Preparation of Closing Statements UNIT EXAM PT.2

If the buyer owed taxes for 95 days, the seller owed for 270 days, and annual taxes were $4,000, what would the buyer's prorated tax expense be?

$1,041.20

Using a calendar year, what would the daily rate be if annual taxes are $4,662? Round to the nearest cent.

$12.77

Kelly bought Mason's home for $255,500. Mason had prepaid the annual property taxes of $2,650. If closing costs are calculated on a 365-day year, and the transaction closes on March 5, how much will Kelly owe Mason for property taxes? Carry numbers out four decimal places, but round to two decimal places for your final answer. The proration is calculated up to the day of closing, meaning that the buyer owns the day of closing. Be sure to include the last day of the year in your calculations.

$2,192.61

Tiffany, an investor, wants to net 12% profit after paying a brokerage commission of 7%. If her original purchase price was $349,000, what's the minimum offer she can accept? Round to nearest whole dollar.

$420,301

Your clients received a check for $395,000 when they sold their property, which they owned free and clear. Their closing expenses were $4,575, and they paid 5% in brokerage fees. What was the sales price of their property? Round to nearest whole dollar.

$420,605

The water and sewer for a property closing on January 10 is billed in arrears. Assuming the sellers own the property the day of closing, which formula(s) can be used to calculate their prorated debit using the calendar year method?

(Monthly expense ÷ 31 days) × 10 days

The market value of your client's property is $280,000. Taxes in the area are assessed at 60% of market value. Your client's semi-annual tax bill was $1,461. What's the tax rate per 100?

1.74

Using a calendar year, what would the daily rate be if annual taxes are $4,662? Round to the nearest cent.

12.77

A property appraises at $320,000. If the assessment rate is 100% and the tax rate is $1 per $100, what are the semi-annual property taxes?

1600

Assuming that the seller pays for the date of closing, if closing is July 7, how many days will the seller be responsible for paying using a statutory year?

187

Jill received a semi-annual tax bill of $2,250. Property in her area is assessed at 50% of market value. If the tax rate is $3.50 per $100, what's the estimated market value of Jill's property? Round to the nearest whole dollar.

257,143

When prorating annual HOA fees of $1,500 using the statutory calendar, what's the daily rate, rounded to the nearest cent?

4.17

The market value for Jessie's property is $410,000. It's assessed at 55%, and the tax rate is $2.75 per $100. What are Jessie's monthly property taxes?

516.77

Anita's property appraised at $370,000. It is assessed at 40% of appraised value, and the tax rate is 80 mills. What are Anita's semi-annual property taxes?

5920

The sales price is _______.

A credit to the seller and a debit to the buyer

Lenders require a borrower to establish and maintain a reserve fund to ______.

Pay any property taxes in case the borrower misses a payment

The ______ is responsible for paying for recording documents to clear all defects from the title.

THE SELLER

______ usually pays the broker commission.

THE SELLEr

Which of the following bits of data is crucial in a proration?

The number of days in the proration period

Danette hasn't paid the first quarter water bill on her property. It was due on April 1. She's closing with the buyer, Jason, on April 1. What type of expense is this and how will it appear on the settlement statement?

This is an accrued expense, and will appear as a seller debit and a buyer credit.

Why do lenders require a borrower to establish and maintain a reserve fund?

To pay any property taxes in case the borrower misses a payment

Which of the following is a typical accrued adjustment?

Unpaid real estate taxes

Which of the following is NOT a question you need to ask yourself when prorating items?

Who is the most capable of paying the prorated item?

The ______ is responsible for paying any tax reserves required to pay property taxes.

buyer

The ______ is responsible for paying appraisal and credit report fees.

buyer

Closing statements are usually prepared by the _________.

closing agents

A ______ is an amount that shows up on the closing statement in the party's favor.

credit

Earnest money on deposit is a ______.

credit to the buyer

A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of settlement, has already paid annual property taxes of $1,949. Using calendar year proration, the seller will be ______ on the closing statement (round to the nearest dollar).

credited 1207

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

A real estate transaction has a closing date of April 20. The seller, who's responsible for closing costs up to and including the day of settlement, has already paid property taxes of $1,447 for the calendar year. If proration is based on a statutory calendar, the buyer will be_______ on the closing statement.

debited 1005

Which of the following would be considered a seller debit in the closing statement?

the sellers current mortgage payoff

Who's responsible for paying appraisal and credit report fees?

the buyer

Which of the following would be considered a seller credit on the closing statement?

the purchase price