At closing, the purchase price of $350,000 appears on the buyer's side of the settlement statement. Is this amount a debit or a credit to the buyer?
Correct Answer
B) Debit, because it is the amount the buyer must pay
The purchase price is a debit to the buyer because it represents the amount the buyer is obligated to pay. Other credits (loan proceeds, earnest money) reduce this obligation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Escrow is an arrangement in which a neutral third party holds documents, funds, or other items on behalf of the buyer and seller until all conditions of the transaction are met.
A general warranty deed provides the greatest protection to the grantee by guaranteeing that the grantor holds clear title and has the right to sell the property. It includes covenants that protect against all defects in title, even those arising before the grantor owned the property.
Intestate succession is the legal process by which a deceased person's property is distributed according to state law when they die without a valid will. State statutes determine the order of inheritance.
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- → A title company examines the public records and finds that all deeds in the property's history are properly recorded and connect in an unbroken sequence. This unbroken sequence of ownership is called the
- → In a covered purchase transaction, the borrower receives a final form showing the loan terms, cash to close, and settlement charges shortly before consummation. What form is this?
- → Under TRID rules, the lender must deliver the Closing Disclosure to the borrower at least how many business days before loan consummation?
- → On the seller's settlement statement, the purchase price of $400,000 appears as what?
- → Along with the signed offer, Quinn Brooks delivers a check to demonstrate serious intent to complete the transaction if the offer is accepted. What is this deposit called?
- → Monthly rent of $2,500 has been collected in advance for a 30-day month. Closing occurs on the 14th day of the month, and the seller owns the day of closing. What rent amount is credited to the seller?
- → In an escrow closing, the escrow agent discovers that the seller has not yet provided the signed deed. What should the escrow agent do?
- → A buyer purchases a property for $420,000 with a loan amount of $378,000. Buyer closing costs are $7,000, and the earnest money deposit already paid is $4,000. Ignoring prorations, how much additional cash must the buyer bring to closing?
- → All of the following are closing or settlement concepts EXCEPT
- → A county charges $35 to record the first page of a deed and $7 for each additional page. If a deed is 4 pages long, what is the recording fee?
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