Deck 15: Title Closing and Escrow

Question 1

Deed delivery in an escrow is accomplished by

A) the escrow holder accepting the deed on behalf of the grantee.
B) delivery of the deed by the escrow holder to the grantor.
C) a courier service.
D) the title company.

Answer 1

A
Deed delivery in an escrow is accomplished by the escrow holder accepting the deed on behalf of the grantee.

Question 2

Of the following, the final action to be taken to complete a closing is

A) acknowledgement of all instruments.
B) recordation of appropriate instruments.
C) signing of the deed.
D) title search.

Answer 2

B
Recordation of appropriate instruments would be the final action taken to complete a closing.

Question 3

A seller received a net amount of $29,817 after paying off a $53,000 loan balance, $1,213 in miscellaneous costs, and a 7% brokerage fee. What was the sale price of the house? (round to nearest dollar)

A) $77,020
B) $84,030
C) $90,355
D) $90,360

Answer 3

C
The seller received 29,817 + 53,000 + 1,213 (84,030). This was 93% of the sales price. So 84,030/.93 = 90,355 (rounded).

Question 4

All of the following items are usually paid by the seller at the close of a residential sale escrow EXCEPT

A) title search.
B) appraisal fee.
C) commission.
D) title insurance.

Question 5

A buyer agreed to put down $5,000 as earnest money toward a house he was buying for $97,000. The offer was based upon receipt of an 80% loan from a bank. The attorney's fees were $2,000 and all other buyer costs amounted to $1,500. How much money will the buyer need to pay at settlement?

A) $14,400
B) $17,900
C) $17,700
D) $22,900

Question 6

The proration of prepaid condominium association dues will result in a

A) charge to the seller and credit to the buyer.
B) charge to the buyer and credit to the seller.
C) charge to the seller and credit to the association.
D) charge to the association and credit to the buyer.

Question 7

For what price must a house sell if the seller is to net $30,000 after paying $1,500 in settlement and the broker's commission of 6% (rounded to the nearest dollar)?

A) $30,000
B) $32,011
C) $32,300
D) $33,511

Question 8

A disinterested party representing both buyer and seller in a real estate sale is the

A) broker.
B) salesperson.
C) escrow agent.
D) attorney-in-fact.

Question 9

A seller received $81,000 at the close of escrow after paying $1,750 in closing costs and a 6% brokerage fee. What was the sales price of the house?

A) $82,750
B) $87,480
C) $89,230
D) $88,032

Question 10

On the day of closing a real estate sale, existing property taxes and insurance are

A) left as is.
B) paid by the bank out of the reserves.
C) prorated.
D) paid in full by the seller.

Question 11

A couple buys a house complete with furnishings. They assume and agree to pay the existing mortgage. All of the following documents should be used in closing EXCEPT

A) note and mortgage.
B) assumption papers.
C) bill of sale.
D) closing instructions.

Question 12

The property tax year runs from January 1 through December 31. The taxes on a certain house are $1,440 this year and have not yet been paid. If the house sells and the closing date is December 10ᵗʰ, the

A) buyer owes the seller $82.85.
B) buyer owes the seller $1,357.15.
C) seller owes the buyer $82.85.
D) seller owes the buyer $1,357.15.

Question 13

Escrow accounts are opened for the protection of the interests of the

A) general public.
B) seller.
C) buyer and seller.
D) buyer.

Question 14

The home was sold on July 18. The next payment date is August 1. The buyer agreed to assume the seller's 6% loan which has a balance of $36,800 as of July 1. Interest on this loan would be prorated as

A) debit buyer $77.16 and credit seller $106.84.
B) debit seller $77.16 and credit buyer $106.84.
C) credit seller $106.84 and charge buyer $106.84.
D) credit buyer $106.84 and charge seller $106.84.

Question 15

The property tax year runs from January 1 to December 31. The taxes on a certain house are $1,440 this year, none of which has been paid. If the house sells, not in a leap year, and the closing date is June 12, the

A) buyer owes the seller $796.93.
B) buyer owes the seller $643.07.
C) seller owes the buyer $796.93.
D) seller owes the buyer $643.07.

Question 16

If an existing escrow is to be canceled, it must be done

A) only by the buyer.
B) by mutual rescission.
C) by either party.
D) only by the seller.

Question 17

A seller has agreed to pay 80% of the title insurance company's fee on a sale. The company charges $550 for the title policy, plus $95.50 for the title search and $50 for processing the papers. What is the difference between what the seller has to pay and what the buyer has to pay?

A) 20%
B) $139.10
C) $417.30
D) $556.40

Question 18

Pat bought a home for $75,000. He put up $5,000 earnest money and secured an 80% loan. The bank charged four points and a 2.5% loan fee. Pat received a $900 credit from the proration of taxes. How much cash will he need to bring to close this transaction?

A) $13,000
B) $13,900
C) $13,975
D) $18,000

Question 19

A 9% amortized loan with a November 1 balance of $40,000 requires the payment of principal and interest at the first of each month. If prorating is done as of the 20ᵗʰ of November, the

A) buyer owes the seller $100.
B) buyer owes the seller $200.
C) seller owes the buyer $100.
D) seller owes the buyer $200.

Question 20

How many days are normally needed to close a residential sale that requires no financing?

A) 1 to 29
B) 30 to 60
C) 61 to 90
D) over 90

Question 21

One advantage of the escrow closing method is that it can eliminate personal confrontation between buyer and seller.

Question 22

The escrow agent is always selected by the real estate broker.

Question 23

A buyer and a seller are likely to shake hands upon completion of a real estate transaction involving an escrow closing.

Question 24

A buyer's walk-through is conducted for the purpose of

A) appraising the property in order to get a loan on it.
B) inspecting the property for major structural defects.
C) meeting the seller and obtaining the keys to the property.
D) making a final inspection just prior to closing.

Question 25

During a "dry closing" the money is disbursed to the seller.

Question 26

During a "dry closing" the deed is disbursed to the buyer.

Question 27

Escrow closings cannot be used when refinancing a property.

Question 28

In an escrow closing, the escrow agent serves as agent for the buyer.

Question 29

A settlement meeting may take place in the offices of

A) the real estate agent.
B) an attorney.
C) a title company.
D) any of the above.

Question 30

The seller has just sold her home and received a closing statement and the balance due to her. Presuming no agreement to the contrary, which of the following should have been charged to the buyer?

A) Proration of taxes with a debit to the seller for the tax year up to closing
B) Recording fee for the deed prepared by the sellers' attorney
C) Sales commission
D) Amount required to pay off the seller's loan

Question 31

A local federal savings and loan makes a home loan. RESPA requires that

A) a good faith estimate of closing costs be given to the borrower.
B) an HEW closing statement be used for the closing.
C) a credit application be filed with escrow.
D) a credit statement be given the borrower.

Question 32

In a closing statement, the amount of interest on an assumed loan is a

A) charge to the seller only.
B) charge to the buyer only.
C) charge to the seller and credit to the buyer.
D) charge to the buyer and credit to the seller.

Question 33

Details that must be handled between the time a purchase contract is signed and the closing typically include

A) title search.
B) deed preparation.
C) loan arrangements.
D) all of the above.

Question 34

When a real estate settlement is held in escrow

A) there is no closing meeting.
B) the closing process may be conducted by mail.
C) both a and b.
D) neither a nor b.

Question 35

According to the Real Estate Settlement and Procedures Act, which of the following is illegal?

A) Examination of the HUD settlement statement the day before closing
B) Payment of kickbacks
C) Delivery of the closing statement on the day of closing
D) Disbursement of commission fees

Question 36

In an escrow closing, funds are disbursed when all escrow papers have been signed and the buyer brings in the money.

Question 37

Which of the following may serve as an escrow agent?

A) A bank
B) An independent escrow company
C) A lender
D) Any of the above

Question 38

In most states in which title transfers are handled in escrow, the agents must be bonded.

Question 39

The purpose of a settlement statement is to provide an accounting of all funds involved in a transaction.

Question 40

Under the Real Estate Settlement and Procedures Act, all of the following are required of the lender EXCEPT

A) submission to the borrower of the booklet "Settlement Costs and You".
B) submission of a "good faith estimate" of loan closing costs.
C) disclosure of the "Annual Percentage Rate".
D) use of the Uniform Settlement Statement for closing.

Question 41

RESPA prohibits ____________________ and fees for services not performed during the closing process.

Question 42

A(n)____________________ statement is a statement by an owner or lienholder as to the balance due on an existing lien against the property.

Question 43

Among the items to be prorated at a settlement or escrow closing taxes and rents.

Question 44

In some states, the use of a ____________________ month may be used instead of the actual days of the month.

Question 45

The deposit of documents and funds with a ____________________ third party plus instructions as to how to conduct the closing is called an escrow closing.

Question 46

In prorating rents, the dollar amount is a credit to the seller and a debit to the buyer.

Question 47

The final inspection of the property just prior to the settlement date is called a _________________________.

Question 48

The division of ongoing expenses and income items between the buyer and seller is called prorating.

Question 49

A ____________________ statement is a statement of the unpaid balance on a note secured by a trust deed.

Question 50

Outside of the closing means a party to the closing has paid someone directly and not through the closing.

Question 51

A settlement statement, also called a ____________________ statement, is given to the buyer and seller to summarize the financial aspects of their transaction.

Question 52

Prorations of items in a real estate closing are made usually as of the date of the signing of the contract.

Question 53

An accounting of funds to the buyer and the seller at the completion of a real estate transaction is called a settlement statement.

Question 54

The HUD Settlement Statement required of all federally related real estate lenders is known as the ____________________.

Question 55

In a situation where all the documents are not yet available but it would be difficult to reschedule the closing meeting, the parties may agree to a ____________________ closing.

Question 56

Under the provisions of RESPA payments outside closing are prohibited.

Question 57

In a typical closing, insurance prorations will usually be a credit to the seller and an expense to the buyer.

Question 58

RESPA prohibits the seller from requiring that the buyer purchase title insurance from a particular title company.

Question 59

The person placed in charge of an escrow is called an escrow ____________________.

Question 60

When a home is sold and a new loan by an institutional lender is required, the typical time between purchase contract signing and settlement will most likely be from 1 to 29 days.

Question 61

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
federally related lenders are required to use this particular closing statement format

Question 62

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
statement by an owner or lienholder as to the balance due on an existing lien against the property

Question 63

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
a method to avoid rescheduling a closing meeting when a document, known to be on its way, has not yet arrived

Question 64

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
the process of completing a real estate transaction

Question 65

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
refers to closing costs paid by the buyer or seller that did not go through the closing agent

Question 66

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
an accounting of funds to the buyer and seller at the completion of a real estate transaction

Question 67

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
a federal law that deals with procedures to be followed in certain types of real estate closings

Question 68

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
deposit of documents and funds with a neutral third party plus instructions as to how to conduct the closing

Question 69

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
a custom in some states of using a 30-day month to simplify proration calculations

Question 70

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
a meeting at which the buyer pays for the property and receives a deed for it;also called a settlement meeting

Question 71

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
conditions, covenants, and restrictions of a condominium, cooperative, or a planned unit development

Question 72

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
shows the unpaid balance on a loan and is provided by the lender

Question 73

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
an escrow for the purpose of financing a property not in connection with a sale

Question 74

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
the day on which the closing is finalized. Also called the settlement date

Question 75

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
to divide the ongoing income and expenses of a property between the buyer and the seller

Question 76

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
the moment at which title passes from the seller to the buyer

Question 77

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
the person or firm in charge of an escrow

Question 78

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
a list of anticipated closing costs given to the borrower by the lender as required by RESPA

Question 79

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
a final inspection of the property just prior to the settlement date

Question 80

Choose the one most appropriate answer for each.
a.30-day month
k.HUD settlement statement (HUD-1)
b.beneficiary statement
l.loan escrow
c.CC&Rs
m.offset statement
d.closing date
n.outside of the closing
e.closing meeting
o.prorate
f.deed delivery
p.RESPA
g.dry closing
q.settlement meeting
h.escrow agent
r.settlement statement
i.escrow closing
s.title closing
j.good faith estimate
t.walk-through
when seller and buyer meet in person to close a real estate transaction