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131 Cards in this Set
- Front
- Back
what is another name for closing?
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settlement
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The closing process includes?
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the signing of documents that transfer the title of the proprety from the seller to the buyer
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closing is?
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the final meeting of the parties involved in the real estate transaction at which the transaction documents are signed and the deed and money are transferred
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What does the closing agent do at closing?
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holds the documentents and money until all of the terms, condition and contingencies have been met.
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What happens once all is in order?
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the loan will be funded and the money will be sent to the closing agent along with the buyers funds.
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What happens next?
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closing statements are prepared and deliverd, deeds are recoorded and money is paid to the proper parties.
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What four things must be accomplished with the paperwork?
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prepared, inspected and corrected and signed
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For preparation what must the closing agent do?
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conducts a title search and obtains certificates of estoppel to verify outstanding balances on loans, liens and encumbrances.
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What does the closing agent use to prepare the documents?
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sales contract, invoices submitted by various third parties and instructions from the lender to prepare the documents.
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HUD-1 Settlement Statement does what?
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verifies where all the money is going
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Do buyers and sellers approve the HUD-1?
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Yes
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When are escrow instructions used in Florida?
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when lenders request that the buyer and seller approve the instructions as part of the closing
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Inspection is what
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where both parties review the documents that are of interest to their side
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approval and exchange are what?
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interwoven due to certain events needing to take place before others.
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Who attends the closing meeting?
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closing agent, seller, buyer, title officer, loan officer, real estate agents and sometimes attorneys.
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WHere can the meeting take place?
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office of the broker or attorneys, lender or the title insurance company.
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who typically conducts the meeting?
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the title agent
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the real estate associate's role at closing is what?
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as prepared as possible to represent the client's best interests.
make sure all agents know what may occur in the meeting makes sure the closing agent has access to all needed information so the transaction can close |
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What must the seller or seller's attorney do?
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prepare the paperwork that will ensure a smooth tranfer of ownership and answer questions regarding the status of the property and take the documents to the closing meeting
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What are the documents needed for a closing meeting?
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Deed,
survey property tax bill homeowners insurance policy title insurance policy abstract of title flood insurance policy |
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Deed
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a warranty deed is the most common deed used
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survey
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shows the property's boundaires, improvements, and any encroachments
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Property tax bill
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try to bring both the bill and receipt to show how much is owed. It the tax bill is not available, the taxes are estimated to close teh transaction.
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Homeowner's insurance policy
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lenders will often requrie that this type of insurance be carried.
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Title insurance policy
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lenders typically require this to protect them from claims of ownership by people other than the buyer
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abstract of title
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if title insurance is not used, the seller is responsible for bringing the abstract of title or the the abstracter to the meeting.
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Termite inspection certificate
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FHA or VA loans require this certificate and legally required in certain areas
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water and sewer certification
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properties that are not connected to public facilities must have a certificate that indicates that they have a private water source and sewage disposal system
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Building code compliance certificate
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some areas require that a property be inspected before sale to ensure that it conforms to all current building codes
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Certicicate of occupancy
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new homes require this and the city will provide it
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off set statement
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this is a document that is used if their is a lien on the property that will indicate the balance due
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beneficiary statement
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lenders statement that cites important info about the trust deed, including unpaid balance, monthly payment and interest rate
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bill of sale for personal property
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details all the personal items being sold with the property
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Homeowners association documents include:
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restrictions, by laws, articles of incorporation, reserve fund report, management company contract or name
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Documents needed for an income property?
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current leases, rent schedules, lists of current expenditures, letter to current tenants informing them of change in ownership
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Buyer and buyers attorney responsibilities
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have the money available to pay for the property and the closing. they must also inform the lender of when and wher the closign meeting will occur.
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what obligations must be complete prior to the closing?
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complete any contingencies, finances, if need, deposit additional funds required to pay property and closing costs with closing agent
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Lender
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wire transfer the amount of the loan or prepare a cashier's check to be presendted at the meeting.
Create a note and mortgage to be signed by the buyer. |
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Title insurance or title abstracter
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this is only if a title insurance policy is being issued. the representative from the title company must bring info to the closing meeting that provides the status of the properties title.
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Marketable title
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is a saleable title reasonably free from risk of litigation over possible defects
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abstractors
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investigated the status of the title to property
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abstract of title
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is a written summaryof all useful documents discoverd in a title search
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chain of title
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is the public record of prior transfers and encumbrances affecting the title of a parcel of land
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opinion of title
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is written statement by an attorney or title agent determing whether the property has clear and marketable title or is encumbered.
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title plants
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the books that stated the title was clear
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title insurance
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was created in response to the need for reliable assurance of title combined with an insurance against loss caused by errors in searching recoreds and reporting the status of title
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clouds the title
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if there is a missing connectiom in a property's history or ownership, if a deed was recorded in error or is incomplete.
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Lenders title insurance policy
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is designed to benefit the lender
typically have extended coverage cover only the amount of money still owed on the loan, therefore the lenders policies decline in coverage as the buyer pays off the mortage. at closing typically the buyer would pay for the lenders title insurance policy |
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owner's title insurance policy
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is designed to benefit the owner
usually a standar policy is in force for the duration of the policy owners policy can't be assigned seller of property typically pays for this |
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ALTA- American land title association
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national trade association for title insurance companies and title insurance agens
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two types of title insurance are:
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standard and extended
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standard coverage policy
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usually issued to home buyers,
no physical inspection of the property is required and teh buyer is proteched against all recorded matter and risk. |
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what does a standard coverage policy protect the buyer from
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matters of record
forgery impersonation possibility that a deed of record was not delivered with intent to convey title the loss, which might arise from the lien of federal estate taxes the expense incurred in defending the title mining claims reservation in patents or water rights zoning ordinances |
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it does not protect against
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defects in the title know to the holder
easements and liens which are not shown by the public records rights or claims of persons in physical possession of the land who claims are not shown by public record |
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extended coverage policy cover
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unrecorded hazards such as: outstanding mechanic's liens, tax liens, encumbrances, enroachments, unrecorded physical easements, facts a correcy survey would show certain water claims, parties in possision including tenants and owners under unrecorded deeds
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The Florida department of financial services is respoinsible for what?
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licensure of title insurance companies and agents of the title insurance companies
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title insurance are paid how?
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one time fee and are not prorated at closing
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how long does title insurance remain in effect
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until the property is sold even if the owner dies
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Title insurance companies are prohibited from doing what?
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giving rebates or dividing any title insurance premiums
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is taxation indirect or direct?
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indirect
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land taxation began in what year and by who?
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1086 william the conqueror
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property taxes are paid when /
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in arrears (at the end of each tax year)
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on jan 1st prperty taxes become what on real property ?
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a lien
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when is the first instalment due?
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november 1 and offers a discount
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can property taxes be cleared by a foreclosure?
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No
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what is the schedule for property taxes
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Nov 1 property taxes are due for a current year
December 31 current tax year ends Jan 1- start of new tax year March 1- tax exemption filing periord ends from prior year April 1- property taxes become delinquent |
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ad valorem
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means according to value examples are: property taxes, special assessments and transer taxes
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real property is taxed how?
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at the local level through ad valoreum property taxes, special assessments and transfer taxes
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Florida tax districts are broken into four categories:
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1.) City
2.) county 3.) school board 4.) special |
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taxing authority
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is an organization that is legally able to set (levy) and colect a tax
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each of these authorities can impose their own taxes?
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local governments,
school districts drainage districts sanitary districts recreational districts |
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immune properties
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those owned by governements
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exempt properties
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hospitals, homesteads and property belonging to religious organizations
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homestead tax exemption must be filed by when
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by March 1st and the home must be occupied as of Jan 1
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who do you file homestead with?
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assessor's office
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who's responsibility is it to file homestead and terminate homestead?
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the owner
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other exemptions
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widows or widowers
legally blind permanently disable only two per year |
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Can property taxes me made in payments
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yes in four installments
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What is the property tax based off of?
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assessed value of the property
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just value
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is the fair and reasonable value based on objective valuation methods , the location, size and condition of the property.
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save our home amendment
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is a cap on the amount a homesteaded property's assessed value may increase annually. no more than 3% or the percentage change of the CPI
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Taxable value
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is the value of the property after exemptions have been deducted.
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tax rate
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is applied to the taxable value of the property to determine the annual property taxes due.
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tax rates are shown in what?
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Mills
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Mill
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is one one thousandth of a dollar.
dollar has 1,"",000 mills, therefore a cent has 10 mills. So a tax rate of .010 equals 10 mils |
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what happens if you dont pay your property taxes
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a tax certificate is created to sell the property
force a public foreclosure after two years and requesting a tax deed. |
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tax deed
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is a document given by a governmental body to convey title to a property that was sold for nonpayment of taxes
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closing costs
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are the expenses buyers and sellers normally incur in the transfer of ownership of real property
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closing statement
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is an accounting of funds made to the sellers and buyers individually
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typically who pays for title insurance?
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the seller and any deliquent liens
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closing costs are usually what?
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prorated or allocated
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allocation
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assigns a cost (generaly one not yet spent) to either the seller or the buyer
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proration
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divides a cost (most often one that has already been paid) between the two parties ,
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what two fees are typically prorated
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property tax and interest
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when is the proration costs due?
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at the date of closing
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what two ways are proration calculated?
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365 day year method or a 30 day month method
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the closing day would go to who in the calucuation?
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the buyer
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Property tax
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are typically prorated and if the seller prepaid, they expect to get the unused portion back as a credit.
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assumable loans
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when a buyer assumes an existing loan the interest to paid at the end of the year goes to the seller who owes their portion of time used.
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escrow account is also referred to as an?
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impound account
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what is an escrow acccount?
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a trus account for funds set aside for future recurring costs relating to a property, such as payment of property taxes and insurance
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what three categories do allocated costs fall into?
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inspections, required retrofits and fees
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some items that may be on the list include?
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transfer taxes, recording fees and hazard and title insurance
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transfer taxes
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are monies paid to state governments to transfer the ownership of property from one owner to another which allows government to assess property taxes
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what is another name for transfer tax?
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Documentary stamp tax or conveyance tax
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who normally pays the transfer of taxes?
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the seller
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who normally pays state taxes associated with financing?
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the buyer
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there are three types of transfer taxes, what are they?
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documentary stamp tax on deeds
documentary stamp tax on notes intangible tax on new mortgages |
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Documentary stamp tax on notes
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aka: doc stamps or stamp tax b/c the county recorder places stamps on the recorded deed or note to indicate the amount of the documentary transfer tax paid.
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how is this calculated?
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.35 cents per 100 dollars on the face value of the note (assumed notes are paid on the unpaid balance of the note)
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intangible tax on new mortgages
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which is not a stamp tax
it is due before a new mortgage is recorded .002 per one dollar of debt |
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documentary stamp act on deeds
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.70 per 100 dolars
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recording fees
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are monies paid to government agencies, typically county to legally record documents that concern the property
these are paid by the buyer |
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title and hazard insurance
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typically both the owner and the lender take out seperate policies
the previous owner pays for a new owners policy and the buyer pays the lenders |
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hazard insurance
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is a property insurance policy that protects both the owner and lender against physical hazards to property such as fire, windstorm damage. Lenders require this and they get the money from the claim.
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credit
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is the reduction or elimination of an assest or expense and is recorded on the right side on a closing statement
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debit
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shows the amount owed
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who pays for the preparation of the deed?
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the seller and the buyer pays for the preparation of the loan documents
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sellers statement is?
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a record of the financial proceeds the sellers receive upon the transaction's closing.
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Buyers statement?
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record of costs and credits incurred for the purchase of the property
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closing statement
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is an accounting of funds made to the sellers and buyers individually
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who completes the closing statement?
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the closing agent
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estimated closing statement
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serves as a preliminary copy of the HUD-1 Settlement and outlines all credits and debits related to completing the sale.
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HUD - 1 Settlement Statement
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uniform settlement statement is a standardized two page form that serves as the official itemized summary of all settlement charges. also showing the flow of money
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composite closing statement
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is a one page estimate of costs and expenses for both parties
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the composite closing statement consists of five sections
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information
proations expenses summary |
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information includes:
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the purchase price, binder deposit (good faith deposit) and mortgage amounts
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prorations
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includes expenses and or reimbursements on pro-rata basis of the total expense. property taxes, mortgage interest, rents, and insurance are commoly prorated items.
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expenses
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the charges for both the buyer and the seller that generally appear only as a debit to one party.
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summary
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total debits and credits the balance due to the seller and from the buyer and a grand total.
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brokers statement
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also knows as a cash reconciliation statement shows receipts in one column and disbrusements in the other. column should balance
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