Contracts
An Iowa installment land contract is subject to which risk for the buyer?
AThe risk that the property will appreciate too quickly
BThe risk that the seller may default on their own underlying mortgage, potentially causing the buyer to lose their equitable interest✓ Correct
CThe risk that property taxes will increase
DThe risk that the Iowa homestead exemption will not apply
Explanation
Under an Iowa land contract, the buyer makes payments to the seller while the seller retains legal title. If the seller defaults on their own mortgage, the lender may foreclose, potentially extinguishing the buyer's equitable interest if the buyer was not properly protected.
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