Iowa Real Estate Practice Exam

What must be disclosed to buyers in a dual agency more than the normal brokerage practices?

1. Terms of the contract

2. Identity of the buying client

3. Communication between agents

4. The broker's commission percentage

The correct answer is: Terms of the contract

In a dual agency situation, where a single broker represents both the buyer and the seller in a transaction, the broker is required to disclose specific information that goes beyond what is typically shared in standard brokerage practices. Among the options provided, the terms of the contract must be disclosed because this transparency is crucial for protecting both parties involved in the transaction. The dual agent holds responsibilities to both clients, and disclosing the terms of the contract ensures that both buyer and seller are fully informed about the conditions of the agreement they are entering into. This obligation helps mitigate any potential conflicts of interest and builds trust between the agent and their clients, fostering a more transparent negotiation process. Safeguarding the interests of both parties is essential, especially when one representative serves both sides—hence the increased requirement for disclosure in such scenarios. While the identity of the buying client, communication between agents, and the broker's commission percentage are important aspects of real estate transactions, they do not carry the same legal or ethical weight of disclosure as the terms of the contract in a dual agency arrangement.