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If the negotiated sales price appears on the seller's closing statement as a credit, how is it reflected on the buyer's closing statement?
As a buyer debit
Daniel is preparing the Colorado Worksheet for Closing Statement. The seller will pay for the buyer's title insurance policy. How will this be recorded in the seller's columns of the worksheet?
As a debit
"What's the difference between a fee and a proration?" your client asks. What should you tell him?
"A fee is a lump sum you pay for a service, such as for getting a loan, and a proration is a payment based on how long you use a particular service."
How much is Colorado's doc (documentary) fee?
$.01 per $100 of consideration if the consideration is over $500
Adam and Vi are purchasing a condominium for $369,500. One of the closing costs that their broker documents on their estimated closing worksheet is a documentary fee. What documentary fee will they pay for their real estate transaction?
$36.95
When prorating annual property taxes of $2,400 using the statutory calendar, what's the daily rate, rounded to the nearest cent?
$6.67
When calculating interest due on a new Colorado conventional loan, divide the annual interest by ____.
365 days
What's a water escrow?
A debit to the seller to collect a reserve for any unpaid bills
Some closing costs that would appear on the Colorado closing worksheet for a transaction financed by a conventional loan may not appear on the worksheet for a seller-financed transaction. Why?
Because the seller is the lender, there's no need for the lender to charge the seller for certain items
Your client is buying a multi-family property in Colorado Springs. The certificate of taxes due will be entered in the Colorado closing worksheet as a debit to the buyer and a credit to the ___________.
Broker
How are taxes for the current year accounted for on the buyer's closing statement?
Buyer credit
How is the property sales price entered on a buyer's closing statement when the seller is financing the buyer's purchase?
Buyer debit
How is it determined whether the buyer or the seller pays any closing fees?
Buyers and sellers negotiate the payment of closing fees and document it in the contract.
In which section of the Colorado Contract to Buy and Sell Real Estate (Residential) will you indicate who pays any applicable sales tax?
Closing Costs, Closing Fee, Association Fees and Taxes
When the buyer and seller both have costs to pay, which form shows who pays what?
Closing disclosure
Which of the following types of financing can be used to finance non-owner-occupied investment properties?
Conventional
Sometimes the seller will offer concessions to the buyer to help with closing costs. How would this be entered on the closing worksheet for the buyer?
Credit to buyer in line 51, Seller Concessions
In a seller-financed transaction, how is the purchase price recorded on the Colorado Real Estate Commission-approved Closing Worksheet?
Credit to seller and debit to buyer
How is the broker's commission typically documented on the Colorado closing worksheet?
Credit to the broker, debit to the seller
A real estate transaction has a closing date of August 5. The seller, who's responsible for closing costs up to and including the day of settlement, has not yet paid annual property taxes of $1,290. If proration is based on a statutory calendar, the buyer will be_______ on the closing statement.
Credited $771
Your sellers have indicated that the property's primary water source is a well. Where is this documented in the Colorado residential sales contract?
Disclosure, Inspection, and Due Diligence
Total debits on the buyer's closing statement should _____ total credits.
Equal
What information does Schedule B-2 of an ALTA title commitment provide?
Exceptions and flaws that the title insurance policy will not cover
The _______ states that all funds for closing a real estate transaction must be immediately available for deposit to and disbursement from the title company's trust account.
Good funds rule
Which of the following items in the Colorado closing worksheet pertains to fees due to an owners association for the change of the ownership records and cost of obtaining a status letter?
HOA transfer/status letter fee
In a broker-prepared closing, what role does the title company play?
Issues the title insurance
What's true about the Appraisal Provisions section of the Colorado Contract to Buy and Sell Real Estate (Residential)?
It documents who will pay for the appraisal.
What's true about the Appraisal Provisions section of the Colorado sales contract?
It documents who will pay for the appraisal.
When a buyer is financing a real estate purchase with an FHA-insured loan, a mortgage insurance premium (MIP) is required. Is this reflected on the seller's closing statement, and if so, then how?
It doesn't appear
What is the interest rate on a VA loan?
It varies by lender
According to the Colorado residential sales contract, who pays any closing service fees?
It's negotiated between the parties.
Deanna, the buyer's broker, paid a $10 fee to the closing company for preparation of a deed and promissory note. This payment is ______.
Legal when the broker delegates authority to the closing agent for preparation
The closing costs that are recorded as a single entry on the line of a closing worksheet are generally associated with what type of loan?
New FHA loan
In which section of the Contract to Buy and Sell Real Estate, Residential, will you indicate whether a survey will be requested and, if, so who will pay for it?
New ILC, New Survey
What's required for the buyer of a condominium to qualify for a loan?
No more than 15% of the units have delinquent dues.
Does the buyer see the seller's Closing Statement?
No, not as a general rule.
In a Colorado real estate transaction, which of the following is traditionally paid for by the seller, and therefore debited to the seller on the Colorado closing worksheet?
Owner's title insurance premium
In which section of the Colorado sales contract is the county where the property is located documented?
Parties and Property
Your client is purchasing a triplex in Denver with a new conventional loan. Which of the following will be a buyer debit and seller credit?
Prepaid water and sewer
Stu is a real estate broker. Which act governs Stu's payment of referral fees to a settlement service provider?
RESPA
Where can a party reviewing a title commitment find requirements that must be met before a title insurance policy will be issued?
Schedule B-1
When the seller supplements a first conventional loan with additional financing, this is called ______.
Seller carryback
Why are lenders required to provide the Loan Estimate and Closing Disclosure forms to loan applicants and borrowers?
So borrowers can compare loans and make decisions regarding the affordability of loans offered
Why would an appraisal fee appear on the closing worksheet?
The appraisal fee wasn't paid outside of closing.
Broker Zane wants to prepare a closing statement estimate for his seller client. Where can he find the information he needs to complete the statement?
The balanced closing worksheet
Which of the following actions occurs prior to closing?
The buyer obtains a binder for insurance coverage on the new home.
How is the buyer in an assumed loan transaction protected by the Colorado Contract to Buy and Sell Real Estate (Residential) against changes in monthly payments and interest rates?
The buyer sets limits in Section 4.6
When your seller client accepts an offer, it's your office's practice to also complete the Closing Instructions form with agreements between buyer and seller. When you do so, which of these parties is NOT required to sign this form?
The buyer's lender
Who typically pays for owners' extended title coverage in a seller-financed transaction?
The buyer/new owner
Mortgage interest due at closing on a new FHA loan is charged from ________ until the date the first mortgage payment is due.
The date of the new loan
Mortgage interest on a new conventional loan is charged from ________ until the date the first mortgage payment is due.
The date of the seller's last payment
What's true about a buyer's down payment relative to a Colorado closing statement?
The down payment is reflected in the loan amount.
What happens if the broker representing either the buyer or the seller is unable to attend the closing?
The employing broker can designate another broker to attend.
To whom is the appraisal fee credited on the Colorado closing worksheet?
The fee is paid outside closing, so it doesn't appear on the works
Why isn't there a debit shown for the loan amount on a Colorado closing worksheet for a new FHA loan?
The loan is a lender debit, which isn't reflected on the worksheet.
Which of the following bits of data is crucial in a proration?
The number of days in the proration period
Which of the following is the best definition of an existing lien satisfaction fee?
The seller pays this fee to the mortgage lender. It clears the balance of their current mortgage.
What differentiates mortgage interest on a new loan as shown on a closing worksheet from mortgage interest on an assumed loan?
There's no proration of the interest on a new loan because the buyer's responsible for it all.
Jennings has received a Closing Disclosure from his lender. What's the purpose of this form?
To detail all costs Jennings will owe at closing
When are mortgage brokers and/or lenders required to provide buyers with the Loan Estimate form?
When buyers submit a loan application, or within three business days after submitting a loan application
What's a seller assist?
When the seller agrees to assist the buyer by paying part of the closing costs
What will you find in the Financing Conditions and Obligations section of the Colorado Contract to Buy and Sell Real Estate (Residential)?
An agreement that the buyer will apply for a loan by the loan application deadline
Unless the broker is performing the closing, the closing statement the broker prepared is _____.
An estimate
Your client is buying a condominium financed with a new conventional mortgage. The lender requires the buyer to purchase hazard insurance. How will the premium for the hazard insurance be entered into the Colorado closing worksheet?
Debit buyer
Your client is purchasing a condominium in Denver. The seller paid the HOA-CIC document procurement fee. How will this fee be entered in the Colorado closing worksheet?
Debit seller, credit broker
If the seller in an assumed loan transaction in Colorado currently has a payment due, how is that shown on the Closing Worksheet?
Debit the seller, credit the broker
If an earnest money deposit is used in a seller-financed purchase, how is that deposit recorded on the Colorado closing worksheet?
Debit to broker and credit to buyer
For a new VA loan, how are reserves for taxes and insurance recorded on the Colorado closing worksheet?
Debit to buyer and credit to lender, which isn't shown
Reserves for tax and insurance payments are deposited with the lender for a conventional new loan closing. How are these recorded on the Colorado closing worksheet?
Debit to buyer and credit to lender, which isn't shown
How would you record the agreed-upon purchase price for real estate if the seller was financing the purchase?
Debit to buyer and credit to seller
If a seller-financed transaction includes paying off the seller's existing mortgage, how is this recorded on the Colorado closing worksheet?
Debit to seller, credit to broker
On Ricardo's closing statement, the subtotal of debits is more than the subtotal of credits. What does this indicate
The seller's proceeds aren't enough to cover closing costs and loan payoff.
Mortgage interest on an assumed loan is charged from the date of the last payment until ________.
The settlement date
What does the credit balance in the broker's column of the Colorado closing worksheet represent?
The sum of all expenses that will be paid out on behalf of the buyer and the seller