Valuation and Financing Practice Question
Question
A seller is reviewing documents before accepting an offer involving loan-to-value ratio. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 68)
Answer choices
- A. It removes the need for written disclosure if the licensee believes the client already knows.
- B. It can be ignored if the transaction is expected to close quickly.
- C. It requires the licensee to favor the other party over the licensee’s own client.
- D. Calculate or interpret the relationship between loan amount and property value.
Correct Answer
D. Calculate or interpret the relationship between loan amount and property value.
Explanation
The correct answer is D because loan-to-value ratio requires candidates to calculate or interpret the relationship between loan amount and property value. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.
Question details
- Difficulty: medium
- Domain: Valuation and Financing
- Objective: loan-to-value ratio