Unit 4: Settlement/Closing Procedures

Question 1

What is the closing statement?

Answer 1

A detailed accounting of each party’s debits and credits (amounts paid and received).

Question 2

How do closings differ between states?

Answer 2

Closings in some states (California) are conducted using an escrow agent. Other states (Minnesota) have a title company closer present.

Question 3

What is a debit to buyer?

Answer 3

Anything that increases the amount of money the buyer must bring to the closing.

Question 4

What is credit to buyer?

Answer 4

Anything that decreases the amount of money the buyer must bring to the closing.

Question 5

What is debit to seller?

Answer 5

Anything that decreases the amount of money the seller takes from the closing.

Question 6

What is credit to seller?

Answer 6

Anything that increases the amount of money the seller takes from the closing.

Question 7

What is an example of a debit to buyer?

Answer 7

Sales price

Question 8

What is an example of a credit to buyer?

Answer 8

Earnest money

Question 9

What is an example of a debit to seller?

Answer 9

Brokerage fee

Question 10

What is an example of a credit to seller?

Answer 10

Sales price