To avoid triggering full disclosure under TILA when advertising financing availability on a listed property, which of the following statements must a real estate licensee avoid using?

Rationale

Real estate licensees must avoid using the statement "buy for less than $650 per month" to avoid triggering full disclosure under TILA.

This statement implies a specific financing arrangement that could lead to potential misrepresentation of the actual costs and terms of financing, thus necessitating full disclosure under the Truth in Lending Act (TILA).

A (assumable loan) YOUR ANSWER

Using the term "assumable loan" refers to a financing option where a buyer can take over the seller's existing mortgage. This term does not inherently suggest specific payment amounts or terms that would require full disclosure, making it permissible under TILA guidelines.

B (owner willing to finance) YOUR ANSWER

The phrase "owner willing to finance" indicates that the seller is open to providing financing but does not specify any payment amounts or conditions. Therefore, it does not trigger TILA requirements and remains compliant with advertising regulations.

C (FHA and VA financing available) YOUR ANSWER

Mentioning "FHA and VA financing available" simply refers to the types of loans that can be accessed and does not imply specific financial terms or monthly payments. As such, this statement does not require additional disclosures under TILA.

D (buy for less than $650 per month) CORRECT

This statement suggests a specific financial commitment and payment amount, which could mislead potential buyers regarding the true cost of the financing. This specificity is what triggers TILA's requirements for full disclosure, making it critical for licensees to avoid such phrasing in advertisements.

Conclusion

To comply with TILA when advertising financing options, real estate licensees must avoid using phrases that imply specific payment amounts, such as "buy for less than $650 per month." Other options like "assumable loan," "owner willing to finance," and "FHA and VA financing available" do not carry the same implications and therefore do not trigger the need for full disclosure. Ensuring proper language in advertisements protects both the licensee and potential buyers from misunderstandings regarding financing terms.

To avoid triggering full disclosure under TILA when advertising financing availability on a listed property, which of the following statements must a real estate licensee avoid using?

Real estate licensees must avoid using the statement "buy for less than $650 per month" to avoid triggering full disclosure under TILA.

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