Unit 23: Closing Real Estate Transaction

All encumbrances and liens shown on the report of title (other than those waived or agreed to by the purchaser and listed in the contract) must be removed so that the title can be delivered free and clear. The removal of such encumbrances is the duty of the:

A) seller.

B) buyer.

C) broker.

D) title company.

A) seller.

Legal title passes from seller to buyer:

A) on the date of execution of the deed.

B) when the deed is delivered and accepted.

C) when the closing statement has been signed.

D) when the deed is placed in escrow.

B) when the deed is delivered and accepted.

Which of these would a lender generally require at the time of closing?

A) Market value appraisal

B) Application

C) Title insurance

D) Credit report

C) Title insurance

The Closing Disclosure (CD) may be used to illustrate all settlement charges for:

A) every real estate transaction.

B) transactions financed by VA and FHA loans only.

C) all transactions involving commercial property.

D) residential transactions financed by federally related mortgage loans.

D) residential transactions financed by federally related mortgage loans.

The principal amount of a purchaser’s new mortgage loan is a:

A) credit to the seller.

B) debit to the seller.

C) credit to the buyer.

D) debit to the buyer.

C) credit to the buyer.

The earnest money left on deposit with the seller’s real estate broker is a:

A) credit to the seller.

B) credit to the buyer.

C) balancing factor.

D) debit to the buyer.

B) credit to the buyer.

If a seller collected rent of $1,400 payable in advance, from an attic tenant on April 1, which of these is TRUE at the closing on April 15?

A) Seller owes buyer $700.

B) Buyer owes seller $700.

C) Seller owes buyer $1,400.

D) Buyer owes seller $1,400.

A) Seller owes buyer $700.

Security deposits are listed on a closing statement as a credit to the:

A) seller.

B) lender.

C) buyer.

D) broker.

C) buyer.

A building was purchased for $285,000 with 10% down and a loan for the balance. If the lender charged the buyer two discount points, how much cash did the buyer need to come up with at closing if the buyer incurred no other costs?

A) $28,500

B) $30,200

C) $31,700

D) $33,630

D) $33,630

A buyer of a $300,000 home has paid $22,000 as earnest money and has a loan commitment for 70% of the purchase price. How much more cash does the buyer need to bring to the closing, provided the buyer has no closing costs?

A) $68,000

B) $30,000

C) $58,000

D) $61,600

A) $68,000

At closing, the listing broker’s commission usually is shown as a:

A) credit to the seller.

B) credit to the buyer.

C) debit to the buyer.

D) debit to the seller.

D) debit to the seller.

At the closing of a real estate transaction, the person performing the settlement gave the buyer a credit for certain accrued items. These items were:

A) bills relating to the property that will have to be paid by the buyer.

B) bills relating to the property that have already been paid by the seller.

C) all the seller’s real estate bills.

D) all the buyer’s real estate bills.

A) bills relating to the property that will have to be paid by the buyer.

The purpose of TRID is to:

A) make sure buyers do not borrow more than they can repay.

B) make real estate licensees more responsive to buyers’ needs.

C) establish standard escrow and appraisal procedures.

D) give more transparency to the loan process.

D) give more transparency to the loan process.

The document that provides borrowers with general information about their loan is the:

A) mortgage disclosure statement.

B) Loan Estimate.

C) Good Faith Estimate (GFE).

D) closing statement.

B) Loan Estimate.

Consummation may occur how many days after the issuance of the Closing Disclosure?

A) Seven business days

B) Three business days

C) Three business days after closing

D) Three business days before consummation

B) Three business days

Under TRID, if the APR increases by .125 percent, how many business days does the lender have to reissue another LE?

A) Two

B) Three

C) Four

D) Five

B) Three

If the annual real estate taxes on a property were $2,129 last year, what would be the per diem amount for prorations this year using the actual-number-of-days method?

A) $5.83

B) $4.90

C) $5.86

D) $5.98

A) $5.83

In Illinois, which party customarily prepares the closing statement?

A) Seller’s attorney

B) Buyer’s attorney

C) Listing broker

D) Seller’s lender

A) Seller’s attorney

Which of these formulas BEST expresses the statutory month variation method of calculating a daily prorated charge for an annual prepaid expense?

A) (Total charge ÷ 12) ÷ actual days in month of closing = daily prorated charge

B) (Total charge ÷ 360) × 12 = daily prorated charge

C) (Total charge ÷ 360) × actual days in month of closing = daily prorated charge

D) (Total charge ÷ 365 = y) (y ÷ 12) × actual days in closing month = daily prorated charge

A) (Total charge ÷ 12) ÷ actual days in month of closing = daily prorated charge

In Illinois, which party usually pays the state and county transfer taxes?

A) Buyer

B) Buyer pays state taxes; seller pays county and municipal taxes

C) Whichever party is specified in the local ordinance

D) Seller

D) Seller