Final answer:
The question is related to owner financing in a real estate transaction. The best course of action for the agent is to disclose the potential existence of a due on sale clause to both parties involved. Seller reassurance to a buyer with imperfect information can be provided through warranties, return policies, and third-party certifications.
Option 'd' is the correct.
Step-by-step explanation:
The subject question pertains to a scenario where a buyer wants an agent, referred to as J, to write up an offer as a seller carry back for the financing of the sale. The correct response to the scenario presented is that J must disclose to both parties there might be a "due on sale" clause and its effect. This is important as a matter of transparency and ethical practice in real estate transactions.
A seller carry back is a form of owner financing in which the seller essentially acts as the bank, allowing the buyer to make payments to them instead of to a traditional mortgage lender.
However, many existing mortgage loans include a "due on sale" clause which allows the lender to demand full repayment of the loan if the property is sold. It's important for J, the agent, to make both the buyer and the seller aware of the potential existence and implications of this clause to prevent any legal complications post-sale.
In addressing imperfect information in the sale of goods, transparency and reassurance are key.
A seller might offer detailed product specifications, warranties, return policies, and customer testimonials to instill confidence in a potential buyer. Additionally, they may provide third-party certifications or inspections, demonstrating the product's condition and quality.