Iowa Agency Law: Complete Guide for the Real Estate Exam

Iowa's agency law is one of the most frequently tested state-specific topics on the Iowa PSI exam. Iowa stands out nationally for its mandatory written buyer agency agreement requirement — a rule that catches many candidates by surprise.

Iowa's Mandatory Written Buyer Agency Agreement

Iowa law requires a licensed salesperson or broker to have a written buyer agency agreement signed before they begin working with a buyer. This is not optional and is not merely recommended — it is a legal requirement.

Key points: - Must be in writing and signed by both parties - Required before the agent begins providing services to the buyer (showing homes, submitting offers, etc.) - Failure to obtain a written agreement before working with a buyer is a violation of Iowa law - The agreement defines the scope of representation, compensation, and termination rights

This rule is uniquely Iowa. Most other states recommend written buyer agreements but do not legally require them before any work begins. On the Iowa state exam, expect this to appear in scenario-based questions.

Agency Relationships in Iowa

Seller's Agency The listing agent represents the seller and owes full fiduciary duties: loyalty, confidentiality, obedience, disclosure, accounting, and reasonable care (LCODAR).

Buyer's Agency The buyer's agent represents the buyer with full fiduciary duties. Must be established via written agreement before services begin.

Dual Agency When one licensee or brokerage represents both buyer and seller in the same transaction. Iowa law requires: - Written disclosure to both parties - Informed consent from both parties - Limitations on confidential information sharing

Designated Agency One agent in the firm represents the buyer; another represents the seller. The managing broker may serve as the dual agent while designated agents provide full representation to each client.

Non-Agency / Transaction Facilitator Some Iowa licensees may operate as facilitators without fiduciary duties to either party. Basic honesty and disclosure of material defects are still required.

Agency Disclosure Requirements

Iowa law requires licensees to disclose their agency relationship at first substantive contact with a consumer. Disclosure must be in writing and must occur before any confidential information is exchanged.

The disclosure must identify: - Who the agent represents - What duties are owed to that party - What duties are owed to the other party

Duties to Clients vs. Customers

| | Client (represented party) | Customer (non-represented party) | |--|---------------------------|----------------------------------| | Fiduciary duty | Yes | No | | Loyalty | Yes | No | | Confidentiality | Yes | No | | Honest dealing | Yes | Yes | | Disclosure of material defects | Yes | Yes |

Common Exam Scenarios

Scenario: An Iowa agent shows a buyer three homes before obtaining a signed buyer agency agreement. The buyer submits an offer on the third home. Has the agent violated Iowa law?

Answer: Yes. Iowa law requires the written buyer agency agreement before any services are provided, including showings. The agent is in violation.

Scenario: A buyer's agent learns that their buyer is willing to pay $10,000 over asking price if needed. Can the agent share this with the seller?

Answer: No. This is confidential buyer information protected by the fiduciary duty of confidentiality.

Practice Iowa agency law questions at [CARealestate.com/states/iowa](https://carealestate.com/states/iowa).