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Real Estate License > Closings > Flashcards

Closings Flashcards

1
Q

What are good funds? in relation to a closing

A

Good funds are funds that are immediately available to the closing company for deposit and disbursement, such as cashier’s checks, certified checks, and wire transfers.

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2
Q

Prepaid items are expenses that the seller has paid for and not yet used. These will appear as __ for the seller and __ for the buyer.

A

Prepaid items are expenses that the seller has paid for and not yet used. These will appear as credits for the seller and debits for the buyer.

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3
Q

Accrued expenses are items owed by the seller, and will go in the seller’s __ column.

A

Accrued expenses are items owed by the seller, and will go in the seller’s debit column.

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4
Q

Earnest money is recorded as a __ in the buyer column and a __ in the broker column of the Colorado Worksheet for Closing Statement.

A

Earnest money is recorded as a credit in the buyer column and a debit in the broker column of the Colorado Worksheet for Closing Statement.

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5
Q

Purchase price is recorded as a __ in the seller column of the closing statement worksheet, and a __ in the buyer column.

A

Purchase price is recorded as a credit in the seller column of the closing statement worksheet, and a debit in the buyer column.

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6
Q

Who are the parties to escrow?

A

Buyer, seller, lender, and closing agent

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7
Q

What contract types are closed on at closing?

A

Sale agreement, mortgage loan commitment, title insurance contract, listing agreement, brokerage agreement, compensation agreement

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8
Q

What form do licensees use to modify or delete date-related provisions in the sales contract?

A

Agreement to Amend/Extend Contract form

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9
Q

An agreement that gives the closing agent the right to collect information from all parties in the transaction, in order to facilitate closing

A

Closing instructions

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10
Q

Document signed and agreed to at closing that reconciles both the buyer’s and the seller’s final financial obligations

A

Closing Statement

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11
Q
A
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12
Q

A document provided to help borrowers understand all of the costs associated with the transaction

A

Closing Disclosure

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13
Q

A document that summarizes key loan terms and gives an estimate of loan and closing costs (replaces the early Truth in Lending Statement and the Good Faith Estimate in 2015)

A

Loan Estimate

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14
Q

What does RESPA stand for?

A

Real Estate Settlement Procedures Act

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15
Q

What does TILA stand for?

A

Truth in Lending Act

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16
Q

A document that specifies the status of the title of a piece of real property, and the terms under which a title insurance policy for the property will be issued

A

Title commitment

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17
Q

The __ provides proof of the status of the property taxes. It’s paid for by the buyer.

A

The tax certificate provides proof of the status of the property taxes. It’s paid for by the buyer.

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18
Q

Lenders must provide borrowers with a copy of the Closing Disclosure form a minimum of __ business days before closing on the loan.

A

Lenders must provide borrowers with a copy of the Closing Disclosure form a minimum of three business days before closing on the loan.

19
Q

Brokers are required to keep closing documents for __ years after closing. Brokers may retain photocopies or electronic copies because they’re not required to have original signatures.

A

Brokers are required to keep closing documents for four years after closing. Brokers may retain photocopies or electronic copies because they’re not required to have original signatures.

20
Q

How is this transaction recorded on the closing worksheet:

HOA transfer / status letter fee

A

Debit seller
Credit Broker

20
Q

How is this transaction recorded on the closing worksheet:

Title insurance premium - owner’s

A

Debit seller
Credit lender

21
Q

How is this transaction recorded on the closing worksheet:

Broker’s fee

A

Debit Seller
Credit Broker

22
Q

How is this transaction recorded on the closing worksheet:

Taxes for the current year

A

Debit Seller
Credit Buyer

23
Q

How is this transaction recorded on the closing worksheet:

Real Estate Closing Fee

A

Debit Seller
Credit Broker

24
Q

How is this transaction recorded on the closing worksheet:

HOA - CIC document procurement fee

A

Debit Seller
Credit Broker

25
Q

How is this transaction recorded on the closing worksheet:

Purchase Price

A

Debit to buyer
Credit to Seller

26
Q

How is this transaction recorded on the closing worksheet:

HOA Dues

A

Debit to Buyer
Credit to Seller

27
Q

What type of insurance must FHA borrowers pay if they have less than a 20% down payment?

A

Mortgage Insurance Premium (MIP)

28
Q

Who typically pays for Owner’s title insurance policy?

A

Seller

29
Q

who typically pays for the lender’s title insurance policy?

A

Buyers

30
Q

Who typically pays for the Owner’s title insurance extended coverage

A

Buyers

31
Q

How is this transaction recorded on the closing worksheet:

Certificate of taxes due

A

Debit to buyer
Credit to broker

32
Q

How is this transaction recorded on the closing worksheet:

Loan origination fee

A

Debit to buyer
Credit to Lender

33
Q

How is this transaction recorded on the closing worksheet:

Real estate closing fee

A

Debit to buyer
Credit to broker

34
Q

How is this transaction recorded on the closing worksheet:

Documentary fee

A

Debit to buyer
Credit to lender

35
Q

How is this transaction recorded on the closing worksheet:

Deed Recording

A

Debit to buyer
Credit to Lender

36
Q

For seller-financed transactions, the seller and the lender are one and the same. How does the loan amount appear on the worksheet?

A

Seller Debit
Buyer Credit

37
Q

How is this transaction recorded on the closing worksheet: (Assuming Seller Financed)

Purchase Price

A
38
Q

How is the broker’s commission typically documented on the Colorado closing worksheet?

A

Credit to the broker, debit to the seller

39
Q

How is the Colorado documentary fee recorded on the closing worksheet for a new conventional loan?

A

Debit to buyer and no credit noted

40
Q

Who traditionally pays the closing fees for a Colorado real estate transaction?

A

The buyer and seller split them

41
Q

What is seller carry

A

A loan transaction in which the seller finances a portion (or all) of the buyer’s loan amount for the property

42
Q
A

Real Estate License (5 decks)

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