Iowa Real Estate Practice Exam

Which situation is considered a stigma but NOT a material adverse fact in Iowa?

1. Recent plumbing issues

2. Knowledge of a fire in the house

3. Knowledge of a suicide in the garage

4. Presence of lead paint

The correct answer is: Knowledge of a suicide in the garage

In the context of Iowa real estate, a stigma refers to a situation or event that may affect the perception of a property or its desirability but does not impact its physical condition or structural integrity. The scenario involving the knowledge of a suicide in the garage is an example of stigma, as it pertains to the property's history and how it may influence buyer perceptions or feelings, rather than an issue affecting the property's material condition or safety. On the other hand, other options involve issues that can affect the property's physical state or safety. Recent plumbing issues could lead to functional problems in the house, while knowledge of a fire indicates potential damage or hazards that can affect the home's condition. The presence of lead paint is also considered a material adverse fact due to potential health risks associated with lead exposure, especially for children. Therefore, the historic event of a suicide, while significant to some buyers, does not affect the property's current physical characteristics, making it a stigma rather than a material adverse fact.