Settlement Flashcards
Which of the following services does escrow handle as part of a closing?
a. loans and liens
b. prorations
c. TRID Closing Disclosure
B. Prorations
If money is not withheld from the seller’s proceeds for property sold by a nonresident alien, who may be held liable for the tax?
a. escrow
b. buyer
c. broker
d. no one
B. Buyer
The federal law that requires nonresident aliens to pay tax on gains from the sale of U.S. property is:
a. RESPA
b. FIRPTA
c. TILA
d. ECOA
b. FIRPTA
What does an escrow company do?
a. process loan forms
b. authorize commission payments
c. offer title insurance
d. calculate prorations
D. calculate prorations
How would a $20,000 seller carryback loan appear on a closing statement?
a. charge/debt to buyer and credit to seller
b. credit to buyer and debit to seller
c. only as a credit to buyer
d. only as a charge/debit to seller
B.
Which statement is the most correct regarding costs at a settlement?
a. the buyer is credited with the interest paid in advance on a new loan
b. seller is charged/debited for the prepaid insurance premium
c. seller is charged/debited for impounds
d. seller is credited for insurance the seller has prepaid
D.
If a buyer is financing the purchase with a new $100.000 loan, how would the loan appear on the closing statement?
a. Credit to the seller
b. charge/debit to the seller
c. charge/debit to the buyer
d. credit to the buyer
D.
When a rental property is sold, how are security deposits handled on the settlement statement?
a. charge/debit the seller and charge/debit the buyer
b. only as a credit to the seller
c. credit the buyer and charge/debit the seller
d. only as a charge to the buyer
C.
On a closing statement a $5000 earnest money deposit is shown as a credit to the buyer but is not shown on the seller’s statement because?
a. the earnest money will be refunded to the buyer
b. it is included in the purchase price
c. the seller will receive it only if the buyer backs out of the purchase
d. it will be paid to the seller outside of escrow
B. included in the purchase price
The amount of cash that a buyer must bring to closing will appear on the settlement statement as:
a. the total of charges/debits to the buyer
b. the seller’s credits minus the seller’s charges
c. the buyer’s charges/debits minus the buyer’s credits
the purchase price minus the earnest money
C
On a settlement sheet, rent paid in advance would be a:
a. credit to the seller
b. charge/debit to the buyer
c. credit to the buyer and a charge/debit to the seller
d. credit buyer only
C
On a settlement sheet, what is usually true?
a. Seller is charged/debited for pre-paid insurance
b. seller is credited for interest to date
c. buyer is credited for unpaid taxes
d. buyer is credited for pre-paid insurance
C. Buyer is credited for unpaid taxes
Who signs the settlement statement at closing:
a. buyer
b. seller
c. settlement agent
d. buyer and seller
D. buyer and seller
You are closing on a property at the end of March where the seller has not paid for the second-half taxes of the previous year. Which of the following is true?
a. charge/debit seller 6 mos taxes, credit buyer 6 mos taxes
b. charge/debit seller 6 mos taxes, credit buyer 9 mos taxes
c. charge/debit seller for 9 mos taxes, credit buyer 9 mos taxes
d. charge/debit seller for 9 mos taxes, credit buyer 3 mos taxes
D. charge/debit seller for 9 mos taxes, credit buyer 3 mos taxes
RENTAL PROPERTY SECURITY DEPOSITS:
HELD BY THE SELLER ARE TRANFERRED IN FULL TO THE BUYER
- DO NO PRORATE AND DEBIT SELLER AND CREDIT BUYER
