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BC Real Estate Trading Services Licensing Exam Practice · Question

A buyer is negotiating to purchase a commercial property in Kelowna for $1,200,000. The seller agrees to provide a portion of the financing, specifically $250,000, with specified interest rates and terms. What is this type of financing arrangement called?

A vendor take-back mortgage (also known as a seller-financed mortgage) occurs when the seller of a property acts as the lender to the buyer for some or all of t

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Question: A buyer is negotiating to purchase a commercial property in Kelowna for $1,200,000. The seller agrees to provide a portion of the financing, specifically $250,000, with specified interest rates and terms. What is this type of financing arrangement called?

Answer options:

  • A bridge loan.
  • A conventional mortgage. ✅ A vendor take-back mortgage.
  • A chattel mortgage.

Correct answer: A vendor take-back mortgage.

Explanation: A vendor take-back mortgage (also known as a seller-financed mortgage) occurs when the seller of a property acts as the lender to the buyer for some or all of the purchase price.

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