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 specific financing terms that can lead to misinterpretation of loan obligations and costs, thus requiring full disclosure under the Truth in Lending Act (TILA). By avoiding this phrasing, licensees can sidestep the complexities of TILA requirements related to advertising.

A (assumable loan) YOUR ANSWER

An "assumable loan" does not inherently trigger TILA disclosures, as it refers to a loan that can be transferred to a buyer without requiring a refinance. This term does not imply specific payment amounts or terms that would necessitate additional disclosures under TILA, making it a permissible statement in advertising.

B (owner willing to finance) YOUR ANSWER

Saying "owner willing to finance" also does not automatically invoke TILA disclosures. This phrase indicates that the property seller is open to providing financing options without detailing specific terms or payment amounts, thus remaining compliant with TILA advertising rules.

C (FHA and VA financing available) YOUR ANSWER

The mention of "FHA and VA financing available" refers to specific loan types that may be accessible to buyers but does not specify payment terms or conditions. As such, this statement is typically permissible and does not trigger the need for full disclosure under TILA.

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

This statement specifies a particular monthly payment amount, which implies certain financing terms and conditions that require full disclosure under TILA. By including this phrasing, a real estate licensee could mislead potential buyers regarding their financing obligations, thus necessitating compliance with detailed disclosure requirements.

Conclusion

To comply with TILA regulations, real estate licensees should avoid stating specific monthly payment amounts like "buy for less than $650 per month." This type of language can mislead consumers and trigger the need for extensive disclosures. In contrast, terms like "assumable loan" or "owner willing to finance" do not imply specific financial obligations and therefore do not require the same level of disclosure. Understanding these distinctions is crucial for effective and compliant real estate advertising.

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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