Property Ownership

A Washington property owner wants to sell to a specific buyer at below market value. The property is encumbered by a deed of trust with $300,000 owed. The lender's approval is needed for which type of sale?

AAny below-market-value sale
BA short sale, where the proceeds are less than the outstanding loan balance✓ Correct
CAny sale involving seller financing
DAll sales require lender approval

Explanation

A short sale occurs when a property is sold for less than the amount owed to the lender, requiring the lender's written approval to accept less than full payoff and release the deed of trust lien. Lender approval is mandatory because the lender would otherwise not receive full payment.

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