Escrow And Settlement –Questions With Solutions
Which of the following would be considered a seller debit in the closing
statement? Correct Ans - The seller's current mortgage payoff
The seller's debits include expenses, the seller's share of prorated items,
and the payoff of the seller's current mortgage loan or other lien.
Who generally takes responsibility for reporting required information on
Form 1099-S after a real estate closing? Correct Ans - The closing
agent
Generally, the closing agent will notify the Internal Revenue Service; if not,
the lender should. However, brokers and the parties to the transaction can
also be held liable if the required report isn't filed.
Seller Jamison is closing on his property with buyer Conrad. Jamison 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?
Correct Ans - The taxes are a prepaid expense, and will appear as a
buyer debit and a seller credit.
Per FIRPTA, trusts with foreign beneficiaries must withhold what
percentage from the sale of U.S. properties? Correct Ans - 35%
Marco, a salesperson for Maricopa Realty, just walked out of a closing with
his commission check in hand. Is this legal? Correct Ans - Yes, if the
broker issues written permission to the closing company.
Arizona statutes permit closing companies to disburse commissions
directly to licensees at closing if the broker has provided written
permission to the closing company.
Angelique, a foreign investor, is getting ready to sell her urban condo. What
percentage of withholding of the sales price will FIRPTA require?
Correct Ans - 15%
The Real Estate Settlement and Procedures Act requires that lenders
provide borrowers with a full disclosure of closing costs in a closing
Which of the following would be considered a seller debit in the closing
statement? Correct Ans - The seller's current mortgage payoff
The seller's debits include expenses, the seller's share of prorated items,
and the payoff of the seller's current mortgage loan or other lien.
Who generally takes responsibility for reporting required information on
Form 1099-S after a real estate closing? Correct Ans - The closing
agent
Generally, the closing agent will notify the Internal Revenue Service; if not,
the lender should. However, brokers and the parties to the transaction can
also be held liable if the required report isn't filed.
Seller Jamison is closing on his property with buyer Conrad. Jamison 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?
Correct Ans - The taxes are a prepaid expense, and will appear as a
buyer debit and a seller credit.
Per FIRPTA, trusts with foreign beneficiaries must withhold what
percentage from the sale of U.S. properties? Correct Ans - 35%
Marco, a salesperson for Maricopa Realty, just walked out of a closing with
his commission check in hand. Is this legal? Correct Ans - Yes, if the
broker issues written permission to the closing company.
Arizona statutes permit closing companies to disburse commissions
directly to licensees at closing if the broker has provided written
permission to the closing company.
Angelique, a foreign investor, is getting ready to sell her urban condo. What
percentage of withholding of the sales price will FIRPTA require?
Correct Ans - 15%
The Real Estate Settlement and Procedures Act requires that lenders
provide borrowers with a full disclosure of closing costs in a closing
