When selling a property with owner financing, why should you only finance the portion of the purchase price that represents your profit rather than the entire purchase price? A O You don't want to assume all the risk as the lender. BO It's illegal to finance real estate without a lender's license. CO Your lender will require you to pay off your old mortgage loan before transferring title to the buyer. D You'll make more in interest than if you finance the entire purchase price.

When selling a property with owner financing, why should you only finance the portion of the purchase price that represents your profit rather than the entire purchase price? A O You don't want to assume all the risk as the lender. BO It's illegal to finance real estate without a lender's license. CO Your lender will require you to pay off your old mortgage loan before transferring title to the buyer. D You'll make more in interest than if you finance the entire purchase price.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations

Section: Chapter Questions

Problem 6DQ

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Similar questions

17 What is an REO? A O 'Real estate owned' by the lender after a foreclosure where the property failed to sell at auction. A period of time called a 'Redemption Extension to Owner' in which the owner has a chance to buy back property after it is auctioned off. A 'Registered Equity Offering' consisting of a portfolio of loans offered for sale as mortgage-backed securities on the secondary mortgage market. DO A 'Regulatory Enforcement Order' in which a lender files a lawsuit against the borrower to force the sale of the property.
22 Why should you be wary if many condo owners in a property you're evaluating are failing to make timely payments of their association dues? A O It means the condo is old and may need significant repairs soon. Because it's a sign that there may be many vacancies in the building in the near future. CO Because the association may not have enough money to keep common elements repaired. Because the condo association won't be able to pay the property taxes on the building.
What is a nonrecourse loan? Will a nonrecourse loan given by the seller of real estate to the buyer increase the amount the buyer has at risk? Explain.
How is your borrowing power affected when you are considered a "high risk"? There is a good chance that you will receive better loan terms and low interest rates. O You might not qualify for a loan to buy a home, car, etc. O You will pay lower interest rates. O None of the above.
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How is your borrowing power affected when you are considered a "low risk"? There is a good chance that you will receive better loan terms and low interest rates. You might not qualify for a loan to buy a home, car, etc. You will have to pay higher interest rates. None of the above.
If, after collateral is repossessed and sold, there is money left over (a surplus), that money belongs to the creditor to compensate them for the costs of repossession. Select one: O True O False A Purchase Money Security Interest in equipment has priority over an earlier creditor with a security interest in after-acquired property, as long as the PMSI perfects within 20 days after the debtor takes possession. (Example 30.14 on pg. 569.) Select one: OTrue O False A Finance Statement, properly filed, lasts forever and applies to wherever the collateral is moved, even if moved to another state. Select one: O True O Fals
Ray loses his job as a result of a corporate downsizing. Consequently, he falls behind on the mortgage payments on his personal residence. His friend Ted would like to make the delinquent mortgage payments for him. a. Could the payments be structured so that Ray can deduct the mortgage interest? b. Could the payment arrangement deny both Ray and Ted a mortgage interest deduction? c. Could the payments be structured so that Ted can deduct the mortgage interest?
Which statement is true? Financing the property may not be beneficial to the owner in terms of yield on the equity investment O If the overall property yield equals the mortgage rate, the owner receives an additional yield on her or his investment by trading on the equity O If the overall yield on the property is less than the mortgage rate, favorable leverage occurs O When negative leverage occurs, the owner receives a cash yield on the property that is greater than if the property were not financed
Why are sellers willing to pay a commission to a broker to facilitate the sale of their property? Take one of the 6 fiduciary responsibilities (COALDS). Explain how a breach of this responsibility (the agent not following it) could harm the principal in a real estate transaction. Why would a buyer want to have a contract with a real estate brokerage? What benefits would there be? Find a local real estate agency/brokerage and explore their website. Explain one thing you found that relates to what we learned in Chapter 12. What are some of the elements of a listing agreement? Why are these included?
A lender whose mortgagor has defaulted may be offered a deed in lieu of foreclosure. If he accepts, which of the following will be TRUE? a. Because it is voluntary, it will not be an adverse item on the buyer's credit. b. The lender will take the title subject to any junior liens. c. The lender will usually retain his rights under mortgage insurance or VA guarantee. d. The loan will still be assumable.
Even if you default on your mortgage loan the lender can not begin foreclosure proceedings until the Federal government approves. True or False