(14) Real Estate-Related Computations and Closing of Transactions

Question 1

how are prorations on a closing statement, determined on the day of closing

Answer 1

by agreement

Question 2

How are expenses paid to a third party entered on a closing statement

Answer 2

Debits

Question 3

How is the amount of a mortgage loan assumed at closing by the buyer entered on the closing statement

Answer 3

Double entry

Question 4

How is the amount of a new mortgage obtained by the buyer entered on the closing statement

Answer 4

Credit to the buyer

Question 5

In a residential transaction, how is the brokerage fee reflected on the closing statement

Answer 5

Debit to the seller

Question 6

How is earnest money deposit held in escrow reflected on the closing statement

Answer 6

Credit to the buyer

Question 7

Which document stipulates which party pays which expense in a closing

Answer 7

Purchase and sale contract

Question 8

What is the purpose of the closing statement

Answer 8

To summarize the financial aspects of a real estate transaction