IA Real Estate cheat sheet

Real property consists of land, fixtures, appurtenances, and the bundle of rights (surface, subsurface, and air).

Fixture test: annexation (physical attachment), adaptation (fit for the use), and intention to make the item permanent; courts generally give the greatest weight to intention.

Trade fixtures installed by a tenant stay personal property and are removable before the lease ends if removal causes no material damage.

Freehold estates (fee simple absolute, life estate) last indefinitely or for a measuring life; nonfreehold estates (estate for years, tenancy at will) are leaseholds treated as personal property.

Fee simple determinable ends automatically on the stated event and reverts to the grantor; fee simple subject to a condition subsequent requires the grantor to re-enter.

Tenancy in common: no survivorship and unequal shares allowed. Joint tenancy: equal shares, survivorship, four unities. Tenancy by the entirety: spouses only, with survivorship.

An easement appurtenant benefits a dominant parcel and runs with the land; an easement in gross benefits a person or entity and has no dominant parcel.

Legal descriptions include metes and bounds, lot-and-block of a recorded plat, and the Public Land Survey System (one section = 640 acres = one square mile).

Mineral and water rights may be severed from the surface estate, creating separately owned interests.

An encumbrance burdens or limits title without necessarily preventing transfer: liens, easements, encroachments, deed restrictions, and mortgages.

Liens are specific (one parcel) or general (all property), and voluntary or involuntary; real estate tax and special assessment liens generally take priority over other liens.

Iowa mechanic's lien claimants generally must file a claim with the county recorder within 90 days after the last day labor or materials were furnished.

Iowa is a race-notice jurisdiction: a later purchaser prevails only by taking without notice of the prior interest and recording first.

Deed essentials: competent grantor, identifiable grantee, words of conveyance, legal description, signature, delivery, and acceptance; consideration is customary but not essential to validity.

A general warranty deed contains present and future covenants; a special warranty deed covers only the grantor's own acts; a quitclaim conveys only whatever interest the grantor holds.

Title passes on valid delivery and acceptance, not on recording; recording protects the grantee against later claimants.

Adverse possession and prescriptive easements require open, notorious, hostile, exclusive, and continuous use for the statutory period.

Iowa practice relies on attorneys' title opinions, abstracts of title, and Iowa Title Guaranty more than traditional title insurance policies.

Agency arises by express agreement, implication, ratification, or estoppel; a special agent holds limited authority for a specific task.

Universal fiduciary duties: care, obedience, loyalty, disclosure, confidentiality, and accounting.

Loyalty prohibits self-dealing, secret profits, and purchasing the principal's property without full disclosure and consent.

Dual agency represents both parties in one transaction and requires informed written consent; the agent may not reveal one party's confidences to the other.

Confidentiality survives termination of the agency but never justifies concealing known material adverse facts about the property.

A commission is earned when the broker produces a ready, willing, and able buyer on the agreed terms, unless the agreement states otherwise.

Agency terminates by performance, expiration, mutual agreement, revocation, renunciation, or death or incapacity of either party.

A broker is responsible for the acts of salespersons under its supervision, and a salesperson's knowledge is imputed to the broker.

Contract elements: offer, acceptance, consideration, capacity, and legality; real estate contracts also need a legal description and signatures to satisfy the statute of frauds.

A counteroffer operates as a rejection that terminates the original offer; an offer may be withdrawn any time before acceptance.

Acceptance must be unequivocal and communicated in the manner the offer requires; silence is not acceptance except in narrow circumstances.

A bilateral contract exchanges promises; a unilateral contract exchanges a promise for performance.

Earnest money is not required for validity; it evidences intent and is applied to the price at closing or retained as liquidated damages per the contract.

Contingencies are conditions that must occur before performance is required; failure may permit termination and return of the deposit.

Remedies for breach include specific performance, compensatory damages, rescission, and forfeiture of the deposit when the contract so provides.

Under the merger doctrine, contract terms merge into the deed at closing, except for surviving items such as title warranties.

Electronic signatures and records are enforceable in Iowa under the Uniform Electronic Transactions Act.

LTV = loan amount divided by the lesser of sale price or appraised value; conventional loans above 80% LTV typically require private mortgage insurance.

Monthly interest = unpaid principal balance x annual rate / 12; amortized payments pay interest first, then principal.

One discount point = 1% of the loan amount; points buy down the interest rate, while origination fees compensate the lender.

Common qualifying ratios: conventional guidelines often use 28% front-end and 36% back-end; FHA commonly 31% and 43%.

Loan programs: conventional, FHA (low down payment, mortgage insurance premium), VA (no down payment, funding fee), USDA (rural, income limits).

Fixed-rate loans keep the rate constant; adjustable-rate loans change by index plus margin, subject to periodic and lifetime caps.

Iowa is a lien-theory state; foreclosure is judicial, and the mortgagor generally has one year after the sale to redeem unless the property is abandoned.

Due-on-sale clauses accelerate the debt on transfer; assumptions and novations need lender approval, and a novation releases the original borrower.

TRID timing: Loan Estimate within 3 business days of application; Closing Disclosure at least 3 business days before consummation.

Sales comparison approach: adjust closed comparables toward the subject; never adjust the subject, and adjust a comparable when it differs from the subject.

Cost approach: value = replacement cost minus accrued depreciation plus land value; most reliable for new or special-use properties.

Income approach: value = net operating income divided by cap rate; conversely cap rate = NOI divided by price.

Gross rent multiplier = price divided by gross rent; useful for quick comparison of similar rental properties.

Depreciation types: physical deterioration, functional obsolescence, and external (economic) obsolescence; the last two are often incurable.

Highest and best use must be legally permissible, physically possible, financially feasible, and maximally productive.

Market indicators: absorption rate, months of inventory (active listings divided by monthly absorption), days on market, and list-to-sale price ratio.

Value is an opinion as of a specific effective date; FIRREA requires state-licensed or certified appraisers and USPAP compliance.

Key principles: substitution, contribution, conformity, progression and regression, anticipation, and increasing and decreasing returns.

Iowa's Uniform Residential Landlord and Tenant Act (Iowa Code ch. 562A) applies where adopted; chapter 562B governs mobile home park tenancies.

Security deposit: Iowa requires refund or a written itemized accounting within 30 days after the tenancy ends and the tenant's new address is supplied.

An Iowa month-to-month tenancy terminates on 30 days' written notice; nonpayment of rent supports a 3-day notice to cure before a forcible entry and detainer action.

Leases longer than one year must be written under the statute of frauds; oral leases of up to one year are enforceable.

The implied warranty of habitability requires safe, sanitary conditions regardless of lease language, and retaliatory eviction for good-faith complaints is prohibited.

Federal fair housing protects race, color, religion, sex, national origin, familial status, and disability; Iowa Civil Rights law adds sexual orientation, gender identity, and marital status.

Disability-related reasonable accommodation and modification requests must be evaluated case by case; blanket refusals create discrimination exposure.

Property manager duties include leasing, maintenance, budgeting, accounting for owner funds, and staying within the authority granted by the management agreement.

Iowa real estate licensing is governed by Iowa Code chapter 543B and the Iowa Administrative Code, administered by the Iowa Real Estate Commission.

Salespersons must be licensed under a supervising broker; brokers may operate independently and are accountable for supervising their licensees.

Unlicensed assistants may perform clerical work but may not negotiate, show property, or discuss contract terms.

Iowa continuing education requires 36 hours of approved courses during each three-year license renewal cycle.

Client funds must be held in a designated trust account; commingling brokerage money with client money is prohibited.

Advertising must identify the brokerage and must not be false or misleading; a licensee may not advertise property without authority.

Grounds for discipline include misrepresentation, fraud, failure to account, undisclosed dual agency, and unlicensed activity.

The Commission may investigate complaints, hold contested case hearings, suspend or revoke licenses, impose civil penalties, and order restitution; appeals proceed to district court.

Licensees must report criminal convictions and changes of address or employing broker within the time required by rule.

Iowa requires a written Seller's Disclosure of Property Condition for most transfers of one-to-four unit residential property before the buyer becomes bound.

A Groundwater Hazard Statement is required for real property transfers, disclosing private water supply, private sewage systems, and known hazardous conditions, and it is filed with the recorder.

The Declaration of Value states the consideration paid and is filed with the county recorder, supporting the transfer tax calculation and sales data.

Iowa real estate transfer tax is $0.80 per $500 of consideration or fraction thereof, plus any local tax, paid when the deed is recorded.

Agency disclosure forms must be presented and acknowledged so consumers know who represents whom, and representation should be documented in a written agency agreement.

Iowa closings are attorney-supervised: buyers typically receive an abstract of title and an attorney's title opinion, and Iowa Title Guaranty coverage is available.

Federal lead-based paint disclosure applies to pre-1978 housing, layered on top of Iowa's state property condition disclosures.

Purchase agreement forms commonly used in Iowa come from the Iowa Association of REALTORS and local boards; terms remain negotiable and subject to attorney review.

On the settlement statement, buyer debits are charges (price, fees) and buyer credits are funds provided; seller credits include the price while seller debits include payoff and closing costs.

Proration splits a shared item by days of ownership; taxes typically use a 365-day year and rents use the monthly amount for the closing month.

Iowa transfer tax: multiply consideration by 0.0016 (the same as $0.80 per $500), rounding the number of $500 increments up.

Commission = sale price x agreed rate; a co-broke split divides the commission between the listing and selling brokers per their agreement.

Area conversions: 1 acre = 43,560 square feet; 1 section = 640 acres; 1 mile = 5,280 feet.

Loan payoff = unpaid principal plus accrued per-diem interest, where per diem = principal x rate / 365.

The Closing Disclosure must be received at least 3 business days before consummation; a changed APR or changed loan terms can require re-disclosure.

Settlement items include transferred security deposits, prepaid rent, unpaid taxes, and utility prorations between buyer and seller.