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Test > Unit 21 Closing the Real Estate Transaction > Flashcards

Unit 21 Closing the Real Estate Transaction Flashcards

1
Q

Which of the following statements is TRUE of real estate closings in North Carolina?
A Closings are usually conducted by real estate brokers.
B The seller usually pays the expenses for the day of settlement.
C The buyer usually reimburses the seller for accrued but unpaid expenses.
D The seller usually pays the attorney for the preparation of the deed of trust.

A

B The seller usually pays the expenses for the day of settlement.

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2
Q

Which of the following does NOT normally occur at closing?
A Seller transfers ownership to the buyer via general warranty deed.
B Buyer delivers certified funds for the purchase of the property.
C Settlement agent assures that all paperwork required by the lender has been properly signed and dated.
D Buyer pays for the appraisal and the credit report required by the lender.

A

D Buyer pays for the appraisal and the credit report required by the lender.

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3
Q

The Borrower Closing Disclosure must be used to illustrate all settlement charges for
A every real estate sales transaction.
B only real estate transactions financed by VA and FHA loans.
C all residential real estate transactions financed by federally related mortgage loans.
D all commercial real estate transactions.

A

C all residential real estate transactions financed by federally related mortgage loans.

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4
Q

how certain items would normally appear on a settlement statement if the standard NCBA/NCAR 2-T Offer to Purchase and Contract is used.
The sales price of the property is a
A credit to the buyer.
B debit to the seller.
C credit to the buyer and debit to the seller.
D credit to the seller and debit to the buyer.

A

D credit to the seller and debit to the buyer.

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5
Q

how certain items would normally appear on a settlement statement if the standard NCBA/NCAR 2-T Offer to Purchase and Contract is used.
The earnest money held in escrow by the listing broker is a
A credit to the buyer.
B debit to the seller.
C credit to the buyer and debit to the seller.
D credit to the seller and debit to the buyer.

A

A credit to the buyer.

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6
Q

how certain items would normally appear on a settlement statement if the standard NCBA/NCAR 2-T Offer to Purchase and Contract is used.
The cost of conducting a survey on the property is a
A debit to the buyer.
B debit to the seller.
C credit to the buyer and debit to the seller.
D credit to the seller and debit to the buyer.

A

A debit to the buyer.

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7
Q

how certain items would normally appear on a settlement statement if the standard NCBA/NCAR 2-T Offer to Purchase and Contract is used.
The principal amount of the purchaser’s new mortgage loan is a
A debit to the buyer.
B credit to the buyer.
C credit to the buyer and debit to the seller.
D credit to the seller and debit to the buyer.

A

B credit to the buyer.

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8
Q

how certain items would normally appear on a settlement statement if the standard NCBA/NCAR 2-T Offer to Purchase and Contract is used.
Unpaid homeowners association fees, water service charges, and waste disposal service fees are
A credits to the buyer.
B debits to the seller.
C credits to the buyer and debits to the seller.
D credits to the seller and debits to the buyer.

A

C credits to the buyer and debits to the seller.

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9
Q

The Real Estate Settlement Procedures Act regulates all of the following EXCEPT
A kickbacks and referral fees to any settlement service provider, including real estate agents.
B reserve accounts for payments of property taxes and insurance premiums.
C referral fees to and from real estate licensees.
D loan servicing.

A

C referral fees to and from real estate licensees.

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10
Q

TRID rules require that
I a Loan Estimate of settlement costs be given to the borrower within three business days of loan application.
II a Borrower Closing Disclosure be received by the borrower three business days prior to the settlement meeting.
A I only
B II only
C Both I and II
D Neither I nor II

A

C Both I and II

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11
Q 
Which of the following settlement expenses is NOT typically paid by the seller?
A Excise tax
B Attorney’s fee
C Deed preparation fee
D Brokers’ commission
A

B Attorney’s fee

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12
Q 
Which of the following closing expenses is NOT generally prorated between the buyer and the seller at settlement?
A Current ad valorem real estate taxes
B Homeowner association dues
C Rent
D Interim interest on new loan
A

D Interim interest on new loan

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13
Q

TRID rules apply to all of the following loans EXCEPT
A reverse mortgages.
B federally-related loans intended to be sold by the lender to Fannie Mae, Ginnie Mae, or Freddie Mac.
C loans insured by the FHA or by the VA.
D loans intended to be sold by the lender to Fannie Mae, Ginnie Mae or Freddie Mac.

A

A reverse mortgages.

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14
Q

On a settlement form, the prorations for unpaid real estate taxes at a March 24 settlement would be shown as a
A credit to the seller and debit to the buyer.
B debit to the seller and credit to the buyer.
C credit to both the seller and the buyer.
D debit to both the seller and the buyer.

A

B debit to the seller and credit to the buyer.

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15
Q 
On a settlement statement form, the due diligence fee in the NCBA/NCAR 2-T Offer to Purchase and Contract will always be a
I credit to the buyer.
II debit to the seller.
A I only
B II only
C Both I and II
D Neither I nor II
A

C Both I and II

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16
Q 
The federal agency responsible for the implementation of TRID rules is
A Department of HUD.
B the CFPB.
C Regulation X.
D Dodds-Frank.
A

B the CFPB.

17
Q

Using the due diligence process as defined in the NCBA/NCAR 2-T OPC, buyers could back out of the agreement by 5:00 pm on the due diligence date for which of the following reason(s)?
I Ability to obtain loan financing
II Soil suitability test
III Ability to obtain homeowners insurance
IV Determination of easements or encroachments
A I only
B II and III
C III and IV
D I, II, III, and/or IV

A

D I, II, III, and/or IV

18
Q

The Good Funds Settlement Act requires that
A the brokerage commission is withheld until the seller signs a consent form.
B the settlement agent disburses funds after recordation of the deed and the deed of trust.
C buyers and sellers close in escrow.
D a North Carolina attorney be present at closing.

A

B the settlement agent disburses funds after recordation of the deed and the deed of trust.

19
Q

If annual real estate taxes of $1,800 have been paid in advance of settlement, what would the HUD-1 entry for the current taxes be if closing is set for September 15?
A Credit seller $525; debit buyer $1,275
B Credit seller $1,275; debit buyer $525
C Credit buyer $1,275; debit seller $1,275
D Credit seller $525; debit buyer $525

A

D Credit seller $525; debit buyer $525

20
Q

A seller collected rent of $450 on June 1, payable in advance, from the tenant of the property being sold. How will the rent appear on the settlement statement if settlement is scheduled for June 23?
A Credit seller $345; debit buyer $105
B Credit buyer $105; debit seller $105
C Credit seller $345; debit buyer $345
D Rent will not appear on the settlement statement in this situation.

A

B Credit buyer $105; debit seller $105

21
Q 
A building was purchased for $150,000, with 10% down and a loan for the balance. If the lender charged the buyer two discount points and a 1% loan origination fee, how much cash did the buyer need to pay the down payment and loan fees?
A $15,450
B $16,620
C $19,050
D $19,500
A

C $19,050

22
Q 
You are purchasing a four-unit apartment building and will close on November 14. Each apartment rents for $575 per month. On November 1, one apartment is vacant, and the other tenants have paid the November rent. Compute the rent proration through the day of settlement, and indicate proper entries on a settlement statement.
A $805 credit seller; debit buyer
B $805 debit seller; credit buyer
C $920 credit seller; debit buyer
D $920 debit seller; credit buyer
A

D $920 debit seller; credit buyer

23
Q 
The buyer is going to assume the seller’s 7% loan with a loan balance of $82,000 as of the day of settlement, which will be August 11. Which of the following would be the correct settlement statement entries for the interest proration?
A $175.38 debit seller; credit buyer
B $175.38 credit seller; debit buyer
C $302.94 credit seller; debit buyer
D $302.91 debit seller; credit buyer
A

A $175.38 debit seller; credit buyer

24
Q 
Settlement will take place on November 15. Annual real estate taxes are $1,260 and have been paid by the seller. Which would be the appropriate settlement statement entries for the taxes?
A $157.50 debit seller; credit buyer
B $157.50 credit seller; debit buyer
C $1,102.50 credit seller; debit buyer
D $1,102.50 debit seller; credit buyer
A

B $157.50 credit seller; debit buyer

25
Q 
A buyer has contracted to purchase a home for $395,000. The buyer paid $15,000 for earnest money deposit and the sale will close on September 20. The buyer has already received loan approval for a conventional loan in the amount of $310,000. The lender is charging the borrower a 1% origination fee and 1 discount point. The lender is requiring the borrower to deposit 2 months of real property taxes and 2 months of homeowners insurance premium into an escrow account at closing. The homeowner’s insurance premium for the first year is $480 and is to be paid at closing. Real property taxes for the year total $3600 and have already been paid by the seller. Additional closing expenses for the buyer total $1,200. What is the net amount that the buyer will owe at closing?
A $61,460
B $64,560
C $79,480
D $79,560
A

D $79,560

26
Q 
A seller will close on the sale of his property on June 15. The contract price is $445,000. He has $24,310 in closing costs, including a 5% commission to his brokerage firm. Real property taxes are estimated to be $4,800 yearly and must be prorated. His first mortgage payoff is $249,000. Excise taxes will be charged to the seller as well. What is the amount that the seller will receive at closing, rounded to the closest dollar?
A 159,900.00
B 168,200.00
C 168,600.00
D 176,430.00
A

C 168,600.00

Test (21 decks)

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