Chapter 21: Closings Flashcards
The purpose of the closing event is too…
Exchange legal title for the sale price
A buyer’s financing arrangements are often concluded at closing, because…
The lender wants to ensure proper handling of the collateral for the loan
The real estate settlement procedures act prescribes closing procedures that must be followed whenever…
The loan is to be sold to the FNMA
Sale contract stipulates that the buyer is to pay the seller’s title insurance expenses. This practice is not customary in the area. In this case…
The buyer must pay the expense
A prorated expense on the settlement statement is…
A debit to one party and a credit to the other
The amount a buyer owes a closing is equal to…
The excess of the buyers debits over the buyers credits
Which of the following are examples of closing items not prorated between buyer and seller?
Inspection fees
Which of the following items are paid in arrears?
Taxes and interest
Which of the following items are paid in advance?
Rents and insurance
If a sale contract indicates that the day of closing is “the sellers day” this means that…
The seller must pay prorated expenses inclusive of the day of closing
Documentary stamps are used to…
Document the payment of a transfer tax
What is the internal revenue services form 1099-S?
A form that summarizes and reports transaction data from the closing
Assume a seller at closing must pay transfer taxes at the rate of one dollar for every $500 of the purchase price, or fraction thereof. If the sale price is $345,600, how much tax as the seller pay?
$692
If a seller paid $488 for transfer taxes at closing, and the rate was one dollar for every $400 or fraction thereof of the sale price, what was the sale price?
$195,200
