Section 14 unit 1 exam

When working with buyer clients who are open to and may need to consider all sorts of financing options, it's important to be willing to change your buyer search strategy to match their needs and constraints. This is an example of which professional quality?

Flexibility

When a real estate transaction is financed using a land contract, what advice should real estate agents give to their clients?

Have an attorney review the contract.

Brandon wants to sell his house via an installment land contract. Which of the following is an advantage that he could realize?

He will be able to attract more potential buyers.

Gerardo, a first-time homebuyer, is researching the benefits of a land contract. Which of the following might he consider an advantage?

He won't have to pay loan origination fees.

Clark is selling his home to Myrna. Clark will retain the title to the property until Myrna has paid the loan in full. What type of financing is used in this transaction?

Installment land contract

In 2010, Indiana enacted the Secure and Fair Enforcement for Mortgage Licensing Act. What does this act accomplish?

It requires certain holders of land contracts to be licensed.

Marcus is a buyer who has agreed to purchase Lydia's property using a land contract. Who holds legal title to the property during the term of the loan?

Lydia

Which of the following is a disadvantage for a seller in a land contract?

Needing to evict a defaulting buyer

Your buyer client, Sharona, is a freelance editor who usually has a feast-or-famine income stream. She's having trouble qualifying for a conventional mortgage, so she is very interested when she finds a home where the seller is willing to enter into a land contract transaction. Is Sharona a good candidate for a land contract?

No, because her unstable income may make it difficult to make on-time payments.

Can buyers using land contracts also take advantage of first-time homebuyer programs?

No, buyers using a land contract are not eligible for those programs.

Which of the following is a potential disadvantage for the buyer when it comes to the land contract?

Property tax payments

With a land contract, who retains the title to the property?

Seller

Your client Michael may be a good candidate for a land contract deal with a seller. What is your next step?

Advise Michael to get legal advice and have an attorney review the contract.

Your client Shawna appears to be a great candidate for a land contract deal with a seller. What should you do?

Advise Shawna to get legal advice and have an attorney review the contract.

Your clients, The Halseys, have entered into a land contract to purchase a home. What is an advantage to them entering into this type of agreement?

Avoiding some closing costs

A low down payment and the opportunity to write off interest are both ______ when financing with a land contract.

Buyer advantages

How might buyers' credit scores be affected by financing with a land contract?

Credit scores will increase gradually over time, if regular on-time payments are made and reported to a credit bureau.

What clause in an existing mortgage may cause the entire loan amount to come due if the owner decides to sell by entering into a land contract?

Due-on-sale clause

Regarding land contracts, if a seller owns the property outright, which advantage will he have?

Enjoying a steady income stream

Your clients, the Braeburns, have signed a land installment contract to purchase a property. What rights do the Braeburns receive?

Equitable title and possession of the property

Hanna is a buyer who recently lost her job and hasn't been able to make payments on her land contract. The seller can evict her, or he could _______.

Extend the contract

Victor bought a property from Yolanda for $200,000. Under the terms of a land contract, Victor agreed to pay Yolanda in monthly installments of $4,000 over the course of 50 months. Until Victor pays Yolanda the $200,000, who retains the title?

Yolanda

Terrance is selling his property using a land contract. What does it mean when his lender tells him that he's triggered the due-on-sale clause in his mortgage?

Terrance must pay the entire remaining loan balance at once in order to enter into a land contract with a buyer.

Which of the following is a potential concern for a buyer entering into a land installment contract?

The buyer could lose the property after missing only one mortgage payment.

What's one advantage to a buyer financing with a land contract?

The buyer may be able to negotiate a contract requiring little or no money down.

Indiana offers some protections to defaulting buyers who have financed a real estate purchase with a land contract. In order for foreclosure protections to occur, what condition must the buyer have met?

The buyer must have already paid more than 20% toward the purchase price.

Which of these could be a potential disadvantage for buyers financing with a land contract?

The seller could sell his interest in the contract during the contract term.

Why would it be possible for a seller to attract more buyers by offering a land contract arrangement?

The seller has the power to offer more favorable financing terms than a conventional lender.

What records does a seller need to maintain in a land contract transaction?

The seller must record the buyer's payments.

What's the purpose of the Indiana SAFE Act?

To establish licensing requirements for sellers who have land contracts