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

This statement implies specific financing terms and conditions, which can invoke the full disclosure requirements of the Truth in Lending Act (TILA). The other options do not detail specific payment amounts, thus allowing for broader advertising without triggering the same regulatory scrutiny.

A (assumable loan) YOUR ANSWER

The term "assumable loan" refers to a type of financing where a buyer can take over the seller's existing mortgage. This statement does not specify any payment amount or terms and therefore does not trigger TILA's full disclosure requirements. It simply indicates the nature of the loan without implying specific financial commitments.

B (owner willing to finance) YOUR ANSWER

This phrase indicates that the owner is open to providing financing options but does not stipulate any specific terms or payment amounts. As such, it remains a general statement that does not trigger the need for full disclosure under TILA, allowing licensees to use it freely in advertising.

C (FHA and VA financing available) YOUR ANSWER

Mentioning that FHA and VA financing is available simply informs potential buyers of financing options without detailing any specific terms or prices. This general statement allows for advertising without invoking the full disclosure requirements set forth by TILA.

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

This statement specifies a monthly payment amount, which could mislead potential buyers about the actual costs and terms of financing. Due to this specificity, it triggers TILA's full disclosure requirements, necessitating a more detailed explanation of financing terms.

Conclusion

To ensure compliance with TILA, real estate licensees must avoid using specific payment amounts in their advertising. "Buy for less than $650 per month" is a statement that could lead to misunderstandings about financing terms, thus requiring full disclosure. In contrast, the other options remain vague enough to prevent triggering such requirements, allowing licensees to promote properties without additional regulatory obligations.

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

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