In Colorado, a 'short sale' occurs when:
Why The seller's lender agrees to accept less than the full mortgage payoff amount from the sale proceeds Is Correct
Answer B: The seller's lender agrees to accept less than the full mortgage payoff amount from the sale proceeds
Exam Tip: Contracts
Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.
Key Contracts Terms in This Question
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Key Terms to Know
A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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