Please answer the question and give the explanation 3. When would seller financi

Question

Please answer the question and give the explanation

3. When would seller financing of real estate not be used? a. the seller wants to use the installment method of reporting the gain from sale b. the buyer does not qualify for a conventional mortgage loan c. third party mortgage financing is less expensive and easily available d. the seller desires to artificially raise the price of the property by offering a lower 8 than market interest rate on the seller financing 4. Which of the following would be used in the cost approach to value? (A) Estimate net operating income of the property (B) Subtract accrued depreciation from the assessed property value (C)Add the depreciated replacement cost to the current land value (D)Determine the market value of comparable properties

Explanation / Answer

3)

Explanation: In seller financing seller of the house or real estate property provides the loan to buyer to purchase the same property. Here buyer needs to make down payment to seller and agreed installments to seller. In general loan is secured by the property being sold.

Seller Charges some interest also on the finance made by it.

However if the interest charged by Seller is more or expensive than outside finance then it make no sense to take finance

Answer: (C) Third-party mortgage financing is less expensive or easily available

4)

Explanation:

Cost approach is that the price of any real estate property will not be greater than its cost (Cost means Cost of Land + Cost of Construction - Depreciation).

Hence formula for Value= Cost of acquisition + Cost of Construction - Depreciation.

Hence we need to subtract the depreciation from assed Value.

Answer: (B) Subtract accrued depreciation from the assessed property Value.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---