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 stating "buy for less than $650 per month" to prevent triggering full disclosure under TILA.

This statement implies a specific monthly payment that could lead to assumptions about financing terms, thus necessitating additional disclosures under the Truth in Lending Act (TILA).

A (assumable loan) YOUR ANSWER

An "assumable loan" indicates that a buyer can take over the seller's existing mortgage, which does not inherently require additional disclosures under TILA. This term is more about the nature of the loan rather than a specific payment amount or financing conditions, keeping it compliant with advertising regulations.

B (owner willing to finance) YOUR ANSWER

The phrase "owner willing to finance" suggests that the seller is open to providing financing options, which does not specify any payment terms or conditions. As such, this statement can be used without triggering TILA disclosures, allowing flexibility in negotiations without detailing financing terms.

C (FHA and VA financing available) YOUR ANSWER

Mentioning "FHA and VA financing available" refers to specific loan programs that offer certain benefits to eligible buyers. This statement does not imply any specific payment amounts or terms, thus remaining compliant with TILA and not requiring further disclosures.

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

This statement suggests a specific financial arrangement that could mislead potential buyers regarding the costs associated with financing, prompting the need for full disclosure under TILA. By specifying a monthly payment, it implies certain loan terms, which could misrepresent the actual financial obligation and necessitate additional disclosures.

Conclusion

In real estate advertising, clarity and compliance with regulations like TILA are crucial. While terms such as "assumable loan," "owner willing to finance," and "FHA and VA financing available" are permissible, stipulating a specific payment amount like "buy for less than $650 per month" can mislead consumers and trigger mandatory disclosures. Proper understanding of these terms ensures that real estate professionals navigate advertising laws effectively while safeguarding consumer interests.

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 stating "buy for less than $650 per month" to prevent triggering full disclosure under TILA.

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