A Florida closing occurs on August 1. Use a 360-day year, 30-day months, assume property taxes are paid in arrears, and assign the day of closing to the buyer. If annual taxes are estimated at $3,240, what buyer credit corresponds to the seller's accrued tax debit?
Correct Answer
C) $1,890
Using a 360-day year with 30-day months and taxes paid in arrears, the seller owes taxes accrued from January 1 through July 31 (day of closing goes to buyer). That is 7 full months × 30 days = 210 days. Daily tax = $3,240 ÷ 360 = $9.00. Seller's debit / buyer's credit = 210 × $9.00 = $1,890.
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Related Topics & Key Terms
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Related Concepts
Converting a percentage to a decimal involves dividing the percentage value by 100.
In real estate, property value can be estimated by dividing the Net Operating Income (NOI) by the Capitalization Rate (Cap Rate).
Proration is the process of dividing expenses or income between the buyer and seller at the closing of a real estate transaction. This ensures each party pays or receives only their fair share based on the period of ownership.
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- → In Florida, who typically pays for owner's title insurance?
- → In Florida, who typically selects the closing agent?
- → A Florida buyer's side of the closing statement shows note documentary stamp tax of $875, nonrecurring intangible tax of $500, lender charges of $1,200, and recording charges of $95. What is the buyer's total for those stated items?
- → A Florida buyer agrees by contract to pay a survey of $575, an inspection of $350, an appraisal of $650, and prepaid interest of $635. What is the buyer's total for these agreed costs?
- → In Florida real estate transactions, all of the following are typically paid by the buyer at closing EXCEPT:
- → A first-time homebuyer in Jacksonville is concerned about closing costs on their $195,000 home purchase. Their lender has provided a Loan Estimate showing various fees. Under Florida law and federal regulations, which statement about the lender's fee disclosure is most accurate?
- → Which statement best describes Florida's rule on state-imposed closing charges versus negotiable costs?
- → Scenario Harbor Manual raises this Florida point. A Florida buyer agrees by contract to pay a survey of $500, an inspection of $500, an appraisal of $575, and prepaid interest of $520. What is the buyer's total for these agreed costs?
- → A buyer in Orange County is purchasing a home for $295,000 with a conventional loan of $236,000. The lender requires: 1% origination fee, 0.5% discount points, $450 appraisal, $35 credit report, and $95 flood certification. The title company charges $1,100 for owner's title insurance and $650 for lender's title insurance. The buyer will also pay $375 for a home inspection. What is the buyer's total closing costs for these items?
- → A buyer in Palm Beach County is purchasing a waterfront home for $850,000 with a jumbo loan of $650,000. The lender charges 1.5% origination fee, 0.75% discount points, and a $1,200 underwriting fee. The documentary stamp tax on the deed is $3.00 per $1,000, and intangible tax on the mortgage is $2.00 per $1,000. If the buyer pays all lender fees and intangible tax, while the seller pays deed stamps, what is the buyer's total cost for these items?
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Previous Question
A Florida closing occurs on February 1 in a nonleap year. Use a 365-day year, assume taxes are paid in arrears, and assign the day of closing to the buyer. If the annual tax estimate is $2,880, what is the seller's tax debit?
Next Question
Which answer most accurately states the Florida rule for property-tax prorations in a state where taxes are paid in arrears?