Principles, Property, and Land Use Practice Question
Question
A buyer asks a licensee for an exam-focused explanation for the Massachusetts Real Estate Salesperson Exam involving loan-to-value and broker-salesperson supervision. Which response best applies the rule? (Item 159)
Answer choices
- A. Client funds may be mixed with business funds if the broker reconciles the account later.
- B. The issue can be ignored if the parties want to close quickly.
- C. Interpret the relationship between loan amount and property value in a way that fits Massachusetts exam practice.
- D. The rule applies only to commercial transactions and never to residential transactions.
Correct Answer
C. Interpret the relationship between loan amount and property value in a way that fits Massachusetts exam practice.
Explanation
The correct answer is C because loan-to-value requires candidates to interpret the relationship between loan amount and property value. 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: Principles, Property, and Land Use
- Objective: loan-to-value