Closings 1

Question 1

1. Homeowners fees of $112 for the quarter have been paid in advance by the seller for an August 19 closing. Entry would be:
A. $55.32 debit seller credit buyer
B. $52.35 debit seller, credit buyer
C. $55.32 credit seller, debit buyer
D. $52.35 credit seller, debit buyer

Answer 1

D. $52.35 credit seller, debit buyer

Rationale: 43 days times 112÷92 = $52.35 credit seller debit buyer

Question 2

2. Who is responsible for confirming the settlement figures presented to the seller?
   A. The listing brokers employing broker.
   B. Both the listing broker and the buyer’s broker.
   C. The buyer’s broker.
   D. The listing broker.

Answer 2

D. The listing broker

Question 3

3. How is the brokers commission accounted for on the settlement sheet?
   A. Debit seller, credit buyer.
   B. Debit sellers single entry.
   C. Debit seller, credit broker.
   D. No entry sense it’s understood that the broker was procuring cause of the transaction.

Answer 3

C. Debit seller, credit broker.

Question 4

4. The purchaser believe this escrow deposit should be subtracted from the amount due is closing. He subsequently shows up with $1500 short of what is required to close. What will allow closing to proceed?
   A. Dollars profit more than compensates for the shortage, closing should proceed.
   B. Buyer must leave closing and seek certified funds the next day for the difference from the closest depository.
   C. Closing should proceed in escrow with monetary dispersal when funds are accounted for.
   D. Buyer broker must make up difference under buyer agency requirements.

Answer 4

C. Closing should proceed in escrow with monetary dispersal when funds are accounted for.

Question 5

5. You, as the buyer’s broker, are unable to attend the closing due to an unexpected death in the family. You should:
   A. Expect hardest to understand and for you address for delivery of commission due.
   B. Make sure listing broker is aware that he is now totally liable for closing figures.
   C. Ask another broker to attend in your place to ultimately sharing your liability.
   D. Insist on resetting the closing to a time when you can be there.

Answer 5

C. Ask another broker to attend in your place to alternately share in your liability.

Question 6

6. And out-of-state seller has $3500 net sale proceeds after all costs are determined. The sales price is $250,000. How much is the sellers liability.
A. $5000
B. $3500
C. $7000
D. $5300

Answer 6

B. $3500

Question 7

7. Brokers may receive the compensation by:
   A. Commission, hourly fee or combination of both.
   B. Insisting Barbie equally liable with the seller for fee.
   C. Court order dispensation.
   D. Commission only.

Answer 7

A. Commission, hourly fee or combination of both.

Question 8

8. Seller will continue to rent half of the duplex after closing on May 10th. Rent is $1475 per month, payable in advance. How is this accounted for a closing?
A. $1046.77 debit seller, credit buyer.
B. $696.71 debit seller, credit buyer.
C. $420.97 debit seller, credit buyer.
D. $483.33 debit buyer, credit seller.

Answer 8

A. $1046.77 debit seller, credit buyer.

Question 9

9. A property manager for $600 in his security deposit account. At closing, these funds must be dealt with as a:
A. $600 debit seller, credit buyer.
B. $600 debit buyer, credit tenant.
C. $600 debit seller, credit tenant.
D. $600 debit seller, credit broker.

Answer 9

A. $600 debit seller, credit buyer.

Question 10

10. Who pays for survey order prior to closing, but after contract acceptance?
A. Always seller's responsibility.
B. Always buyers responsibility.
C. Lender and broker splits costs.
D. I negotiable item- check contract.

Answer 10

D. A negotiable item-check contract.

Question 11

11. A metered water bill is:
    A. Usually escrowed for 150% of typical Bill.
    B. Paid by seller with private funds at closing.
    C. Paid by buyer with corresponding credit.
    D. Negotiated with water company due to new customer regulations.

Answer 11

A. Usually escrowed for 150% of typical Bill.

Question 12

12. A lender who is offering a 6.5% loan with two discount points is probably anticipating a yield of:
A. 6.75%
B. 7%
C. 6.875%
D. 6.5%

Answer 12

A. 6.75%

Rationale: 1 points equal to 1/8% and 1/8*2 equals .25

Question 13

13. Discount points:
    A. Are required by statute to be paid by seller.
    B. Are required by statute to be paid by buyer.
    C. Are you negotiable item between parties.
    D. Are not a tax deduction.

Answer 13

C. Are you negotiable item between parties.

Question 14

14. On an assumption the seller carries $10,000 at 12% interest paid monthly. Closing is June 11 and first payment due August 1. The entry is:
A. $65.75 debit seller, credit buyer
B. $65.75 debit buyer, credit seller.
C. $800 debit seller, credit buyer.
D. $800 debit buyer, credit seller.

Answer 14

B. $65.75 debit buyer, credit seller.

Question 15

15. On a September 10 closing, with current property taxes of $2150, which of the following entries would be appropriate?
A. Seller owes the broker $1484.38
B. Seller owes the buyer $1484.38
C. Buyer owes the seller $665.62
D. Buyer owes the broker $665.62

Answer 15

B. Seller owes the buyer $1484.38

Question 16

16. Security deposits are entered on the settlement sheet as:
A. Debit seller, single entry
B. Debit seller, credit buyer
C. Debit broker, credit seller
D. Credit broker, single entry

Answer 16

B. Debit seller, credit buyer

Question 17

17. The selling prices shown as a credit to the seller on the settlement sheet and: 
A. Closing statement
B. Deed of trust
C. Buy-sell contract
D. Listing contract

Answer 17

A. Closing statement

Question 18

18. At closing, the buyers "good faith" deposit is recorded as: 
A. Debit buyer, credit seller
B. Debit broker, credit buyer
C. Debit seller, single entry
D. Debit buyer, credit broker

Answer 18

B. Debit broker, credit buyer

Question 19

19. Perhaps your firm has a title company, typically chooses the title company for the title search, title insurance and coaching and administration?
A. Buyer
B. Buyer's broker
C. Title company
D. Listing broker

Answer 19

D. Listing broker

Question 20

20. That loan proceeds are shown on the settlement as:
A. Debit buyer, credit broker
B. Credit broker, single entry
C. Debit broker, single entry
D. Debit broker, credit seller

Answer 20

C. Debit broker, single entry