Final answer:
The real estate agent should check to ensure that the mortgage does not include an acceleration clause to avoid triggering a penalty or requiring full loan repayment upon the transfer of property.
Step-by-step explanation:
When a property is being sold and the purchaser is to continue the payments on an existing amortized loan secured by a first mortgage, the real estate agent should ensure that the mortgage does not include an acceleration clause. An acceleration clause is a provision in a mortgage contract that requires the borrower to pay off the entire loan balance if certain conditions, such as the sale or transfer of the property, are met. This clause could potentially trigger a penalty or require immediate repayment of the loan in full, rather than allowing the purchaser to simply continue with the existing payment schedule.
To facilitate a smooth transfer of property with the assumption of the mortgage by the buyer, the real estate agent must verify the absence of this clause. If such a clause exists, the buyer and seller may need to negotiate with the lender to remove or bypass the clause, or arrange alternative financing.