Chapter 13 - Closing a Sales Transaction

Question 1

closing

Answer 1

the completion of the legal process which results in the transfer of title to property from one party to another.

Question 2

settlement

Answer 2

the proper execution and delivery to the closing attorney of all documents necessary to complete the real estate transaction.

Question 3

settlement agent

Answer 3

the entity or person who conducts the closing of a real estate transaction

Question 4

due diligence

Answer 4

a legal term used to describe the reasonable steps a person must take in order to satisfy a legal requirement.

Question 5

soil suitability test

Answer 5

a test to determine whether a property will support a septic system

Question 6

time is of the essence

Answer 6

communicates to parties of a contract that they must perform their contractural duties by a specific date and time in order to avoid a breach of contract

Question 7

walkthrough

Answer 7

an inspection that an agent and client perform in order to discover material facts within a property.

Question 8

relation back doctrine

Answer 8

the principle that something done today will be treated as if it were done earlier; often applied to documents held in escrow that are released at a later date

Question 9

settlement meeting

Answer 9

the event wherein the remaining required signatures and funds from the parties are obtained, allowing the closing attorney to execute the closing of a transaction.

Question 10

federally related mortgage loan

Answer 10

a mortgage loan that is made, insured, or guaranteed by an agency of the federal government

Question 11

kickback

Answer 11

an illegal form of undisclosed compensation for the recommendation or referral of business

Question 12

regulation x

Answer 12

the law through which the real estate settlement procedures act is implemented

Question 13

RESPA

Answer 13

legislation passed to eliminate kickbacks in lending and disclose the costs of closing a loan.

Question 14

Closing Disclosure

Answer 14

a form used to itemize and disclose the final services and fees charged to the borrower by the lender for a mortgage loan subject to TRID

Question 15

Loan Estimate

Answer 15

combines and replaces the Good Faith Estimate and the Initial Truth in Lending (TIL) statement; highlights the most important elements of the transaction

Question 16

TRID

Answer 16

an acronym for the TILA-RESPA Integrated Disclosure rule that dictates how, when, and what information lenders are to provide borrowers applying for mortgage loans subject to the rule.

Question 17

bottom-line

Answer 17

refers to the tallying of debits and credits in order to calculate how much money the buyer needs to bring to the closing and how much the seller can expect to net from the sale

Question 18

credit

Answer 18

a sum of money that is received

Question 19

debit

Answer 19

a sum of money that is owed

Question 20

proration

Answer 20

the act of dividing or allocating expenses between buyers and sellers based on the actual period of usage of the item or service

Question 21

settlement statement

Answer 21

an itemized list of fees, credits, and debits to the parties in a real estate transaction.