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Proration Problems

Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 1. 

A buyer has assumed the 1-year hazard insurance policy which was effective March 12. The seller paid $456.25 for the policy and the closing is to be held November 9. If the seller is responsible for the day of closing and a 365 day year is to be used, how much will the buyer pay for the assumed policy?
a.
$303.75
c.
$165.45
b.
$256.25
d.
$152.50
 

 2. 

The licensee is preparing a summary of the seller's net proceeds on the sale of his house. All of the following items are a debit (charge) to the seller EXCEPT:
a.
The $45,454 payoff of an existing loan
c.
The $675.50 unpaid property tax
b.
The $560 in the seller's tax reserve account
d.
The $6,000 brokers commission
 

 3. 

A house is sold for $85,000 with the buyer receiving an 80 percent loan. If the seller is to pay 5 discount points, a 6 percent commission and additional closing costs of $704, how much will the seller net at closing?
a.
$75,796
c.
$77,596
b.
$79,600
d.
$74,946
 

 4. 

A house with an existing mortgage of $76,454 sold for $175,600. If the seller has closing costs of $6,459 plus a commission fee of 7%, what will he net?
a.
$71,400
c.
$81,500
b.
$80,395
d.
$110,300
 

 5. 

A seller listed his property for $150,000 with a commission rate of 7%. The existing 1st mortgage is $86,540 and closing costs are $1,800. How much would the seller receive if the property sold for the full listed price?
a.
$65,456
c.
$56,456
b.
$71,196
d.
$51,160
 

 6. 

At settlement, the buyer has agreed to pay $300 for title insurance, $700 for real estate taxes, $500 for a title examination and $100 for a survey. He must also pay .25 percent of the sales price for hazard insurance and an equal amount for flood insurance_ If the buyer had put down $5,000 in earnest money, how much additional cash would he have to pay to buy a $90,000 house with a 75 percent loan?
a.
$23,600
c.
$21,600
b.
$25,700
d.
$19,550
 

 7. 


Buyer Ty Richardson gave a broker a 20% earnest money deposit on the sale of a $164,000 property. The broker paid, for the seller, the appraisal fee of $450 and the credit report fee of $50 and the commission fee is 6% of the sale price. How much would the broker owe the seller out of the trust account?
a.
$22,460
c.
$19,458
b.
$26,554
d.
$18,500
 

 8. 

An apartment building is listed for $890,500. A potential buyer offers to assume the $325,000 1st loan and pay $465,500 in cash. The seller accepts the offer and allows the broker to deduct $985 for the new hazard insurance policy and 10% for a commission. If the earnest money deposit is 15% of the sale price how much will the seller receive from the earnest money account?
a.
$38,540
c.
$43,345
b.
$45,670
d.
$35,765
 

 9. 

A buyer purchased a property for $125,600. tithe lender charged a loan origination fee of 4 points and the buyer made a down payment of 22%, what was the amount of the loan origination fee?
a.
$3,765
c.
$3,919
b.
$3,654
d.
$4,245
 

 10. 

A bank has agreed to make a 75% loan in the amount of $124,300 on a property. The buyer has agreed to pay an earnest money deposit of 10% of the sale price. How much is the deposit?
a.
$25,747
c.
$12,430
b.
$16,573
d.
$24,645
 

 11. 

Jay Gray is buying a property with the closing set for March 14. As of March 1, the balance on the 1st mortgage was $89,677.45 at 8.5% and the balance on the 2nd mortgage was $44,343.36 at 11.7%. Both loans are due on the first of the month and interest is charged in arrears. If the buyer assumes both loans, how much interest will be debited to the seller at closing using a 360-day year if the seller is responsible for the day of closing?
a.
$486.12
c.
$546.56
b.
$765.67
d.
$498.20
 

 12. 

A buyer is purchasing an apartment building and is assuming the first and second mortgages. Closing is set for May 18 and as of May 1 the first mortgage balance was $124,564.59 at 9.5% and the second mortgage balance was $76,545.69 at 12.5%, both loan's interest due in arrears. How much interest is debited the seller at dosing based on a 30-day month with the seller responsible for the settlement day
a.
$1,700.65
c.
$1,456.78
b.
$1,904.50
d.
$1,070.09
 

 13. 

The seller has prepaid the yard maintenance fees on a property for the month of September. If the closing is set for September 21, the buyer is responsible for the day of settlement, and, the fee is $325 per month, how much will the buyer be charged based on a 30-day month?
a.
$108.33
c.
$100.83
b.
$180.54
d.
$99.98
 

 14. 

A property has a fair market value of $175,400 and is assessed at 60% of market value. The tax rate in the area is 67 mills and taxes for the year have been paid in advance. If the buyer is to pay the day of settlement, what is the buyer's share of the tax if closing is to be held on September 11, using a 360 day year?
a.
$3,454.56
c.
$2,540.55
b.
$6,676.45
d.
$2,154.50
 

 15. 

John Wright sold his house for $155,000. The buyer paid closing costs of $1,240 in addition to the loan origination fee of 2%. If the lender wants a down payment of 25% of the purchase price how much money is required of the buyer to close the transaction?
a.
$35,400
c.
$42,500
b.
$42,315
d.
$42,530
 

 16. 

The buyer made an earnest money deposit of 30% of the sales price on the purchase of an apartment building that was listed for $400,000. The buyer offers to assume the seller's mortgage of $120,000 and pay $250,000 in cash. If the seller accepts the offer and authorizes the broker to pay for the buyer's title policy in the amount of $650, repair of the furnace in the amount of $400 and receive a commission of 9%, how much would the seller receive from the trust account at closing?
a.
$75,000
c.
$80,540
b.
$76,650
d.
$85,650
 

 17. 

Which of the following is NOT a cost to the seller at closing?
a.
Pay off of an existing loan
c.
Commission fees
b.
Purchase money mortgage
d.
Funds in seller's tax and insurance reserve (escrow) accounts.
 

 18. 

The seller has prepaid the cost to maintain the swimming pool and the yard for the month of June in the amount of $300. If the closing date is June 22 what does the buyer owe the seller at closing if they agreed to prorate all expenses?
a.
$60
c.
$80
b.
$70
d.
$90
 

 19. 

A buyer wants to assume both mortgages on a property. As of June 1 the balance of the first loan was $45,675 at 9.5% interest and the second loan was $19,654 at 11.4% interest paid in arrears. Approximately how much interest would be debited to the seller if the closing was held June 27 using a 360-day year?
a.
$414
c.
$475
b.
$463
d.
$524
 

 20. 

The Brown's owe $234,000 on their home. It has sold for $360,000 and they have agreed to pay a 7½ % commission to the broker who took the listing. If their other closing costs are $4,450 and the property sells for full price, what will they receive at closing?
a.
$94,550
c.
$100,950
b.
$90,450
d.
$80,950
 



 
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