Iowa Real Estate Practice Exam

Can a real estate agent represent both the buyer and seller in a transaction?

1. No, this is not allowed

2. Yes, with written consent from both parties

3. Only if a third party is involved

4. Yes, but it must be disclosed after the agreement

The correct answer is: Yes, with written consent from both parties

A real estate agent can represent both the buyer and seller in a transaction, a practice known as dual agency, but this is only permissible with the written consent of both parties involved. This requirement ensures that all parties are fully aware of the potential conflicts of interest that may arise when one agent represents both sides in a transaction. By obtaining written consent, the agent is upholding transparency and protecting the interests of both the buyer and the seller. In many jurisdictions, including Iowa, the law dictates that full disclosure is essential when it comes to dual agency arrangements. Both parties should understand the implications of allowing a single agent to handle their interests simultaneously, as this can impact negotiations and the agent's ability to advocate on behalf of either party. The other options do not align with this practice: outright prohibition is not accurate where specific consent is involved, and suggesting a third party or late disclosure doesn't adhere to the standards of transparency required in real estate transactions. Thus, written consent from both the buyer and seller is the cornerstone for a real estate agent to legally represent both sides.