Unit 5: NC Property Taxes and Settlement Flashcards

0
Q

Debit

A

Amount charged to a party to pay a bill

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1
Q

Who pays pest inspection for buyer with VA loan?

A

Seller

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2
Q

Trust account

A

Place where broker holds money belonging to other parties

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3
Q

Excise tax

A

Amount of $1 per $500 of purchase price charged when a deed is recorded

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4
Q

Credit

A

Amount received by a party it pay a bill

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5
Q

Closing

A

Final settlement crested by the terms of the Offer to Purchase and Contract

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6
Q

Recording

A

Creates constructive notice of the contents of the document

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7
Q

Proration

A

Dividing expenses between the buyer and seller based on ownership periods

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8
Q

Lender/escrow accounts

A

Place where lender holds borrower’s funds to pay bills at a later time

Buyer always pays to start account

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9
Q

Settlement statement

A

Summary of financial part of a closing for omen party to the transaction

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10
Q

Double entry debits and credits

A

Always equal in amounts

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11
Q

Loan discount points

A

Charged by lender in exchange for lower interest rates . Increase lenders yield on loan

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12
Q

First deed of trust

A

Creates a financing lien and has highest priority

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13
Q

Loan origination fee

A

Administrative fee charged by lender to set up loan

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14
Q

Conventional loan

A

Neither insured or guarantee by government

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15
Q

Second deed of trust

A

Loan created with a lower lien priority such as seller financing

16
Q

Recording of deed of trust

A

Buyer pays

17
Q

Tenant security deposits

A

Debit seller, credit buyer

18
Q

Unpaid taxes from previous year

A

Seller pays

19
Q

Loan assumption entry

A

Debit seller, credit buyer

20
Q

Annual interest

A

NOT part of every proration

21
Q

Recording of warranty deed

A

Buyer pays

22
Q

Buyer’s earnest money

A

Credit to buyer

23
Q

Due diligence fee

A

Debit seller, credit buyer

24
Q

Tenant security deposit

A

Debit seller full amount, credit buyer full amount

25
Q

Excise tax

A

Total sales price / $500

NOT printed on the sakes contract, it’s printed on the deed.

Paid by seller (debit seller)

Always a whole dollar amount

26
Q

Pest inspection on VA loan

A

Debit seller

27
Q

NC law: assessed value must equal

A

Market value

28
Q

NC real property taxes

A

Attach to property as of January 1

No penalties if paid by January 5th

29
Q

NC machinery act

A

Governs all taxation including ad velorum taxes

States that at time of assessment, assessed value must equal market value

30
Q

Real property assessments

A

Every 8 years (Octennial reappraisal)

Horizontal adjustment: every 4 years after octennial adjustment, city or county may uniformly adjust property up or down across the board

31
Q

Tax rates

A

Can be adjusted annually to meet budget needs

In NC, tax rate/ 100

32
Q

Good funds settlement act

A

Requires the deed and deed of trust be recorded before funds are dispersed

33
Q

NC Rules

A

1) seller owns day of closing settlement
2) use 360 days in a year , 30 days in every month
3) never prorate : tax reserve balance, security deposits, mortgage payment due for month of settlement
4) items typically prorated; current years taxes, interest on assumed loan,

34
Q

Proration formula

A

Total bill/ days in billing period x days owed

35
Q

No single entry CREDITS for seller

A

Only debits

36
Q

Double entry items for closing worksheet

A

1) Selling price: debit buyer, credit seller
2) Due diligence fee : credit buyer, Debit seller
3) paid real estate taxes : debit buyer, credit seller