Iowa Real Estate Practice Exam

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When does a buyer receive a written agency agreement when engaging a broker?

Only when transactions are successful
While preparing to submit an offer
Before offers to purchase are presented
At the initial consultation request

The correct answer is: Before offers to purchase are presented

A buyer receives a written agency agreement before offers to purchase are presented because this document establishes the formal relationship between the buyer and the broker. This agreement outlines the responsibilities and expectations of both parties, ensuring that the buyer understands the broker's role in representing them. Having this agreement in place prior to submitting an offer protects both the buyer and the broker by clarifying how the broker will assist in the transaction, including providing advice and negotiating on behalf of the buyer. It also complies with legal requirements in real estate practices, which necessitate that buyers are informed of their agency relationship before any negotiations or offers take place. This proactive approach helps create transparency and trust, ensuring that the buyer is well-informed about the level of service and representation they can expect as they navigate the buying process.