13. A seller's property is appraised at $100000. The seller and a prospective buyer agree to a sale price of $80000. The buyer suggests writing a second contract to present to the lender showing a sale price of $100000 with an $80000 loan. This contract is legal
Answer: D
This contract is legal under no circumstances.
Creating a second contract that misrepresents the sale price to the lender is illegal, regardless of the appraised value or any party's consent. Such actions constitute fraud.
A) because of the appraised price
This option is incorrect because the appraised price does not justify the creation of a fraudulent contract. The legality of a contract is determined by the honesty of the information presented, not by the appraised value of the property.
B) with the consent of the seller
This option is also incorrect. Even if the seller consents, creating a misleading contract to deceive the lender is illegal. Consent does not make an illegal act lawful.
C) with the consent of the broker
This option is incorrect as well. The consent of the broker does not legitimize the act of presenting false information to a lender. All parties involved must adhere to legal standards, and consent does not excuse illegal behavior.
D) under no circumstances
This option is correct because misrepresenting the sale price with a second contract is illegal in all situations. Engaging in such practices violates ethical standards and legal regulations.
Conclusion
The correct answer is option D, as creating a fraudulent contract violates laws governing real estate transactions. All other options fail because they mistakenly suggest that consent or the appraised price could legitimize an illegal act. The integrity of the transaction must be maintained, and any attempt to deceive lenders is unequivocally unlawful.