Iowa Real Estate Practice Exam

If a buyer experiences issues with a property that were not disclosed by the seller, what can the buyer potentially do?

1. File a complaint with the brokerage

2. Sue the broker for nondisclosure of a material fact

3. Request a refund from the seller

4. Negotiate a lower price

The correct answer is: Sue the broker for nondisclosure of a material fact

When a buyer experiences issues with a property that were not disclosed by the seller, pursuing legal action by suing the broker for nondisclosure of a material fact is a viable option. A broker holds a fiduciary duty to both the buyer and the seller, which includes the responsibility to disclose any known material defects or issues with the property. If the buyer can prove that the broker failed to disclose significant information that affects the property's value or desirability, they may have a strong case for damages. Legal action can help the buyer seek damages or other remedies, depending on the extent of the nondisclosure and the resulting impact on the buyer. This option emphasizes accountability in real estate transactions and affirms the importance of transparency between parties involved. In contrast to this, filing a complaint with the brokerage may lead to internal investigations or actions, but it does not guarantee compensation or resolution for the buyer. Requesting a refund from the seller might be unrealistic unless stipulated in the contract or under specific circumstances, as real estate transactions typically don’t involve refunds in the same way consumer goods do. Negotiating a lower price could be beneficial in some cases, but it doesn't address the legal recourse for issues already encountered, which is why suing the broker for nondisclosure