According to custom, who pays the costs on the day of closing for property taxes, utilities, etc.?
The buyer
The buyer and seller split these costs.
The seller
Typically, the broker pays the costs on the day of closing.
Which type of federally related lending transaction is covered under RESPA?
Foreclosure
Industrial property loans
Mortgages and home equity credit lines
Retail property loans
The seller net sheet is ______ of closing costs.
A bank-prepared estimate
A final accounting
A legally binding estimate
An estimate
What’s the term for a charge that either party has to pay at closing?
Balance
Credit
Debit
Mortgage
How are accrued real estate taxes that have been assessed but not yet due handled in a real estate transaction?
The assessment amount is split evenly between the buyer and seller and is paid on the day of closing.
The buyer is responsible for all taxes accrued in the year of purchase, and will pay the tax bill when due.
The tax bill will be prorated to the day of closing.
Typically, the seller pays the full assessed tax for the year on the day of closing.
Which act prohibits the payment of kickbacks from settlement service providers?
MDIA
RELA
RESPA
SEQRA
RESPA prohibits kickbacks between which parties?
Construction contractors
Fellow agents
Referral parties
Settlement service providers
What does RESPA stand for?
Real Estate Seller Prohibition Act
Real Estate Settlement Procedures Act
Real Estate Society Protection Act
Real Estate Standard Protection Act
A seller is closing on their property with the buyer. The seller paid the current year’s property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement?
The taxes are an accrued expense, and will appear as a buyer credit and a seller debit.
The taxes are an accrued expense, and will appear as a buyer debit and a seller credit.
The taxes are a prepaid expense, and will appear as a buyer credit and a seller debit.
The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.
Which of the following is provided at the time of a buyer’s offer and shows what the seller’s proceeds will be if the seller accepts the offer?
Closing Disclosure
Credit
Debit
Seller net sheet
What’s a typical prepaid item that goes into a seller’s credit column and a buyer’s debit column on a closing statement?
Broker fees
Loan fees
Property taxes
Recording fees
According to RESPA, what must the lender give to the borrower in the days immediately prior to settlement?
Closing Disclosure
Freddie Mac borrower disclosure
Loan Estimate
TIL Statement
On the closing statement, what’s the term for an amount that shows up in the party’s favor?
Balance
Credit
Debit
Mortgage
Your client is purchasing a rental property where the tenants pay month-to-month rent. Which of the following is the most likely way for the rent to be prorated?
Your client will begin to receive prorated rents starting on the first of the month following the closing date.
Your client will receive all rents collected as of the first of the month in which the closing is held, even if closing is on the last day of that month.
Your client will receive full rents for tenants whose leases expire within one month of the closing date, and prorated rents as of the day of closing for other tenants.
Your client will receive prorated rents beginning the day of closing.
What can listing agents prepare for their clients to give them unofficial estimates of all closing costs?
Brokerage escrow estimate
Good Faith Estimate
Loan Estimate
Seller net sheet
Which of the following is a typical accrued adjustment?
Heating oil in the tank
Prepaid taxes
Unpaid real estate taxes
Utilities billed and paid in advance
Which document is signed and agreed to at closing and reconciles what the final financial obligations are for both the buyer and seller?
Affidavit of title
Closing disclosure
Sales agreement
Title insurance policy
Which two items will appear on a closing disclosure?
Credits and debits
Repair invoices and seller credits
Seller net and buyer net
Title liens and buyer inspection items
On a closing statement, ______ goes in the seller’s credit column and the buyer’s debit column.
Loan fees
Prepaids
Taxes
Utility costs
Which act ensures a buyer in a residential transaction that’s financed by a federally related mortgage loan has knowledge of all settlement costs?
Civil Settlements Act
Dodd-Frank Act
RELA
RESPA
Which document provides an estimate of the costs a buyer is likely to pay at settlement before the closing?
Abstract of title
Closing Estimate
Loan Estimate
Sales agreement
When the buyer and seller both have costs to pay, which form shows who pays what?
Closing statement
Home inspection report
Loan Estimate
Purchase contract
A seller hasn’t paid the first quarter water bill on their property. It was due on April 1. The seller is closing with the buyer 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 buyer debit and a seller credit.
This is an accrued expense, and will appear as a seller debit and a buyer credit.
This is a prepaid expense, and will appear as a buyer debit and a seller credit.
This is a prepaid expense, and will appear as a seller debit and a buyer credit.
Seller Martin is looking at his Closing Disclosure. Which one of the following items is he likely to see?
Debits
Listing price
Seller net amount
Title liens
How are mortgage interest, taxes, insurance, and other similar expenses prorated?
The buyer typically pays the costs on the day of closing.
These are usually prorated based on a 360-day statutory year (30 days × 12 months).
These cannot be prorated. They must be prepaid.
The seller typically pays the costs on the day of closing.
According to RESPA, what must the lender give to the borrower at either the time of loan application or within three days following application?
Closing Disclosure
Freddie Mac borrower disclosure
Loan Estimate
TIL statement
15sect.unit1.CeSh.PreLic.Qonly.txt
A homebuyer decides to invest their small inheritance in real estate. They plan to add a building to immediately increase the value of the investment. Which economic characteristic of real property is this?
Area preference
Improvements
Permanence
Scarcity
Which physical characteristic of land says that the geographic location of a piece of land is fixed and can never change?
Immobility
Indestructibility
Scarcity
Uniqueness
How does topography impact land value?
It determines how long the referendum for a master plan will last.
It determines how many members can be on the planning board.
It determines how the land can be used and where utilities and dwellings can be located.
It increases the time it takes to evaluate site plans.
What term refers to the dimensions, physical features, and contours of the land?
Plat
Slope
Topography
Wetland
Which one of the following terms refers to the dimensions, physical features, and contours of land?
Plat
Slope
Topography
Wetland
Which economic characteristic of land says that land’s value can be affected by the changes made to it, such as adding buildings or fences?
Improvements
Permanence of investment
Scarcity
Uniqueness
Which one of the following is a true statement?
Topography determines how long the referendum for a master plan is.
Topography determines how many members can be on the planning board.
Topography determines how the land can be used and where utilities and dwellings can be located.
Topography increases the time it takes to evaluate site plans.
A client wants to move to San Francisco but is unsure whether they’ll be able to afford to live there. Housing is very expensive because there simply is no room to build any new housing units. Which economic characteristic does this reflect?
Area preference
Improvements
Permanence
Scarcity
What physical characteristic of land states that it cannot be destroyed?
Immobility
Indestructibility
Permanence of investment
Uniqueness
A developer purchased 78 acres and subdivided them into half-acre lots. They installed sewer and underground electric for the entire subdivision, hoping to recoup their initial infrastructure investment. This is an example of which economic characteristic of real property?
Area preference
Immobility
Permanence of investment
Scarcity
Which physical characteristic of land says that one piece of land isn’t exactly like another and is not interchangeable?
Immobility
Indestructibility
Permanence of investment
Uniqueness
Physical characteristics of land include its immobility, indestructibility, and ______.
Location
Permanence of investment
Scarcity
Uniqueness