A Virginia real estate salesperson is explaining closing costs to a first-time buyer purchasing a $325,000 home with a $260,000 deed of trust loan. The salesperson correctly explains that in Virginia, the recordation tax on the deed of trust is calculated based on which amount?
Correct Answer
D) The amount of the obligation secured by the deed of trust, which is $260,000
Under Va. Code § 58.1-803, the recordation tax on a deed of trust (or mortgage) in Virginia is imposed on the amount of the obligation secured — that is, the loan amount. In this scenario, the deed of trust secures a $260,000 obligation, so the recordation tax is calculated on $260,000, not the purchase price or any other figure.
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Related Concepts
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
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