Transaction Process Part I

Question 1

Name three items in the real estate transaction process

Answer 1

Receive and review all Offer to Purchase contracts submitted by buyers or buyer’s agents
Evaluate offer(s) and prepare a “net sheet” on each for the owner for comparison purposes
Counsel seller on offers. Explain merits and weakness of each component of each offer
Contact buyer’s agents to review buyer’s qualifications and discuss offer

Question 2

The listing broker is responsible for the accuracy of what for closing?

Answer 2

The settlement statements and making sure that all parties get signed copies of the settlement statements

Question 3

The brokers that earn a split of the commission are known as what?

Answer 3

Cooperating brokers

Question 4

Describe the role of the listing broker during the closing process.

Answer 4

The role of the listing broker is to ensure that the closing occurs on time and that all documents necessary to the closing are accurately and timely produced

Question 5

When a property goes under contract, what additional checklists might be generated?

Answer 5

When a property goes under contract, that event then generates more checklists: inspections to be ordered, disclosures to be made, title report to be inspected, etc.

Question 6

Explain what a checklist is and does.

Answer 6

They are quick and simple tools aimed to buttress the skills of expert professionals

Question 7

In a real estate closing company, a checklist will usually provide places for what important information?

Answer 7

The checklist will generally provide a place to check off the item received and the initials of the person responsible

Question 8

Name five items covered in a Residential Real Estate Closing Checklist.

Answer 8

Closing Date 
Seller's exact names   
Buyer's exact names
Broker's names
Commission
(There are many more)

Question 9

Name three forms required for loan application

Answer 9

Permission to Request Credit Report 
Uniform Residential Loan Application
Loan Estimate
Verification of Employment (VOE)
Verification of Deposit (VOD)

Question 10

Define Loan Estimate.

Answer 10

An itemized list of all costs related to obtaining and closing on a mortgage loan.

Question 11

Name three items required on most loan applications.

Answer 11

Social Security card & driver’s license
Residence address for past 2 years
Employment for past 2 years
Gross monthly income (includes Social Security, alimony, child support, pension, etc)
Name, address, account number, minimum monthly payment & balance due for all installment loans, charge accounts, student loans, car loans and other mortgage loans (including any co-signatures on loans)

Question 12

Name the three major credit reporting companies.

Answer 12

Experian, Equifax, and Trans Union

Question 13

RESPA applies to what types of purchases?

Answer 13

Of residential property – that is, one-to-four family homes, cooperatives and condominiums
Involving first or second mortgages
Financed by a federally-related loan

Question 14

What does RESPA require lenders to give to borrowers?

Answer 14

The correct figures pertaining to their closing costs.

Question 15

RESPA does not apply to what kinds of loans?

Answer 15

Seller-financed loans or loan assumptions (unless the lender has changed the terms of the assumed loan or charges more than $50 for the assumption).

Question 16

RESPA specifically prohibits what action?

Answer 16

RESPA specifically prohibits any payment or receiving of fees or kickbacks when a service has not been rendered

Question 17

The listing broker represents the seller and has responsibility for exerting reasonable efforts to complete the sale of the property

Answer 17

This includes assisting the seller with completing all the seller’s obligations between the time the contract is signed and the closing occurs, as well as post-closing activities.

Question 18

The brokers who earn a split of the commission are called

Answer 18

Cooperating brokers

Question 19

Depending on where and with whom you practice

Answer 19

the business of real estate is a checklist-driven activity.

Question 20

When a property goes under contract, that event then generates

Answer 20

(or should generate) more checklists: inspections to be ordered, disclosures to be made, title report to be inspected, etc.

Question 21

A checklist is not a set of step-by-step instructions. Rather,

Answer 21

they are quick and simple tools aimed to buttress the skills of expert professionals.

Question 22

In a standard real estate transaction,

Answer 22

it may make sense to have three or more checklists, each to be reviewed at predetermined dates after the execution of a contract and prior to closing

Question 23

Real estate closing companies will use a checklist to make sure

Answer 23

all details of the closing have been covered and are in house ready for the buyers and sellers to sign. This checklist will generally provide a place to check off the item received and the initials of the person responsible.

Question 24

A number of forms must be filled out and signed during the loan application. These will include the following:

Answer 24

Permission to Request Credit Report
Uniform Residential Loan Application
Good Faith Estimate (GFE)
Truth in Lending Statement (TIL)
Verification of Employment (VOE)
Verification of Deposit (VOD)

Question 25

The Loan Estimate

Answer 25

is an itemized list of all costs related to obtaining and closing on a mortgage loan.

Question 26

TRID

Answer 26

regulations require the lender to provide the Loan Estimate to the borrower within 3 days after application.

Question 27

The following information is required on most loan applications. It speeds up the process if the applicant brings all of this information to the initial interview (1):

Answer 27

Social Security card & driver’s license
Residence address for past 2 years
Employment for past 2 years
Gross monthly income (includes Social Security, alimony, child support, pension, etc.)

Question 28

The following information is required on most loan applications. It speeds up the process if the applicant brings all of this information to the initial interview (2):

Answer 28

Name, address, account number, minimum monthly payment & balance due for all installment loans, charge accounts, student loans, car loans and other mortgage loans (including any co-signatures on loans)
Name, address, account number and balance on all checking or savings accounts, stocks or bonds
Past 30 days pay stubs
Past 2 years W-2 forms

Question 29

After completion of the loan application

Answer 29

the next step is to forward the information to the processor. The processor will then proceed to package the loan for submission to an underwriter.

Question 30

Lenders today generally request a

Answer 30

tri-merge credit report, including credit scores. This report contains credit information from the three major credit repositories - Experian, Equifax, and Trans Union.

Question 31

RESPA requires

Answer 31

that the parties to certain transactions receive the correct figures pertaining to their closing costs.

Question 32

RESPA applies to purchases:

Answer 32

Of residential property – that is, one-to-four family homes, cooperatives and condominiums
Involving first or second mortgages

Question 33

Financed by a federally-related loan

Answer 33

that is, loans that are insured by a federal agency, those that are insured or guaranteed by VA or FHA, HUD-administered loans, or those that will be sold to Fannie Mae, Freddie Mac or Ginnie Mae