Section 14 Multiple Choice Flashcards
A developer purchases 2 lots with 120 ft. frontage each and paid $120,000 total for both lots. He divides these lots into 4 lots of 60 front feet each and sells them for $600 per front foot. What is the developer’s percentage of profit?
50%
40%
30%
[A] 20%
Question Feedback
[Section 14A, Slide 66]; ]; 2×120=240; 240×$600=$144,000; $144,000-$120,000=$24,000; $24,000÷$120,000=0.2 or 20%
Tarrington buys a home and the closing date is for March 10th. The annual property taxes are $2,325 and have not yet been paid. How will this be handled on the closing disclosure?
$433.15 as a debit to the buyer and credit to the seller
[A] $433.15 as a credit to the buyer and debit to the seller
$439.52 as a credit to the buyer and debit to the seller
$439.52 as a debit to the buyer and credit to the seller
Question Feedback
[Section 14D, Slide 13] Calculate the exact number of days; January 31 + February 28 + March 9 = 68 days that the seller owes the buyer. Step 2: Find the daily rate; property taxes for the year $2,325.00÷365 days = $6.3698630137 × 68 = Step 3: Multiply the daily rate x Number of days = $433.15
Which of the following items are not entered on the closing statement as a credit to buyer?
A mortgage taken out by the buyer to purchase the property
[A] Homeowner Association Fees
Prorated property taxes, unpaid interest and paid rents
Rental security deposits held by seller
Question Feedback
[Section 14D, Slide 12]
David assumed seller Sarah’s existing mortgage of $50,125 at closing. Plus, Sarah took out a new mortgage of $125,000. How much are the promissory note doc stamps?
$250.00
$437.50
[A] $613.20
$612.94
Question Feedback
[Section 14C, Slide 45; 49-51] $50,125+$125,000=$175,125÷100=$1,751.25 (ROUND UP); $1,752×.35=$613.20
Eagle Top Realty listed a ranch for $1,500,000. The listing calls for 6% commission to be paid on a sale price of up to $1,000,000 and 7% for anything above $1,000,000. When the property sold for $1,700,000 by Eagle Top Realty, what is the commission paid?
$49,000
[A] $109,000
$60,000
$119,000
Question Feedback
[Section 14A, Slide 38] $1,000,000×.06=$60,000; $700,000×.07=$49,000; $60,000+$49,000=$109,000
A rental investment property is scheduled to close on September 10. The buyer gets day of closing. The rent is $1900. How much is debited and/ or credited at closing and to whom?
$1900 credit to Buyer
$1900 debit to Seller
[A] $1330 Credit to Buyer and $1330 Debit to Seller
$1330 Debit to Buyer and $1300 Credit to Seller
Question Feedback
[Section 14B, Slide 78] $1,900÷30=63.3333333×21= $1,330
A broker’s listing agreement with a seller states that 4 ½ % is to be paid on the sales price as commission. The associate lists and sells the property for $450,000 earning the full commission. The broker has specified that the associate receives 55% of the total commission. earned. How much will the associate be paid on this sale?
$24,750
$20,250
[A] $11,137.50
$12,750
Question Feedback
[Section 14A, Slide 38] $450,000×.045=$20,250×0.55=$11,137.50
ABC Realty broker lists a waterfront home for $2,000,000. The listing calls for 3% commission up to $1,250,000 and 4% from $1,250,000 to $1,750,000. Furthermore, there is a provision for 5% for anything above $1,750,000. The property sells for $1,900,000 by ABC Realty, what is the commission paid to ABC Realty?
$37,500
$20,000
[A] $65,000
$60,000
Question Feedback
[Section 14A, Slide 38] $1,250,000×.03=$37,500; $500,000×.04=$20,000; $150,000×.05=$7,500; $37,500+$20,000+$7,500=$65,000
You are the listing agent representing seller Nancy. You listed her house for $350,000 at 6% commission. You offered 2.5% to a buyer’s agent as a co-brokerage in the MLS. After 3 months on the market, you sell the house yourself for $325,000 to buyer Tim. Based on your agreement with your broker, your broker keeps 25% of the commission and pays you the rest. How much do you pocket?
[A] $14,625
$7,312.50
$15,750
$4,875
Question Feedback
[Section 14A, Slide 38] $325,000×0.06=$19,500×.75=$14,625
An assumed mortgage has interest paid how?
[A] In arrears
Ahead
At the end of the loan
At the beginning of the loan
Question Feedback
[Section 14C, Slide 19]
If the total sales price on a property is $725,000 with $300,000 down, how much are the doc stamp tax on the deed?
$5,775
$2,100
$2,537.50
[A] $5,075.00
Question Feedback
[Section 14C, Slide 45] $725,000÷100=$7,250×.70=$5,075
Rubio purchased property from Covington. Rubio puts $50,000.00 down and gets a mortgage in the amount of $450,000.00. How much will Covington be charged for the doc stamp tax on the deed?
$350,000.00
[A] $3,500.00
$900.00
$1,750.00
Question Feedback
[Section 14C, Slide 45] $450,000+$50,000=$500,000÷100=$5,000×0.70=$3,500
A home is scheduled to close on June 15th. On the first of the month, the seller collected $1,250 in rent for all of June. Using the actual number of days in the closing month and giving the buyer day of closing, calculate the proration and indicate how it is handled on the closing statement.
[A] $666.67 debit to the seller and credit to the buyer
$666.67 credit to the seller and debit to the buyer
$625 debit to the seller and credit to the buyer
$625 credit to the seller and debit to the buyer
Question Feedback
[Section 14B, Slide 78] $1,250÷30=41.666666×16=$666.6666666 or $666.67
A buyer provided a $5,000 check upon entering into a purchase and sale agreement. On the closing statement, how is the deposit entered?
$5,000 debit to the buyer
[A] $5,000 credit to the buyer
$5,000 debit to the seller
$5,000 credit to the seller
Question Feedback
[Section 14D, Slide 23]
A house sells for $167,550 with the purchaser assuming a mortgage loan for $127,800 and a new mortgage of $20,000 is also taken out, what is the total doc stamps tax due on the mortgages including intangible and the state tax on a promissory note?
$517.30
$110.00
$40.00
[A] $557.30
Question Feedback
[Section 14C, Slide 45] $127,800+ $20,000= $147,800/100= $1,478×.35= $517.30; $20,000×.002=$40; $517.30+$40=$557.30
