Iowa Real Estate Practice Exam

What action should a real estate agent take before helping a buyer secure a mortgage?

1. Wait until the transaction is complete

2. Get the buyer's permission for referrals

3. Refer to any lender without conditions

4. Consult a broker for advice

The correct answer is: Get the buyer's permission for referrals

Before assisting a buyer in securing a mortgage, it is essential for a real estate agent to obtain the buyer's permission for referrals. This action ensures that the buyer is comfortable with the agent recommending specific lenders. Moreover, it fosters a trusting relationship between the agent and the buyer. Real estate regulations often require agents to act transparently and ethically, which includes ensuring that clients consent to any referral to lenders or other professionals. Obtaining permission not only protects the buyer's privacy but also allows them to make informed decisions about whom to work with. By doing so, the agent demonstrates respect for the buyer's autonomy and encourages open communication, which can lead to a smoother transaction process. In contrast, waiting until the transaction is complete would not provide timely support to the buyer in securing financing. Referring to any lender without conditions can expose both the agent and the buyer to risks associated with working with unqualified or unsuitable lenders. Consulting a broker for advice may be beneficial, but it should not replace the need to have the buyer’s consent before making referrals.