Chapter 14 Real Estate

an investor is selling a single family home which is currently occupied by a tenant. the closing is scheduled to take place on may 13th, and the parties have agreed that all prorations will be calculated as midnight the day of closing. the tenant paid $1,800 rent to the seller on may 1st. how would this proration appear on the closing statement?

$1,045.16 debit seller, credit buyer

a property in palm beach county recently sold for $220,000. the purchaser arranged an 80% loan to finance the property. calculate the documentary stamp tax on the deed.

$1,540

a buyer assumes a mortgage. Interest for the 30 day month of closing is $300. If there are 12 seller days in the month of closing, what will show on the closing statement for the prorated interest on the assumed mortgage?

$120 debit seller; $120 credit buyer

a borrower received two new loans; a first mortgage of $55,000 and a second mortgage for $15,000. how much is the state intangible tax?

$140

a new loan in the amount $73,550 is being originated. what is the amount of the state intangible tax on the mortgage?

$147.10

if annual property taxes are $1000, and the closing is on March 5th with the day of closing allocated to the buyer, what is the amount of the tax proration using the 365 day method?

$172.60 debit seller; $172.60 credit buyer

the listing price for a property is $320,000 and the property sells for a $305,000. what is the amount of the brokerage fee at a 6% Commission rate?

$18,300

a vacant parcel of land is located NW 1/4 of the SE 1/4 of the SE 1/4 of Sections #13, T4N, R11E. The land is selling for $35 per square foot. Calculate the documentary stamp tax on the deed.

$26,680.50

a buyer purchases a property for $85,000, gives a $10,000 down payment, and assumes a $75,000 mortgage. how much is the state documentary stamp tax on the promissory note?

$262.50

a mortgage in the amount of $83,255 is being assumed. what amount must be paid for the documentary stamp tax on the note?

$291.55

a buyer purchases a property for $85,000, gives a $10,000 down payment, and assumes a $75,000 mortgage. how much is the state documentary tax on the promissory note?

$297.50

rent for the month of July is $550. if the day of the closing is July 9 and is allocated to the buyer, what is the amount of the proration using the 365 day method?

$408.06 debit seller; 408.06 credit buyer

a martin county property is being sold for $98,350, and the buyer is taking title subject to an existing mortgage in the amount of $61,220. what is the total of taxes due in this transaction?

$688.80

if a broward county property sold for $102,750, what amount must be paid for the documentary stamp tax on the deed?

$719.60

a single family home sold in palm beach county for $120,000. the buyer took a $100,000 new loan. how much is the state documentary stamp tax on the deed?

$840

if the day of closing belongs to the buyer and the closing is on January 12, how many days in January belong to each party?

11 seller days; 20 buyer days

the sale of a property recently closed where the doc stamp tax on the deed was $4,375, and the intangible tax on the new mortgage was $937.50. what was the loan to value ratio?

75%

a rental property sold for $86,590. the buyer took a new loan for $69,250. how many tax units will be used to calculate the state documentary stamp tax on the deed?

866

all of the following statements are true regarding prorations and prepayments, except:

a prepayment is a double entry on the closing statement between the buyer and the seller

what does an entry in the sellers debit column of the closing statement indicate?

an amount that reduces what the seller will receive at closing

how is the total purchase price entered on the closing statement?

as a double entry; debit to the buyer and credit to the seller

how are expenses shown on the closing statement?

as a single entry debit to either the buyer or the seller

which of the following correctly lists the taxes that the buyer must typically pay when purchasing a home with a new mortgage?

both the intangible tax and the note tax.

the state documentary stamp tax on the promissory note and intangible tax on a new mortgage is normally paid by the _______.

buyer

a buyer obtains a new loan (first mortgage) from a lender. how will the loan amount be shown on the closing statement?

credit to the buyer

how is an earnest money deposit held in escrow reflected on the closing statement?

credit to the buyer

how is the amount of a new mortgage obtained by the buyer entered on the closing statement?

credit to the buyer

the binder deposit held in escrow by a broker would be entered on the closing statement as a ______ to the _______.

credit, buyer

the amount the buyer is required to bring to closing is calculated by subtracting the buyers total _____ from the buyers total ________

credits, debits

real estate taxes are$1,034. if a closing is to take place on April 16th, with the day of closing belonging to the seller and the 365 day method is used, what is the amount of the proration and how is it handled?

debit the seller and credit the buyer $300.28

a buyer has agreed to assume an existing mortgage loan that has a balance of $86,346. interest for the month of closing is $697. closing is scheduled for July 14th, with the day of closing belonging to the seller. how is the interest proration entered on the closing statement?

debit the seller and credit the buyer $314.77

a property closes on august 12th. the annual property taxes are $9,750. the day of closing belongs to the buyer. how will the proration appear on the closing statement?

debit the seller and credit the buyer $5,956.85

a residence is rented for $900 per month, with the rent due on the first of the month. if the property is sold on March 6th, with the day of closing belonging to the buyer, what is the amount of the proration and how is it shown on the closing statement?

debit the seller and credit the buyer $754.84

in a residential transaction, how is the brokerage fee reflected on the closing statement?

debit to the seller

prorated rent is entered on the closing statement as a ________ to the seller and a ________ to the buyer

debit, credit

expenses on a closing statement are always entered as _______.

debits

how are expenses that are paid to a third party entered on a closing statement?

debits

the amount due the seller at closing is calculated by subtracting the sellers total ________ from the sellers total ______.

debits, credits

prorations are always entered on a closing statement as ______ entries.

double

all of the following statements about the brokers statement section of the closing statement are correct, except:

double entries are listed to reflect prorations between the buyer and seller

how is the amount of a mortgage loan assumed at closing by the buyer entered on the closing statement?

double entry

if the seller agrees to finance a portion of the purchase price, how will this second mortgage amount reflect on the closing statement?

double entry; credit to the buyer debit to the seller

the sellers _______ ______ and the buyers _______ ______ are not usually equal due to the differences in their expenses.

grand totals, grand totals

which tax will not be required in a transaction where the purchaser assumes an existing mortgage?

intangible tax

which entry would normally appear as a debit on the buyer statement?

intangible tax on a new mortgage

complete the statement. when determining prorations on a closing statement, the day of closing _________.

is determined by agreement

which of the following statements is correct regarding a double entry item?

it does not appear in the brokers statement

which of the following statements best describes a single entry item?

it must be accounted for in the brokers statement

the day of closing is always charged to the buyer for _______ ______

prepaid interest

what document stipulates which party pays which expense in a closing?

purchase and sale contract

which entry would appear as a credit on the sellers closing statement?

purchase price

which statement about the brokers portion of the closing statement is true?

receipts and disbursements must equal

entries on the brokers statement are made as either ______ or ________

receipts, disbursements

_______ is paid in advance; ______ and ______ are paid in arrears.

rent, taxes, interest

the _______ normally pays for the documentary stamp tax on the deed.

seller

An entry on the closing statement that appears only one party's statement that appears on one party's statement, either the buyer or the seller, as a debit or credit is what kind of entry?

single entry

a buyer pays an earnest money deposit, which the broker holds in escrow until the day of closing. How is this deposit entered on the closing statement?

single entry; credit to the buyer

which tax is only applicable to new loans?

state intangible tax on the mortgage

no taxes are payable on either note or mortgage when title is taken ________ ____ the mortgage

subject to

how it the total amount the buyer must bring to closing calculated?

subtract the buyers total credits from the buyers total debits

who is paid the balance due from the buyer that is shown on the closing statement?

the closing agent

who pays the balance due to the seller?

the closing agent

which statement best summarizes the purpose of the closing statement?

the closing statement summarizes the charges and credits against money received in order to conclude the transaction

the brokers statement accounts for all money received and paid by the closing agent, resulting in grand total amounts for receipts and disbursements. which statement is correct?

the grand totals for receipts and disbursements must be equal

in the absence of any agreement between the parties, who pays for the state documentary stamp tax on the deed?

the seller

which of the following statements regarding abstract continuation and title insurance in a real estate closing is correct?

the seller can either provide either an abstract of title or title insurance as evidence of merchantable or marketable title

which information is provided by subtracting the sellers total debits from the sellers total credits?

the total amount the seller will receive at closing

all of the following items would be prorated on a closing statement, except:

title insurance

what is the purpose of the closing statement?

to summarize the final aspects of a real estate transaction

all of the following details should be handled prior to the day of closing except:

transfer the deed to the buy