Multiple Choice Identify the letter of the choice that best
completes the statement or answers the question.
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1.
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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 |
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2.
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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 |
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3.
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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 |
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4.
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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 |
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5.
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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 |
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6.
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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 |
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7.
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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 |
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8.
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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 |
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9.
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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 |
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10.
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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 |
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11.
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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 |
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12.
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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 |
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13.
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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 |
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14.
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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 |
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15.
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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 |
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16.
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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 |
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17.
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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. |
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18.
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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?
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19.
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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?
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20.
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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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