Under the TREC Third Party Financing Addendum, the buyer must make a good faith effort to obtain financing. All of the following would demonstrate good faith EXCEPT:
Correct Answer
A) Intentionally changing jobs to reduce income and cause the loan to be denied
Intentionally reducing income to cause loan denial is not good faith. The buyer has an obligation to make a diligent effort to obtain financing approval. Deliberately sabotaging the loan process would be a breach of the good faith requirement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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