What happens to any profit or loss from a property held after closing according to the Licensee Buyout Addendum?

What happens to any profit or loss from a property held after closing according to the Licensee Buyout Addendum?

• A. The seller absorbs the loss
• B. The buyer takes all profit and loss
• C. The broker splits profit and loss
• D. The lender assumes the loss

Answer: (B)

The Licensee Buyout Addendum stipulates that after closing, any profit or loss that arises from the property is entirely absorbed by the buyer. This arrangement is significant because it clarifies the financial responsibilities regarding the property after the transaction has been completed. Essentially, once the property has closed, it is under the buyer's control, and all financial gains or losses related to that property are the buyer's to handle. This reinforces the principle that ownership comes with both rights and responsibilities, which is a fundamental aspect of real estate transactions. By placing the responsibility of profit and loss on the buyer, it helps ensure that the seller is insulated from future market fluctuations affecting the property's value post-closing.

The Licensee Buyout Addendum stipulates that after closing, any profit or loss that arises from the property is entirely absorbed by the buyer. This arrangement is significant because it clarifies the financial responsibilities regarding the property after the transaction has been completed. Essentially, once the property has closed, it is under the buyer's control, and all financial gains or losses related to that property are the buyer's to handle. This reinforces the principle that ownership comes with both rights and responsibilities, which is a fundamental aspect of real estate transactions. By placing the responsibility of profit and loss on the buyer, it helps ensure that the seller is insulated from future market fluctuations affecting the property's value post-closing.