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exam 8

Terms in this set (30)

In a closing statement, an accrued item is a(n):
Item that is unpaid, but is due
Documentation the buyer is usually required to bring to the closing is
proof of hazard insurance
A general guideline for preparing a closing statement is that:
General Prorations are computed by using a 360-day year and 30-day month
An example of a kickback that is prohibited by RESPA is:
A fee paid by a surveyor to a broker for a lead on a property to be surveyed
Which of the following activities is allowable under RESPA guidelines?
Real estate agent is paid $20.00 to hand deliver documents for a closing for the title company
The principal balance on an assumed mortgage loan paid in arrears is entered on a closing statement as a:
Debit to the seller and credit to the buyer
The previous year's taxes on Steve Seller's home were paid in full on December 31 and amounted to $2,753.00. Steve sold his home to Bill buyer and closed the sale on May 4. What was the prorated tax amount using a regular calendar year and prorating through the day of closing?
$935.27 credit to the buyer
Once Sally and Don completed a sales contract with a seller and moved forward with the closing process, the many contingencies expressed by the parties had specific time limits which each party had to complete. At the closing, all details to be finalized are governed by:
The terms of the properly drafted and executed purchase contract
At closing, the real estate broker's commission is usually shown as a:
Debit to the seller
A sale is to be closed on March 23, 2012. The 2010 tax amounted to $2,893 and was paid in 2011. How much must the seller credit to the buyer for prorated taxes?
$3,560.00
In a real estate settlement, the recording charges the buyer usually pays for is a:
mortgage
Sylvester bought a commercial warehouse for $850,000 and financed 75% of the purchase price. The lender charged 2.5% discount points to provide a 3.99% interest rate. How much cash did Sylvester need to bring to the closing if he incurred no other expenses?
$228,437.50
Which of the following is TRUE of real estate closings in Illinois?
The seller usually pays the expenses for the day of closing
Smith and Weston entered into a contract to purchase Colt's home. At the closing the earnest deposited by Smith and Weston appears as a:
Credit to the buyer
Which of the following is NOT a requirement of RESPA?
The borrower may cancel the loan transaction within 5 days after settlement
Which of the following is TRUE regarding the Real Estate Settlement and Procedures Act (RESPA)?
RESPA helps homebuyers know their settlement charges with no surprises at closing
Gail and Rick have sold their home to Susan and Jerry. Susan and Jerry have procured all their necessary financing and Gail and Rick have been able to show a clear and marketable title to the home now at the closing table the deed has been prepared. Who must sign the deed?
The seller
Leo, a licensed real estate broker, gives his brother $10,000 to start a home inspection company. Leo owns 1% of the business but does not participate in the inspection company at all. When referring buyers to the inspection company, Leo:
Must disclose his interest in the company
The closing statement involves the debits and credits to the parties in the transaction. A debit is:
an expense
Within how many business days from the time a borrower makes loan application does a lender have to provide a truth in lending statement and good faith estimate of the costs of borrowing money?
three
The real estate settlement procedures act (RESPA) may apply to a loan assumption if the:
The terms of the assumed loan are modified by the lender
At a closing in October 2011, Mrs. Johnson was leaving her washer, dryer, range and refrigerator with the property. These items will be transferred to the buyer through:
A bill of sale
Frankie and Johnny purchase a condominium Nellie and the closing was scheduled. If the annual real estate taxes on the condominium were $3,250.00 what would be the per diem amount for the prorations of the taxes using the actual number of days method?
$8.90
The Real Estate Settlement and Procedures Act originally provided that the closing disclosure must be made available to the parties in a real estate transaction. The new TRID version of the law requires:
The disclosure of all closing costs be made available three business day prior to closing
In Illinois which party usually pays for the state and county transfer taxes?
Seller
A buyer purchases a property for $285,500. The buyer deposits the purchase price with a third party and the seller deposits a warranty deed for the property with the same third party. The third party is instructed to record the deed in the buyer's favor and pay the purchase price, less some agreed prorations, to the seller when the buyer has received the deed. This transaction is called:
Escrow
The process by which expenses are handled at the settlement of a real estate transaction so that both the buyer and the seller pay their respective portions of the debts is called:
Proration
Which of the following conditions is not required to close the sale on a 3-unit apartment building?
Managing broker must attend the closing to accept the commission check
The Albert brothers owned a two flat apartment and rented the second floor to the Andersons. On June 1, they collected the rent from the Andersons for $950.00. The closing of the property took place on June 15. What is the status of the rent payment?
The Albert brothers owe the buyers $475.00
Tina, the licensee who sold a property in cooperation with Dawn, a licensee with a cooperating broker attended the closing and realized that the commission check was made out to her and not to her sponsoring broker's office. In this case, the licensee should:
Advise the closing agent that the check should be made out to the listing office
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