Valuation and Financing Practice Question
Question
A seller is reviewing documents before accepting an offer involving discount points. Which statement is the most accurate exam answer? (Item 49)
Answer choices
- A. Recognize prepaid interest used to adjust loan yield.
- B. It allows a salesperson to act independently of the responsible broker.
- C. It shifts all responsibility to escrow and eliminates the broker’s duties.
- D. It makes oral promises enforceable in every real estate transaction.
Correct Answer
A. Recognize prepaid interest used to adjust loan yield.
Explanation
The correct answer is A because discount points requires candidates to recognize prepaid interest used to adjust loan yield. 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: hard
- Domain: Valuation and Financing
- Objective: discount points