Iowa Real Estate Practice Exam
(Free Questions & Answers)

Explanation

The Iowa Real Estate Commission (IREC), a division of the Iowa Department of Commerce, is responsible for licensing and regulating real estate brokers and salespersons in Iowa.

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Iowa Code requires the agency disclosure to be provided at first substantive contact, before any confidential information is shared, to ensure the consumer understands who the agent represents in the transaction.

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An offer may be revoked by the offeror (buyer) at any time before the offeree (seller) communicates acceptance. Once acceptance is communicated to the buyer, a binding contract is formed and unilateral revocation is not permissible.

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The USDA Section 502 Guaranteed Loan Program is specifically designed to assist low-to-moderate income buyers in eligible rural and suburban areas, and may be used for manufactured homes and rural properties.

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Joint tenancy with right of survivorship ensures that when one joint tenant dies, their interest automatically passes to the surviving joint tenant(s). Iowa is not a community property state, and tenancy by the entirety may have limited application.

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Because no two properties are identical, an appraiser makes dollar adjustments to the comparable sales to account for differences between the comparables and the subject property (e.g., square footage, amenities, condition). The adjusted values of the comparables bracket the subject's value.

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Steering is the illegal practice of directing buyers toward or away from neighborhoods based on protected class characteristics — including religion. This violates the Fair Housing Act regardless of the agent's intent.

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A warranty deed is the most commonly used instrument to transfer title to real property in Iowa. It contains warranties (guarantees) by the grantor about the title being conveyed.

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Commission = Sale Price × Commission Rate. $215,000 × 0.06 = $12,900. To solve this, multiply the relevant values: $215,000 at 6%.. The correct answer is $12,900.. This is a common calculation on the Iowa real estate exam.

Explanation

Iowa law requires sellers of real property to complete a Groundwater Hazard Statement disclosing information about wells, underground storage tanks, solid waste disposal sites, hazardous waste, and burial sites on the property. It is required for all real property transfers in Iowa.

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A nonconforming use (or legal nonconforming use) is a land use or structure that lawfully existed before current zoning regulations were adopted but no longer conforms to the zoning requirements. It is allowed to continue but typically cannot be expanded.

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Iowa law requires property managers who handle client funds (rents, security deposits) to maintain these in a separate trust or escrow account, completely separate from operating funds. This prevents commingling and protects the owners' and tenants' funds.

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Iowa requires 96 hours of pre-license education before a candidate may sit for the real estate salesperson licensing exam.

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A buyer's agent in Iowa owes fiduciary duties exclusively to the buyer. These duties include loyalty, confidentiality, disclosure, obedience, reasonable care, and accounting.

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A home sale contingency makes the purchase of the new property conditional upon the buyer successfully selling their current home. Sellers may accept such an offer with a 'kick-out clause' allowing them to continue marketing.

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Amortization is the gradual reduction of the loan balance through scheduled payments that cover both interest and principal. In the early years, most of each payment goes toward interest; over time, more goes toward principal.

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A prescriptive easement is acquired through open, continuous, hostile (without permission), and uninterrupted use of another's property for the statutory period. Unlike adverse possession, it grants only a right to use (easement), not ownership.

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Market value is the most probable price a property would bring in a competitive and open market between a willing, informed buyer and a willing, informed seller, with neither being under duress and both acting prudently.

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A straightforward, factual property description ('3 bedrooms, 2 baths, close to downtown') is permissible. Advertisements suggesting preferences or limitations based on familial status, race, or any other protected class are illegal.

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The chain of title is the chronological record of all previous ownership transfers of a parcel of real property, from the original patent to the current owner. A title search traces this chain to identify any gaps or defects.

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Area in sq ft = 330 × 660 = 217,800 sq ft. Acres = 217,800 ÷ 43,560 = 5 acres. (Note: 5 acres = 1/8 of a mile square, a common land measurement.)

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The EPA recommends taking action to reduce radon levels when indoor concentrations reach or exceed 4 picocuries per liter (pCi/L). Iowa has one of the highest percentages of homes with elevated radon levels in the United States.

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A variance is relief from the strict application of zoning requirements when literal enforcement would cause undue hardship to the property owner due to unique physical characteristics of the property. Variances are not granted simply because an owner wants to use property differently.

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Under Iowa's URLTA, landlords have a duty to maintain rental property in a condition fit for human habitation, complying with all applicable housing, building, and health codes affecting health and safety. This is known as the implied warranty of habitability.

Explanation

The Iowa real estate salesperson licensing exam consists of 105 questions. Candidates must achieve a passing score of 70%.