Escrow & Title
RESPA requires that when a seller requires the use of a particular title company as a condition of sale, the seller must:
APay all title insurance costs
BDisclose this requirement and may not require use if illegal under applicable state law✓ Correct
CPay the buyer's title insurance premium
DObtain GREC approval
Explanation
RESPA allows sellers to require the use of a particular title company but prohibits receiving undisclosed compensation for the referral. The requirement must be disclosed to the buyer.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
State-Specific Concepts
GREC Regulation
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