Contracts
A Connecticut real estate contract specifies that the seller will carry back a second mortgage for $50,000 to help the buyer with financing. This arrangement is called:
AA land contract
BSeller financing or a purchase money mortgage✓ Correct
CA bridge loan
DA wrap-around mortgage
Explanation
When a seller provides financing to a buyer as part of the purchase, it is called seller financing or a purchase money mortgage. The seller essentially acts as a lender for a portion of the purchase price.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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