Question

The buyer wants J, the agent, to write up the offer as a seller carry back for the financing of the sale. What statement is applicable to this situation?

(a) J should request the loan documents from the lender, review them, then give an opinion about the legality of this approach.
(b) J must disclose to both parties there might be a "due on sale" clause and its effect. (c) It is illegal, and if J values his/her license, J won't do it.
(d) J. should request an estoppel certificate for disclosure to the buyer.

Answer 1

The applicable statement in this situation is that J must disclose the "due on sale" clause and its effect.

Step-by-step explanation:

The statement that is applicable to this situation is (b) J must disclose to both parties there might be a "due on sale" clause and its effect.

When the buyer wants the agent, J, to write up the offer as a seller carry back for the financing of the sale, it means that the seller will provide financing for the buyer rather than the buyer obtaining a traditional loan from a bank. In this situation, it is important for J to disclose to both parties that there might be a "due on sale" clause, which is a clause in the loan agreement that allows the lender to demand full payment of the loan if the property is sold.