Who can fund the purchase under a Licensee Buyout Addendum?

Who can fund the purchase under a Licensee Buyout Addendum?

• A. The buyer/broker is a licensee and can fund the purchase
• B. The seller funds the purchase
• C. A third-party lender funds the purchase
• D. A title company funds the purchase

Answer: (A)

The key idea is that a Licensee Buyout Addendum governs a situation where the licensee themselves steps in as the buyer. In this setup, the funds for the purchase come from the buyer—who is also the licensee—either with their own money or with financing in the buyer’s name. This keeps the transaction transparent and avoids implying that the brokerage, a seller, or an unrelated third party is funding the purchase. The addendum is designed to address potential conflicts of interest by ensuring the licensee-buyer’s role and funding are disclosed and agreed upon. Funding by a seller, a title company, or a third-party lender would change the dynamic and isn’t what the addendum is about in this context; the essence is that the licensee-buyer provides or arranges the funds themselves.

The key idea is that a Licensee Buyout Addendum governs a situation where the licensee themselves steps in as the buyer. In this setup, the funds for the purchase come from the buyer—who is also the licensee—either with their own money or with financing in the buyer’s name. This keeps the transaction transparent and avoids implying that the brokerage, a seller, or an unrelated third party is funding the purchase. The addendum is designed to address potential conflicts of interest by ensuring the licensee-buyer’s role and funding are disclosed and agreed upon. Funding by a seller, a title company, or a third-party lender would change the dynamic and isn’t what the addendum is about in this context; the essence is that the licensee-buyer provides or arranges the funds themselves.