Illinois Real Estate Exam Practice Question
A seller discovers that a property is worth less than the outstanding mortgage balance. The seller may still be able to sell the property if the lender agrees to a
Correct Answer: A
Rationale: A short sale allows the seller to sell the property for less than the mortgage balance, with the lender's approval to forgive the remaining debt. This option is viable when the property’s market value is insufficient to cover the mortgage.
A deed in lieu involves transferring the property to the lender to settle the mortgage but does not allow for a sale, making it less favorable for the seller.
A balloon payment refers to a large final payment due at the end of a loan term, which does not apply here.
A reverse mortgage is designed for homeowners aged 62 and older to access home equity, not for selling properties.
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