Iowa Real Estate Salesperson Exam — All Questions

When an Iowa salesperson receives an earnest-money deposit from a buyer, the funds must be:

• a.Sent directly to the Iowa Real Estate Commission
• b.Deposited in the salesperson's personal account until closing
• c.Kept as cash by the salesperson until the seller accepts
• d.Delivered promptly to the broker to be held in the broker's trust account✓

Earnest money and other client funds must be handled through the employing broker's trust (escrow) account. A salesperson who receives such funds must deliver them promptly to the broker, who must keep trust money separate from business and personal accounts. Mishandling trust funds is a serious Iowa license-law violation.

In a typical Iowa residential sale, which document must the seller provide to disclose environmental information about the property at the time of transfer?

• a.A mechanic's lien waiver
• b.A federal flood certificate
• c.A Groundwater Hazard Statement✓
• d.A homeowners association resale packet

Iowa law requires a Groundwater Hazard Statement to be submitted when many real estate transfers are recorded, disclosing wells, solid waste, hazardous conditions, underground storage tanks, and private sewage information on the property. This state-specific disclosure is separate from the general residential property condition disclosure and helps ensure the transfer can be recorded properly.

An Iowa purchase offer receives its last signature of acceptance on Monday. Absent a contrary contract term, the earnest money must reach the trust account:

• a.within 24 hours of receiving the buyer's earnest check
• b.no later than ten full business days after acceptance
• c.no later than five banking days after acceptance✓
• d.at closing, when the funds are finally disbursed to all

All trust funds must be deposited no later than five banking days after the date indicated on the document that the last signature of acceptance is obtained, unless the contract specifies otherwise. Cite: Iowa Admin. Code r. 481—2013.1(1)“a”.

Interest earned on an Iowa broker's common trust account is, absent a written agreement to the contrary:

• a.kept by the broker as compensation for administration
• b.sent quarterly to the state for the housing trust fund✓
• c.credited to each buyer at the closing of that transaction
• d.paid annually to the listing service

The common trust account must be interest-bearing, and interest is transferred quarterly to the treasurer of state and on to the Iowa Finance Authority for deposit in the housing trust fund established in Iowa Code § 16.181; the broker may not benefit from interest on others' funds. Cite: Iowa Code § 543B.46(1); Iowa Admin. Code r. 481—2013.1(2).

How much of a broker's own money may sit in an Iowa trust account to cover bank service charges?

• a.Nothing; any personal funds are commingling
• b.Up to $500, if the broker's written policy says so
• c.Any amount, so long as it is reconciled monthly
• d.Up to $1,000, specifically identified as such✓

A broker may deposit and keep a sum not to exceed one thousand dollars of personal funds in the trust account, specifically identified and deposited to cover bank service charges relating to the account. Cite: Iowa Code § 543B.46(4); Iowa Admin. Code r. 481—2013.1(1)“c”.

An Iowa earnest money dispute is 30 days old, with no lawsuit and no written agreement. The broker may release the deposit to the buyer:

• a.after 30 days' written notice by certified mail to all parties✓
• b.only after a court orders the disposition of the funds
• c.immediately, because the contingency period has run out
• d.only if the seller signs a release within five banking days

Absent a pending civil action or written agreement, it is not grounds for discipline if, on passage of 30 days from the date of the dispute, the broker disburses the earnest money to the buyer on a good faith decision that a contingency was not met — but only after giving 30 days' written notice by certified mail to all parties at their last-known addresses. Cite: Iowa Admin. Code r. 481—2013.1(8)“a”.

Trust funds an Iowa broker cannot trace to any individual become reportable unclaimed property after:

• a.one year, payable to the treasurer of that county
• b.five years, payable to the real estate commission
• c.three years, payable to the Treasurer of State✓
• d.seven years, payable to the Iowa Finance Authority

Trust funds not traceable to any individual for disbursement are unclaimed property; after three years they are reported and remitted to the Treasurer of State, Unclaimed Property Division. Cite: Iowa Admin. Code r. 481—2013.1(14); Iowa Code ch. 556.

Iowa's seller disclosure of property condition under chapter 558A applies to a transfer of property with:

• a.any number of residential units under one roof
• b.at least two but not more than eight dwelling units
• c.one single-family dwelling occupied by the seller
• d.at least one but not more than four dwelling units✓

“Transfer” under chapter 558A reaches a sale, exchange, real estate contract or other purchase method only if the property includes at least one but not more than four dwelling units. Cite: Iowa Code § 558A.1(7).

An Iowa seller's disclosure statement is delivered late, by mail. The buyer may revoke the acceptance without liability within:

• a.three days following the mailing date
• b.five days following delivery by mail✓
• c.ten days following delivery by mail
• d.thirty days, or until closing if sooner

If the disclosure statement is not timely delivered, the transferee may withdraw the offer or revoke the acceptance without liability within three days following personal delivery of the statement, or five days following electronic delivery or delivery by mail. Cite: Iowa Code § 558A.2(2).

An Iowa seller disclosure statement is emailed to the buyer's agent. Delivery is not complete until:

• a.the email server returns a computer-generated read receipt
• b.the message leaves the sending licensee's outbox
• c.the buyer or the buyer's agent acknowledges receipt in writing✓
• d.a facsimile delivery confirmation is printed and filed

Electronic delivery of a chapter 558A disclosure is not deemed completed until written acknowledgment of receipt is provided to the transferor by the transferee or the transferee's agent; a computer-generated read receipt, fax delivery confirmation or other automated return message does not count. Cite: Iowa Admin. Code r. 481—2014.1(6).

Iowa's seller disclosure statement now asks whether the property currently has, or ever had, any:

• a.lead water service lines✓
• b.lead-lined roof flashing
• c.lead-glazed drain piping
• d.lead-sealed septic tanks

2025 Iowa Acts ch. 144 added “lead service line” to chapter 558A effective January 1, 2026, and the commission added the matching disclosure item — “Are there currently, or have there ever been, any lead water service lines present?” — to the model statement. Cite: Iowa Code §§ 558A.1(4), 558A.4(1)“a”; Iowa Admin. Code r. 481—2014.1(7), item 13 (ARC 0027D, effective 4/22/2026).

An Iowa property has no known well, burial site, storage tank, hazardous waste, disposal site or private sewage system. At recording:

• a.a groundwater hazard statement is filed with a $12 fee
• b.no statement is filed; the deed's first page says so✓
• c.the recorder files one on the seller's behalf
• d.the DNR must certify the property before recording

Since 2022 Iowa Acts ch. 1028, when none of the Iowa Code § 558.69(1) conditions is present no groundwater hazard statement is submitted; instead the deed's first page must carry the statutory “no known…” statement, and the recorder must refuse to record a deed lacking it. Cite: Iowa Code § 558.69(8)-(9).

An Iowa home sells for $250,000 with no personal property stated on the deed. The real estate transfer tax is:

• a.$200.00
• b.$400.00
• c.$399.20✓
• d.$199.60

Iowa taxes 80 cents for each $500, or fractional part of $500, of consideration in excess of $500. ($250,000 − $500) ÷ $500 = 499; 499 × $0.80 = $399.20. The grantor is liable for the tax. Cite: Iowa Code §§ 428A.1(1)“a”(2), 428A.3.