Closings Flashcards
What are good funds? in relation to a closing
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.
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.
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.
Accrued expenses are items owed by the seller, and will go in the seller’s __ column.
Accrued expenses are items owed by the seller, and will go in the seller’s debit column.
Earnest money is recorded as a __ in the buyer column and a __ in the broker column of the Colorado Worksheet for Closing Statement.
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.
Purchase price is recorded as a __ in the seller column of the closing statement worksheet, and a __ in the buyer column.
Purchase price is recorded as a credit in the seller column of the closing statement worksheet, and a debit in the buyer column.
Who are the parties to escrow?
Buyer, seller, lender, and closing agent
What contract types are closed on at closing?
Sale agreement, mortgage loan commitment, title insurance contract, listing agreement, brokerage agreement, compensation agreement
What form do licensees use to modify or delete date-related provisions in the sales contract?
Agreement to Amend/Extend Contract form
An agreement that gives the closing agent the right to collect information from all parties in the transaction, in order to facilitate closing
Closing instructions
Document signed and agreed to at closing that reconciles both the buyer’s and the seller’s final financial obligations
Closing Statement
A document provided to help borrowers understand all of the costs associated with the transaction
Closing Disclosure
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)
Loan Estimate
What does RESPA stand for?
Real Estate Settlement Procedures Act
What does TILA stand for?
Truth in Lending Act
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
Title commitment
The __ provides proof of the status of the property taxes. It’s paid for by the buyer.
The tax certificate provides proof of the status of the property taxes. It’s paid for by the buyer.
Lenders must provide borrowers with a copy of the Closing Disclosure form a minimum of __ business days before closing on the loan.
Lenders must provide borrowers with a copy of the Closing Disclosure form a minimum of three business days before closing on the loan.
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.
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.
How is this transaction recorded on the closing worksheet:
HOA transfer / status letter fee
Debit seller
Credit Broker
How is this transaction recorded on the closing worksheet:
Title insurance premium - owner’s
Debit seller
Credit lender
How is this transaction recorded on the closing worksheet:
Broker’s fee
Debit Seller
Credit Broker
How is this transaction recorded on the closing worksheet:
Taxes for the current year
Debit Seller
Credit Buyer
How is this transaction recorded on the closing worksheet:
Real Estate Closing Fee
Debit Seller
Credit Broker
How is this transaction recorded on the closing worksheet:
HOA - CIC document procurement fee
Debit Seller
Credit Broker
How is this transaction recorded on the closing worksheet:
Purchase Price
Debit to buyer
Credit to Seller
How is this transaction recorded on the closing worksheet:
HOA Dues
Debit to Buyer
Credit to Seller
What type of insurance must FHA borrowers pay if they have less than a 20% down payment?
Mortgage Insurance Premium (MIP)
Who typically pays for Owner’s title insurance policy?
Seller
who typically pays for the lender’s title insurance policy?
Buyers
Who typically pays for the Owner’s title insurance extended coverage
Buyers
How is this transaction recorded on the closing worksheet:
Certificate of taxes due
Debit to buyer
Credit to broker
How is this transaction recorded on the closing worksheet:
Loan origination fee
Debit to buyer
Credit to Lender
How is this transaction recorded on the closing worksheet:
Real estate closing fee
Debit to buyer
Credit to broker
How is this transaction recorded on the closing worksheet:
Documentary fee
Debit to buyer
Credit to lender
How is this transaction recorded on the closing worksheet:
Deed Recording
Debit to buyer
Credit to Lender
For seller-financed transactions, the seller and the lender are one and the same. How does the loan amount appear on the worksheet?
Seller Debit
Buyer Credit
How is this transaction recorded on the closing worksheet: (Assuming Seller Financed)
Purchase Price
How is the broker’s commission typically documented on the Colorado closing worksheet?
Credit to the broker, debit to the seller
How is the Colorado documentary fee recorded on the closing worksheet for a new conventional loan?
Debit to buyer and no credit noted
Who traditionally pays the closing fees for a Colorado real estate transaction?
The buyer and seller split them
What is seller carry
A loan transaction in which the seller finances a portion (or all) of the buyer’s loan amount for the property
