California Real Estate Practice Exam

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What are a buyer's rights if the CRV on a VA loan is less than the purchase price and the contract was signed prior to receiving the CRV?

Renegotiate the loan amount
Cancel the contract under specific contingencies
Pay the difference in cash
Obtain a supplemental loan

The correct answer is: Cancel the contract under specific contingencies

If a buyer signs a contract for a VA loan and later finds out that the Certificate of Reasonable Value (CRV) is less than the purchase price, they have the right to cancel the contract under specific contingencies. This option allows the buyer to back out of the contract without penalty and find a different financing option or negotiate the terms of the loan with the seller. Option A is incorrect because renegotiating the loan amount is not a valid solution in this situation. The buyer cannot force the lender to change the CRV. Option C is incorrect because the buyer may not have the cash on hand to cover the difference in price. Option D is incorrect because obtaining a supplemental loan is not guaranteed and may not cover the full difference in price. Therefore, the best option for the buyer in this situation is to cancel the contract under specific contingencies and explore other financing options.