Closings & Settlement (11 items; 15%)

Question 1

The _________ is responsible for reporting change of ownership of water wells to the Colorado ____________ of __________ Resources.

Answer 1

buyer

Division of Water

Question 2

Colorado charges a documentary fee (___% of $_____) when transferring property. This fee lets the county know the exact price of the _______ _________.

Answer 2

(1% of $100) transferred property.

Question 3

The CREDIT columns for the seller and buyer record ________ in ________

OR amounts ________ to that party to the transaction.

The sales price of a property is a _________ (debit/credit) on the ___________ (buyer’s/seller’s) ledger.

Answer 3

INcreases in value; owed

credit;

seller’s

Question 4

The DEBIT columns for the seller and buyer record _________ in ________

OR amounts ________ to that party to the transaction.

The sales price is a ______ (debit/credit) to the ______ (buyer/seller).

Answer 4

DEcreases in value;

owed

DEBIT to the BUYER.

Question 5

The credit and debit columns for the closing entity (sometimes the broker) reflect amounts _________ OR _____ on behalf of the seller and buyer.

The entries in these columns are opposite to the entries in the __________ and _________ ledgers.

Answer 5

collected OR paid;

seller’s and buyer’s

Question 6

The amount paid TO the Seller at the end of the calculations is a ___________ to the seller because the seller _______ the funds at closing.

It is a ____________ to the closing entity.

Answer 6

DEBIT, receives

CREDIT

Question 7

The amount paid BY the Buyer at the end of the calculations is a ______ (debit/credit) to the buyer because he is _________ the funds at closing. It is a __________ (debit/credit) to the closing entity.

Answer 7

CREDIT, paying DEBIT

Question 8

Earnest money is a ______ (debit/credit) to the buyer and a __________ (debit/credit) to the closing entity.

Answer 8

CREDIT

DEBIT

Question 9

Most of the SMALL FEES at closing, including:

• recording the warranty deed
• deeds of trust
• documentary fee
• tax certificate fee
• loan service fees
• credit reports

…are paid for by the _______ ( ______ [debit/credit] buyer and _____ [debit/credit] closing entity.)

Answer 9

buyer

(debit; credit)

Question 10

The release of a recorded deed of ______ is paid for by the ________ since it is related to closing out the prior ___________.

(_______ [debit/credit] seller and _______ [debit/credit] closing entity).

Answer 10

trust; seller; mortgage

(debit; credit)

Question 11

The buyer assuming a loan assumes:

• The remaining _______ ______ of the note.
• Any ________ ________ such as tax and insurance reserves.
• _____-_______ insurance (if chosen by the buyer)
• The year’s _____ liability for the previous year (If lender ________ and closing is prior to _______.)

Answer 11

• principal balance
• reserve balance
• Home-owners
• TAX (escrowed; April 30th)