Contracts, Finance, and Transfer Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Massachusetts Real Estate Salesperson Exam involving financing contingency and broker-salesperson supervision. What should the licensee understand? (Item 27)
Answer choices
- A. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
- B. The requirement matters only when the buyer obtains institutional financing.
- C. Understand buyer protection tied to loan approval or financing terms in a way that fits Massachusetts exam practice.
- D. The affiliated licensee may handle the matter independently without broker responsibility.
Correct Answer
C. Understand buyer protection tied to loan approval or financing terms in a way that fits Massachusetts exam practice.
Explanation
The correct answer is C because financing contingency requires candidates to understand buyer protection tied to loan approval or financing terms. The Massachusetts reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.
Question details
- Difficulty: medium
- Domain: Contracts, Finance, and Transfer
- Objective: financing contingency