Flashcards in Real Estate Course Chapter 14 Deck (23):

1

##
The 365-day method calculates the proration using the actual number of days in the proration period and is more accurate than the statutory month method. True or False?

### True

2

## Prepaid rent is entered on the closing statement as a debit to the seller and as a credit to the buyer. True or False

### True

3

## True or False - A transfer of title occurs at title closing, when the seller delivers title to the buyer in exchange for the purchase price.

### True

4

## To prorate means ...

### to divide various charges and credits between buyer and seller

5

## The charges associated with the preparation of the deed are usually paid by the ...

### Seller (grantor)

6

## The charges associated with the preparation of the mortgage and note are usually paid by the ...

### Buyer (mortgagor)

7

## Items credited to the buyer include the earnest money deposit.

### True

8

## How are Doc Stamps figured on the deed?

### It is based on the full sale price. 70 cents on every $100. Remember to round up to the next increment (i.e. $30,323 * 100 = 303.23 or 304 x .70 = $212.80)

9

## What is the state tax rate for Doc Stamps on notes?

### The tax rate on notes is $.35 per $100, or fraction thereof, on the face value of any NEW OR ASSUMED promissory note. Remember to round up (i.e 35,324 * 100 = 353.24 - or 354 x .35 = $106.20).

10

## When calculating rents owed in a closing, does the day of closing belong to the buyer?

### YES. Also do not forget to add the 31st day if a month has one or if the month only has 28 days

11

## To change a decimal to a percentage, move the decimal two places to the ______ and add a percentage sign.

### Right

12

## To change a percentage to a decimal, move the decimal two places to the ______ and get rid of the percentage sign.

### Left

13

## How do you convert a fraction into a decimal?

### Divide the denominator into the numerator. Example: 3/4 = 3 divided into 4 = 75%

14

## Profit is ...

### how much you make over and above your cost

15

## It is customary when transferring title to have all prorated items determined as of the ...

### midnight before the date of closing. In some areas in can be the day of close

16

## To prorate costs two methods are used. They are

### The 30 day method and the 365 method.

17

## The 30 day method is also called

### Statutory month method.

18

## How do you calculate with respect to the 30 day method?

###
1) determine the yearly cost of the item

2) divide by 12 to find the cost per month

3) divide by 30 to find the cost per day.

IMPORTANT: every month is assumed to have 30 days. A close of 7/23 would have 202 days (30 x 6 + 22). Remember you don't count day of close.

5) multiply the total number of days X the cost per day.

19

## How do you calculate with respect to the 365 day method?

###
1) divide 365 into the yearly cost of the item to get the daily rate

2) multiply the number of days involved with the daily rate.

20

## What is the state tax rate for the State Intangible tax on new mortgages?

### .002 ( two-tenths of one cent) PER DOLLAR of debt.

21

##
How is the buyer's binder deposit entered on the closing statement?

### CREDIT TO BUYER ONLY

22

## Property taxes are paid in _______ using a _____ day year

### arrears, 365

23