer sues the broker. Under broker supervision law and agency principles, which theory provides the STRONGEST basis for the broker's liability?

• A.Strict liability under CERCLA for the salesperson's failure to conduct environmental due diligence on the buyer's behalf.
• B.The broker's non-delegable supervisory duty, negligent assignment of an inexperienced licensee to a transaction beyond the salesperson's competence, and vicarious liability under respondeat superior for the salesperson's negligent failure to exercise a contractual contingency within scope of employment.
• C.The broker has no liability because the buyer signed a buyer representation agreement acknowledging the salesperson would be handling the transaction.
• D.Contributory negligence by the buyer for hiring a brokerage without independently verifying the salesperson's experience, which completely bars recovery against the broker.

Q12.Under Iowa Code Chapter 543B, which statement about a broker's trust account is CORRECT?

• A.A broker may deposit personal funds into the trust account in any amount to cover bank service charges
• B.A broker may maintain a small, reasonable amount of personal funds in the trust account solely to cover bank service charges, but no more than is reasonably necessary for that purpose
• C.Trust accounts must always be interest-bearing and the interest must be paid to the client
• D.A broker is not required to maintain a trust account if all transactions in the past year were cash sales with no earnest money

Q13.Which of the following activities would require a real estate license under Iowa Code Chapter 543B?

• A.A homeowner selling their own primary residence without the assistance of a licensee
• B.A trustee selling real property as part of the administration of a court-supervised trust
• C.A licensed auctioneer who, in the regular course of their auction business, auctions real estate for others for compensation
• D.A resident manager of an apartment complex who rents units in the building where they reside

Q14.A disabled Iowa tenant requests that her landlord allow her to install grab bars in the bathroom of her rented unit at her own expense. The landlord refuses, stating that the lease prohibits modifications. Under the Iowa Civil Rights Act and the federal Fair Housing Act, the landlord's refusal is most likely:

• A.Lawful, because the lease terms govern all modifications to the property
• B.Unlawful, because landlords must permit reasonable modifications for disabled tenants, though the tenant may be required to restore the property upon vacating
• C.Lawful, because the modification permanently alters the structural integrity of the unit
• D.Unlawful, because the landlord must pay for all accessibility modifications under the Iowa Civil Rights Act

Q15.Iowa Administrative Code 193E—11.3 governs broker supervision of affiliated licensees. A principal broker discovers that one of her affiliated salespersons has been advising buyers on investment tax strategies without a CPA license. Under Iowa statutory requirements, which broker obligation is most directly implicated?

• A.The broker's duty to carry sufficient errors-and-omissions insurance to cover tax advice claims made against the salesperson.
• B.The broker's supervisory duty to ensure affiliated licensees practice only within the scope of a real estate license and do not engage in unauthorized practice of law or other professions.
• C.The broker's obligation to file a written complaint with the Iowa Department of Revenue within 10 business days of discovering the conduct.
• D.The broker's duty to immediately revoke the salesperson's independent contractor agreement and report the conduct to the IRS.