Educational Resources: Take Iowa Real Estate Sample Tests, Application Steps and Tips

The Iowa real estate exam isn’t easy to pass, nor is it free. PSI Exam Services administers the exam, and it takes place in one of their Iowa exam locations or online with a virtual proctor.

Before taking the exam, you need to pay a $95 fee.

There are two sections: one for state-related questions and one for national questions. In the national section, there are 80 questions and 56 correct answers are necessary for a passing grade.

Real Estate Licensing Exam Overview

If someone fails to complete the portion within 120 minutes, the commission marks those questions as incorrect.

In the state section, there’s a 60-minute time limit with 40 questions. Passing requires 28 correct questions.

If a test-taker passes one portion but fails the other, they are not eligible for their license. It could take anywhere from one day to over a week to receive results.

What To Bring With You

If taking the exam in person, bring a few required documents. For one, show a government ID with a signature, like a driver’s license or passport.²

You also need another form of ID that has your signature on it. The proctor will also ask to see the certificate of course completion.

Because the exam involves some math, bring a simple calculator.

For those getting their Iowa real estate license online with the virtual proctor, there are different requirements. PSI notifies individuals of those requirements upon sign-up.

What’s on the National Portion of the Test?

Because of the cost of the exam, most people hope to pass it on the first try. The goal of the pre-licensing course is to prepare test-takers for the exam, but there are other online test-prep materials available.

All of the following topics are included in the national section:

1. Property Ownership

There are many nuances regarding property ownership. On the exam, there are multiple questions related to property ownership and what that means.

Topics include the difference between real and personal property, how to read legal descriptions, and how encumbrances affect property.

2. Land Use Controls and Regulations

A major part of real estate is understanding zoning and property use. Unfortunately, this is knowledge that most people outside of real estate don’t have.

Be prepared for the exam to have questions about government rights and government controls, when it relates to land use.

Although this section only makes up about 6% of the national part of the exam, every question matters. Before the test, brush up on this topic.

3. Valuation and Market Analysis

A real estate agent must be capable of valuing a home and understanding the market. On the exam, there are several questions that relate to this topic.

Topics under this section include appraisals, comps, and estimating values. Only about 7% of the national portion of the exam focuses on valuation.

Here’s a sample question:

Lee was hired as an appraiser on a feasibility study for an apartment complex. The current owner is thinking of installing a pool. What principle of appraising would Lee need to use?

4. Financing

Because it’s rare for home buyers to purchase property with cash, real estate agents need a deep understanding of financing. About 10% of the national portion of the exam covers financing, so it’s an important topic.

For the test, be aware of basic financing concepts and terminology.⁴ Expect questions about the multiple types of loans and common lending practices, like this one:

Mortgage points, also known as discount points, are _________________.

5. General Principles of Agency

Making up 13% of the national portion, this section goes over the agent’s duties to their clients. It also asks about agency and non-agency relationships. On the exam, there could be one or two questions about contracts between agents and clients and an agent’s responsibilities.

6. Property Condition and Disclosures

Real estate agents have a responsibility to disclose certain issues to their clients. For instance, they must be honest about the condition of the property and any environmental problems.

This section is about those disclosures and government disclosure requirements. About 6% of the questions are on property disclosures.

7. Contracts

Anyone who’s ever bought a home knows that there are many contracts to sign. So, it might not come as a surprise that 17% of this portion of the exam is about contract law, contract clauses, and offers.

In this section, questions could also relate to counteroffers and how to handle multiple offers. An example question is:

Bill agrees to represent Mario in the sale of his single-family home. The listing contract states that Bill will receive a fee of $15,000 from Mario at the closing, no matter the sales price. Is this a legal and valid practice?

8. Leasing

Because some real estate agents deal in rental or commercial properties, they need to know about lease agreements and property management concepts. About 3% of the national exam covers landlord and tenant rights, Fair Housing, and other leasing concepts.

9. Transfer of Titles

As an agent, you have some involvement in title work. 8% of the national portion of the test focuses on title questions, so study this topic. For example, real estate agent training should include title insurance, closing practices, and deeds. In this section, there may also be questions about special processes and warranties.

10. Practice of Real Estate

Making up 13% of the national section, the practice of real estate questions covers topics like fair housing laws,³ trust and escrow accounts, and advertising. Also in this section could be questions about antitrust laws and licensees and responsibilities.

11. Real Estate Calculations

This portion tests knowledge of simple math concepts and transactional calculations.

What’s on the State Portion of the Test?

There are multiple Iowa-specific questions on the exam, and they’re in the state portion of the test. Contracts is the biggest focus, with 18% of questions focusing on the topic.

Equally important, agency in Iowa makes up 15% of the questions. The third most common topic is property disclosure and requirements, as 13% of questions have this focus.

On the state portion of the exam, there are also questions about:

• Licensing requirements
• Property management
• Disciplinary actions
• Real estate education
• Unlicensed assistants
• Trust accounts
• License maintenance
• Iowa Civil Rights Act of 1965¹
• Broker responsibilities

Five Steps To Successfully Submitting Your Iowa Professional Licensing Bureau License Application

After you finish and pass the exam, you need to apply for your license. Contrary to popular belief, passing the exam doesn’t automatically make someone a real estate agent.

It’s up to the individual to submit all of the documents needed for their license.

1. Pass the Background Check

Before you receive your license, you need to meet the real estate agent’s background check requirements. Create an account at MyIowaPLB.⁶

Then, click “General Background Packet Request” to request a fingerprint packet. Fill out the forms in the packet and schedule an appointment for a fingerprint service.

Typically, sheriff and police offices offer fingerprinting. There’s also an inkless fingerprinting service in Urbandale that’s available to residents in Des Moines.

After the fingerprint appointment, make a copy of all documents and mail the originals to this address:

Iowa Real Estate Commission
200 E Grand St, STE 350
Des Moines, IA 50309

On average, it takes eight to ten weeks for an answer. However, it’s possible to submit the license application while waiting for the results.

The report only lasts for 210 days, so don’t submit fingerprints until you’re ready to apply for the license.

2. Download and Fill Out the Application

The application to be a real estate salesperson in Iowa is on the Iowa Department of Inspections, Appeals, & Licensing website.⁷ If there are downloading issues, reach out to the Iowa Real Estate Commission at [email protected].

The application is relatively simple, but a notary needs to sign off on it. There’s a $125 application fee and you need to submit the form within six months of passing the exam.

By now, you should have passed the real estate exam. You also should have taken the pre-licensing course and the extra coursework.

Download proof of both and keep them with the application.

3. Find a Brokerage

The only way for a non-broker agent to practice in Iowa is to work under a brokerage. Save yourself some trouble by looking for a broker before submitting all the paperwork.

Oftentimes, brokerages help their new agents with the application process.

While in real estate school, you should research local brokerages. It’s important to find one that’s the right fit.

4. Submit Errors and Omissions Insurance

Mistakes happen. To protect real estate agents from expensive mistakes, Iowa requires all agents to have errors and omissions insurance before they receive a license.

A brokerage can help you with this.

5. Submit Everything

Finally, it’s time to submit all of the paperwork. Submit everything online on the Professional Licensing Bureau’s website.⁵ If you have questions, your brokerage can help.

The process usually takes five business days from when the office receives the application. Essentially, the license is a real estate certification.

Iowa Professional Licensing Bureau Financial Commitments

While getting an IA real estate license is cheaper than going to college, it’s not free. Even if you’re looking for free online real estate courses with certificates, there are other fees.

On top of the cost of the pre-licensing course, applicants face the following expenses:

• $51 for background check
• $125 for the application
• $10+ notary fee (varies by notary)
• $15 for fingerprints (varies by station)
• $400+ annually for E&O insurance (varies by coverage and company)
• $0+ Brokerage desk fee (some brokerages charge monthly desk fees)

For budgeting purposes, expect to pay between $700 and $1200 for everything. The biggest expense is likely to be the pre-licensing course.

Exercising Your Right To Apply for National Association of Realtors® (NAR) Membership

Although joining the National Association of Realtors® (NAR) isn’t mandatory, it’s something that could help you get more real estate jobs. It’s a trade organization with a strict code of ethics.

In addition to serving as a networking opportunity, the organization also offers benefits. If you’re an introvert real estate agent, the networking and marketing tips from NAR could help you succeed.

Some home buyers and sellers prefer to work with realtors® because they feel more protected. In 2024, the cost of joining NAR will be $156.

How Much Time Does the Real Estate Application Process Require?

Because the training for the pre-licensing course is at your own pace, the timeline for becoming a buying or listing agent varies greatly. On average, it takes about three to six months from start to finish.

In some rare cases, people complete the process in two months.

Taking the pre-licensing course takes up most of the time. However, another holdup is the background check. It could take as long as ten weeks for the report to come in.

You can submit the application before the results get back, but you won’t receive a license until the Commission reviews the results.