Quiz 14 Computations and Closing of Transactions

Question 1

A property sold for $198,000 with a listing commission of 8%, the selling office is to receive 40% of the total commission. How much will the listing salesperson receive if she is paid 60% of the amount retained by the listing broker?
A) $2,376.69
B) $3,168.00
C) $4,752.23
D) $5,702.40

Answer 1

D) $5,702.40

The listing salesperson will receive $5,702.40 calculated as follows: $198,000 x .08 = $15,840 (total commission) x .60 = $9,504 (listing broker portion) x .60 = $5,702.40 (listing salesperson portion)

Question 1

A house sold for $165,000 and the total commission received by the broker was $13,200. What was the rate of commission?
A) 6%
B) 7%
C) 8%
D) 10.5%

Answer 1

C) 8%

Divide the amount of commission by the sale price to obtain the rate of commission earned. $13,200 ÷ $165,000 = .08 = 8%

Question 2

Rich and Merle purchase a property for 275,000. They obtain a new 75% loan from the ABC Lending Company. How much was their loan, and how would it appear on their settlement statement?
A) $206,250; credit the buyer.
B) $206,250; debit the buyer.
C) $68,750; credit the buyer.
D) $68,750; debit the buyer.

Answer 2

A) $206,250; credit the buyer.

The loan would be $206,250 ($275,000 x .75), and it would be a credit to the buyer.

Question 3

A seller netted $55,000 at closing. If the seller paid costs of $1000 and an 8.5% commission, what was the sale price to the nearest dollar?
A) $57,850
B) $58,850
C) $60,760
D) $61,202

Answer 3

D) $61,202

$55,000 + $1,000 (costs) = $56,000 $56,000 ÷ .915 (100% - 8.5%) = 61,202

Question 4

In Florida, the deed of the property is taxed based upon the
A) listed price.
B) sale price.
C) adjusted gross price.
D) sale price, minus the escrow amount.

Answer 4

B) sale price.

The deed of the property is taxed based upon the sale price.

Question 5

A borrower received an 80% conventional loan and paid two discount points. If the points totaled $1,500, what was the sale price?
A) $50,000
B) $93,750
C) $100,000
D) $102,500

Answer 5

B) $93,750

$1,500 ÷ .02 (points percentage) = $75,000 (loan amount – 80% of sales price) $75,000 ÷ .80 = $93,750 (sale price of the property)

Question 6

Taxes are $1,485 for a July 31 closing. Compute the tax proration and show how the proration will appear on the settlement statement. The day of closing belongs to the buyer, and taxes are paid in arrears. Use the 365-day method for prorating.
A) Debit seller $526.55; credit buyer $526.55.
B) Credit seller $526.55; debit buyer $526.55.
C) Debit seller $858.77, Credit buyer $858.77
D) Credit seller $858.77; debit buyer $858.77.

Answer 6

C) Debit seller $858.77, Credit buyer $858.77

$1,485 ÷ 365 = $4.07 per day $4.07 x 211 days (January 1 to July 30) = $858.77

Question 7

Which of the following statements best describe the purpose of a Closing Disclosure?

A) An official settlement statement used by settlement agents and title companies to itemize all charges for a borrower and seller

B) An official HUD statement used by the seller to itemize all charges for a borrower and seller

C) An official HUD statement used by the buyer to itemize all charges for a borrower and seller

D) An official settlement statement used by the listing agent to itemize all charges for a borrower and seller

Answer 7

A) An official settlement statement used by settlement agents and title companies to itemize all charges for a borrower and seller

The Closing Disclosure is the official settlement statement used by settlement agents and title companies to itemize all charges for a borrower and seller.

Question 8

A 15-acre plot of land sold for $3000 an acre. What is the cost of the deed stamp tax on this property?
A) $150
B) $235
C) $315
D) $1500

Answer 8

C) $315

The deed stamp cost $315, calculated as follows: $3,000 x 15 = $45,000 (sale price of property). The taxation amount is .70 per $100. $45,000 ÷100 = $450 x .70 = $315.

Question 9

A seller listed a property for $96,000. The property sold for $94,000. How would the purchase price appear on a full settlement statement?
A) Debit the seller $94,000 and credit the buyer $96,000.
B) Credit the seller $94,000 and debit the buyer $94,000.
C) Debit the seller $96,000 and credit the buyer $96,000.
D) Credit the seller $96,000 and debit the buyer $ 94,000.

Answer 9

B) Credit the seller $94,000 and debit the buyer $94,000.

The sale price of $94,000 would appear on the settlement statement as a credit to the seller and a debit to the buyer.