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 Massachusetts Board of Registration. What should the licensee understand? (Item 117)
Answer choices
- A. Understand buyer protection tied to loan approval or financing terms in a way that fits Massachusetts exam practice.
- B. The issue can be ignored if the parties want to close quickly.
- C. The rule applies only to commercial transactions and never to residential transactions.
- D. Client funds may be mixed with business funds if the broker reconciles the account later.
Correct Answer
A. Understand buyer protection tied to loan approval or financing terms in a way that fits Massachusetts exam practice.
Explanation
The correct answer is A 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: easy
- Domain: Contracts, Finance, and Transfer
- Objective: financing contingency