Question 14

The buyer is legally responsible for paying the points.

Despite the oral agreement between the buyer and seller indicating that the seller would pay the discount points on the buyer's FHA loan, the executed contract mistakenly states that the buyer is responsible. In legal terms, the written contract takes precedence over the oral agreement, making the buyer responsible for the payment.

A) buyer

This option is correct because the executed contract, which is the legally binding document, clearly states that the buyer is responsible for the points. Even though there was an oral agreement to the contrary, the written contract governs the obligations of the parties involved.

B) seller

This option is incorrect. Although the seller and buyer initially agreed that the seller would pay the points, the written contract does not reflect this agreement. Therefore, the seller is not legally obligated to pay the points as per the executed contract.

C) buyer and seller divide them equally

This option is incorrect as well. The written contract does not provide for the points to be divided between the buyer and seller. Since the contract specifies that the buyer pays the points, there is no legal basis for dividing the responsibility.

D) buyer, seller, and broker divide them equally

This option is also incorrect. The inclusion of the broker does not change the fact that the contract clearly states the buyer is responsible for the points. There is no provision in the contract for equal division of the payment among the buyer, seller, and broker.

Conclusion

In summary, the buyer is legally responsible for paying the points because the executed contract explicitly states this obligation, overriding any prior oral agreement. All other options fail to reflect the legal reality established by the written contract, which is binding and must be followed.