### What is a seller carry-back? - [x] The part of a home loan the seller is willing to finance - [ ] A government grant for homebuyers - [ ] A buyer's down payment assistance program - [ ] A type of property insurance > **Explanation:** A seller carry-back is a situation where the seller finances a part of the home loan for the buyer. The seller provides a deed against the property and receives a promissory note from the buyer for the amount due. This helps buyers who might not qualify for a traditional mortgage. ### Why might a buyer opt for a seller carry-back loan? - [ ] Because it eliminates the need for a down payment - [x] Because they are unable to secure a traditional mortgage - [ ] Because it provides an automatic equity in the property - [ ] Because it comes with high closing costs > **Explanation:** A seller carry-back loan is typically used when a buyer is unable to secure a traditional mortgage. This form of financing provides an alternative method for the buyer to purchase a property and often comes with lower interest rates and no closing costs. ### What document does the seller receive in a seller carry-back transaction to indicate the amount due on the mortgage? - [ ] An equity certificate - [x] A promissory note - [ ] A satisfaction of mortgage - [ ] A title deed > **Explanation:** In a seller carry-back transaction, the seller takes a promissory note from the buyer, which indicates the amount due on the mortgage. This document serves as a legal commitment from the buyer to pay back the loan. ### How does a seller benefit from a seller carry-back transaction? - [x] Secures a buyer for a difficult-to-sell property and generates income - [ ] Gains immediate full payment for the property value - [ ] Avoids any legal documentation - [ ] Shifts the home repair responsibilities to the lender > **Explanation:** The seller benefits by securing a buyer for a property that may have undesirable issues and generating continuous income. Furthermore, home repair responsibilities usually shift to the buyer. ### Which of the following is NOT an advantage for the buyer in a seller carry-back transaction? - [ ] Lower interest rates - [ ] No closing costs - [ ] Opportunity to improve credit over time - [x] Immediate home ownership without financial commitments > **Explanation:** While a seller carry-back loan offers many advantages like lower interest rates and no closing costs, it does not provide immediate home ownership without financial commitments. The buyer is still committed to paying back the loan over time while also improving their credit. ### What is a common advantage for the seller in a seller carry-back agreement? - [ ] Immediate full price payment for the property - [ ] Avoiding all legal processes involved in selling property - [x] Continued income from the property - [ ] Freedom from all repair responsibilities > **Explanation:** One of the main advantages for the seller in a seller carry-back agreement is continued income from the property, as they receive consistent payments from the buyer. ### Over time, what opportunity does a buyer have with a seller carry-back loan? - [ ] Ability to refinance for free - [ ] Immediate full ownership of property without payments - [ ] Opportunity to extend the loan indefinitely - [x] Opportunity to improve their credit and enter into a conventional home loan > **Explanation:** Over time, a buyer has the opportunity to improve their credit and potentially enter into a conventional home loan, allowing them to refinance themselves out of the seller carry-back agreement. ### What does the seller hold as security in a seller carry-back arrangement? - [x] A deed against the property - [ ] Personal credit score of the buyer - [ ] Bank guarantee from the buyer - [ ] A government bond > **Explanation:** In a seller carry-back arrangement, the seller holds a deed against the property as security. This ensures that if the buyer defaults on the loan, the seller retains an interest in the property. ### Which scenario is most likely to use a seller carry-back arrangement? - [ ] A buyer with excellent credit and down payment ready - [ ] A newly constructed home purchase backed by a bank - [ ] A cash purchase offer - [x] A buyer with poor credit struggling to secure a traditional mortgage > **Explanation:** A seller carry-back arrangement is commonly used when a buyer has poor credit and is unable to secure a traditional mortgage. This arrangement offers an alternative method of financing a home purchase. ### What is NOT a feature of a seller carry-back arrangement? - [ ] Lower interest rates - [ ] No closing costs - [x] Immediate relief from property ownership for the seller - [ ] A promissory document from the buyer > **Explanation:** While a seller carry-back arrangement offers lower interest rates and no closing costs, it does not provide immediate relief from property ownership for the seller. The seller continues to have financial interest in the property until the loan is fully repaid.