Iowa Real Estate Broker Exam — All Questions

Under Iowa law, a licensee who wishes to act as a disclosed dual agent representing both buyer and seller must:

• a.Represent only the seller's interests despite the arrangement
• b.Obtain approval from the county recorder
• c.Charge a reduced commission set by the Commission
• d.Obtain the written consent of both parties to the dual agency✓

Section 543B.58(1) provides that "a licensee shall not be the agent for both a buyer and a seller to a transaction without obtaining the written consent of both the buyer and the seller," and that the consent must state that the licensee has made full disclosure of the type of representation, recite the licensee's duties under section 543B.56, and record that the clients understand and consent. Rule 481-2012.5 adds that the brokerage must have a written company policy permitting disclosed dual agency, that the consent agreement must tell clients they are not obligated to consent, and that if any party refuses to sign, the licensee cannot act as a dual agent at all. No county officer approves the arrangement. Commission rates are never set by the Commission and are fully negotiable. And a dual agent does not quietly favor the seller: the licensee owes both clients the duties of a single agent except as the rule provides, and may not disclose one client's confidential information to the other.

Under Iowa Code section 543B.57 and rule 481-2012.2, a licensee's agency disclosure must be:

• a.Verbal when specific assistance begins, then written before any offer is made✓
• b.Verbal at the first showing, with a written version filed with the commission
• c.Written at the first contact and again verbally at the closing of the sale
• d.Written only if the client asks for it before the purchase agreement is signed

Iowa runs a two-step disclosure. Rule 481-2012.2(2) requires a verbal disclosure by the licensee before providing specific assistance to a client or an unrepresented customer, and rule 481-2012.2(3) requires the written disclosure to be made to the buyer or tenant before any offer, lease or rental agreement is made or signed by them and before the seller or landlord signs or accepts it, acknowledged by separate signatures. Section 543B.57(2)"b" states the same timing. The disclosure is therefore never optional and never dependent on the client asking for it. Nothing is filed with the commission; the broker retains the signed copy in the transaction file for five years, and rule 481-2012.2(12)"b" requires the same retention even where the offer was rejected. A change in representation that makes the initial disclosure incomplete, misleading or inaccurate requires an immediate new verbal disclosure followed by a new signed written one.

For agency-disclosure purposes, Iowa's definition of "specific assistance" does NOT include:

• a.Eliciting information about a buyer's motivation for moving to the area
• b.Accepting confidential information about a party's financial qualifications
• c.An open house showing or a preliminary talk about price range and location✓
• d.Accepting information about a preliminary offer on a specific property

Section 543B.57(2)"c" defines specific assistance as "eliciting or accepting confidential information about a party's real estate needs, motivation, or financial qualifications, or eliciting or accepting information involving a proposed or preliminary offer associated with specific real estate," and then excludes three things: "an open house showing, preliminary conversations concerning price range, location, and property styles, or responding to general factual questions concerning properties which have been advertised for sale or lease." The other three choices track the inclusions almost word for word, which is why each of them does start the disclosure clock. The distinction matters at an open house in particular, because a customer there is also outside the brokerage agreement requirement of section 543B.56A(3); the moment the conversation turns to what the visitor can afford or what they would offer, specific assistance has begun and disclosure is owed.

An Iowa designated broker appoints two affiliated licensees to represent the seller and the buyer in one transaction. The designated broker is:

• a.Barred from making the appointments unless the firm has two offices
• b.Not a dual agent merely because of the appointment under section 543B.59✓
• c.A dual agent automatically, because both clients are in the same firm
• d.Required to withdraw from the transaction and refer both clients out

Section 543B.59(2) provides that "a real estate brokerage agency and a designated broker are not considered to be dual agents solely because of an appointment under the provisions of this section," while an affiliated licensee who personally represents both the seller and the buyer in the same transaction is a disclosed dual agent and must follow the dual agency rules. That is the whole point of appointed agency: it lets one firm serve both sides without making the broker a dual agent by operation of law, and section 543B.59(3) adds that knowledge is not imputed among the clients, the agency and its appointed agents. The number of offices is irrelevant. Withdrawal is not required either, though rule 481-2012.6(4) provides that if a client refuses to consent to the appointment made for the other party, the broker and affiliated licensees cannot act as an appointed agent for that other party. Rule 481-2012.7(1) requires the brokerage, before entering into a brokerage agreement, to give the client written notice of its appointed agent policy and the named appointed agents with a place to consent or not consent.