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COLORADO REAL ESTATE CLOSINGS REVIEW NEWEST ACTUAL EXAM WITH COMPLETE QUESTIONS AND CORRECT VERIFIED ANSWERS (DETAILED ANSWERS) ALREADY GRADED A+ 100%$17.99
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COLORADO REAL ESTATE CLOSINGS REVIEW NEWEST ACTUAL EXAM
WITH COMPLETE QUESTIONS AND CORRECT VERIFIED
ANSWERS (DETAILED ANSWERS) ALREADY GRADED A+ 100%
A $300 charge for an appraisal is shown on the new loan statement. The contract states
that the buyer and seller have agreed to share this cost. The settlement worksheet entry
is - <<ANSWER>>$150 debit seller, $150 debit buyer.
Because the appraisal bill is being split between the seller and the buyer, each would
obviously owe half. Because it's on a new loan, these are single-entry debits to each
party (with no matching credit).
At closing, taxes for special assessments will be - <<ANSWER>>charged to the seller if
they are paid off at closing.
Special assessment taxes have a special rule: if it is paid at closing, debit seller, unless
the buyer agrees to pay. If buyer assumes the payment, this means the buyer has taken
over the payment agreement. The charge/assessment amount will not show up at
closing, so it is not mentioned.
If the real estate taxes for last year were $4,567, what is the prorated tax entry for this
year's taxes for a September 11 closing? - <<ANSWER>>$3,165.62 debit seller, credit
buyer
Current year's tax proration: last year's general taxes = $4,567.
The Contract to Buy and Sell states that which of the following will pay for the
appraisal? - <<ANSWER>>Negotiable
The Contract to Buy and Sell has a check box for who is to pay for the appraisal;
therefore, it is negotiable.
A water bill was paid in advance for the period March 1 to June 1 in the amount of $97.
For a closing on May 8, how will the settlement worksheet reflect this bill? -
<<ANSWER>>$25.30 debit buyer, credit seller
, Three months' water bill proration; bill paid in advance for March 1 to June 1 = $97 (92
days).
An investor is buying a duplex with rents paid on the first of the month. The rent
collected on the first was $2,000.00. The closing is on June 25. How will the rents be
entered on the settlement worksheet? - <<ANSWER>>$400 debit seller, $400 credit
buyer
The rent to be prorated is $2,000. The owner deserves the rent for the portion of the
month he or she owns the property, in this case the big side. Because the buyer takes
over after closing, he or she will want rent for the portion of the month they own the
property, in this case the small side. Remember: Rent is collected (not paid) in advance,
so prorate and always credit buyer's period; always debit seller.
If the taxes for the preceding year are unpaid at the time of the closing, the amount will
always be - <<ANSWER>>a debit on the seller's Closing Statement.
The taxes from the previous year have created a lien that the seller must clear;
therefore, the seller will have to pay them in full at the closing.
A flat-rate water bill that is paid in advance in the amount of $37.50 for the month has
not been paid. For a closing on June 16, which is a correct entry for the settlement
statements? - <<ANSWER>>Debit seller and buyer $18.75
The water is a lien at closing, but the seller only owes for the seller portion of the month,
and the buyer will be required to pay the buyer portion. The combined amount is the
total amount due, which will be a credit to the broker, who will write a check to clear the
lien.
Who is responsible for the overall closing? - <<ANSWER>>The listing brokerage and
listing broker
The responsibility of the overall closing belongs to the listing brokerage and listing
broker. The designated buyer's broker will be responsible only for the buyer's statement
of settlement.
A seller who will reside outside of Colorado after the sale may be subject to a 2 percent
withholding for state income tax if - <<ANSWER>>the sale price is over $100,000.
Properties below this amount are excluded from withholding. Also remember that the
closing entity is required to collect this money (up to 2 percent of the sales price) or the
seller's entire net proceeds, whichever is less.
The closing entity is most likely NOT the - <<ANSWER>>Colorado Department of
Revenue.
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