Iowa Real Estate Practice Exam

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Study for the Iowa Real Estate Test. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

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What is the action of a broker if a seller does not approve of repairs made using transferred funds?

The broker faces potential legal action
The broker will be fined
The seller must approve all repairs in writing
The broker is not responsible for seller's decisions

The correct answer is: The broker faces potential legal action

When a seller does not approve of repairs made using transferred funds, the action of the broker is significant because it directly relates to the responsibilities and fiduciary duties brokers hold toward their clients. In this context, if the repairs were made without the seller's prior consent or contrary to the terms laid out in their contractual agreement, the broker may face potential legal action. This situation implies a failure to uphold the duty to act in the seller's best interests or to follow the agreed-upon parameters of the transaction, which can lead to claims of negligence or breach of fiduciary duty. Legal action could arise from the seller seeking compensation for dissatisfaction with the repairs or resulting damages if the repairs were not performed per the seller's wishes. Thus, the concern about potential legal repercussions emphasizes the broker's responsibility for ensuring that all actions taken on behalf of the seller are approved and align with their expectations.