Practice Quiz

Real Estate Agent / Broker / Salesperson Exam Prep

Category - Real Estate

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During Broker Shaw’s preparation of the Exclusive Authorization and right to Sell on Seller Norman’s property, Norman asked that a clause be included which would require the buyer to accept primary liability in connection with the existing loan is transferred to the buyer. Shaw should enter with of the following in Paragraph 2 of the Exclusive Authorization and Right to Sell from:
  1. Buyer to take the property “subject to” the loan
  2. Buyer to “assume” existing loan
  3. Buyer to pay all cash
  4. Buyer to make a large down payment to preclude possibility of a foreclosure
Explanation
Answer: B. If a buyer assumes an existing loan, he accepts primary liability for that loan.
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Additional Answers

Fabrice Dejean says:

Debts, such a student loans, credit cards, mortgages are attached to the individual, not the property and are not legally transferable, by law. However, if someone "accepts" to repay someone else's loan, .....

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