Term
| RESPA – The Real Estate Settlement and Procedures Act |
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Definition
| a federal disclosure act that requires lender to give borrowers a good-faith estimate of the settlement costs and an information booklet. Also requires use of a HUD-1 Settlement Statement at closing and prohibits payment of any unearned fees in connection with a real estate transaction. |
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Term
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Definition
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Term
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Definition
| a form used by the settlement agent (also called the closing agent) to itemize all charges imposed upon a borrower and seller for a real estate transaction. It gives each party a complete list of their incoming and outgoing funds. |
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Term
| What is a settlement statement |
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Definition
| a document that prepared by broker, escrow, or lender, giving a complete breakdown of costs involved in a real estate sale |
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Term
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Definition
| monies that do not show up in the contract. These may be paid to someone who is not a party to the contract and thus may be a violation of license law and/or RESPA. |
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Term
| Who is responsible for proper closing of a transaction |
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Definition
| broker and employing broker |
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Term
| What rule covers who is responsible for a proper closing |
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Definition
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Term
| What is FIRPTA - Foreign Investment in Real Property Tax |
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Definition
| A federal law designed to subject nonresident aliens and foreign corporations to U.S. Income tax upon their gain from the disposition (sale) of real property in the U.S. 10% of the sales price must be withheld by the purchaser from the gross proceeds of the sale. If requested to do so, the IRS can determine the seller's maximum tax liability and that amount would be withheld. Withholding is not required if the property is to be used as a residence by the purchaser and the selling price is less than $300,000. |
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Term
| What amount of the sale price is withheld in sales to Colorado Non-residents |
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Definition
| The amount of the tax that is withheld is the smaller of either 2% of the sale price or the net proceeds from the sale. |
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Term
| What is a title commitment |
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Definition
| an offer to issue a title insurance policy. It describes the various conditions, exclusions and exceptions that will apply on that particular policy. |
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Term
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Definition
| an insurance policy that indemnifies the owner against defects in the title. Title insurance protects the policyholder against loss from something that has already happened such as a forged deed. In order for a title company to make good any losses arising through defects in title to real estate, they very carefully research the public records to identify all liens and encumbrances attached to the specific property. The documents become part of the title commitment |
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Term
| Who pays for title insurance |
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Definition
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Term
| What are Title insurance endorsements |
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Definition
| attachments to the title policy and provide additional protection regarding specific circumstances, such as special assessment liens or environmental protection. The Lender almost always requests them when a new loan is issued making the endorsements a buyer charge on settlement |
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Term
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Definition
| document that actually transfers title of the property from the Seller to the Buyer |
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Term
| Who pays for preparation of the warranty deed |
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Definition
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Term
| Who pays for notarizing the warranty deed |
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Definition
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Term
| Who pays for recording the warranty deed |
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Definition
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Term
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Definition
| document that specifies the terms of the loan the Buyer obtains. |
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Term
| Who pays for recording the deed of trust |
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Definition
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Term
| What is a documentary fee |
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Definition
| A transfer fee charged by the State of Colorado |
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Term
| How is the documentary fee calculated |
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Definition
| $0.01 per $100 of transfer price |
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Term
| What is a certificate of taxes due |
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Definition
| a document certified by the county treasurer in the county where the property is situated that states the amount of taxes and whether they have been paid. |
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Term
| Who pays for the certificate of taxes due |
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Definition
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Term
| Who pay taxes on the day of closing in Colorado |
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Definition
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Term
| What is a tax or insurance reserve |
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Definition
| an escrow or trust account held by the lender for the purpose of accumulating the funds to pay property taxes or insurance when they are due |
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Term
| Who pays for a tax service fee |
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Definition
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Term
| Who pays for loan charges |
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Definition
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Term
| What is private mortgage insurance |
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Definition
| insurance on the portion of the loan that is greater than 80% of the LTV |
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Term
| What are considered good funds |
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Definition
| cash, cashier's check, wired funds, deposited checks that have cleared the bank, or any other funds that are backed for immediate withdrawal |
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Term
| What is not considered good funds |
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Definition
| personal checks written at closing |
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Term
| What is the Real Property Transfer Declaration |
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Definition
| The Real Property Transfer Declaration provides essential information to the county assessor to help ensure fair and uniform assessments for all property for property tax purposes. All recorded documents (deeds) that are submitted to the county clerk and recorder must be accompanied by the TD-1000 form. This form documents personal property sold with the real property, as well as the condition and value. This might include carpeting and appliances. Financing obligations are also covered. |
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Term
| What commission rule requires a buyers earnest money be deposited in a trust account |
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Definition
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Term
| Which column are funds received placed in |
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Definition
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Term
| What are typical debits in the closing worksheet |
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Definition
| earnest money, loan proceeds from the buyer's lender, balance due from buyer at the time of closing |
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Term
| Who signs the warranty deed |
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Definition
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Term
| 7.Special taxes collected from out-of-state sellers are payable to who |
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Definition
| Colorado Department of Revenue |
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Term
| Who is charged for the release of a deed of trust |
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Definition
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Term
| On a settlement statement worksheet, the party that owes is debited or credited |
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Definition
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Term
| On the settlement worksheet, $ that is received by the broker is debited or credited |
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Definition
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Term
| Can seller and buyer both be debited for a charge |
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Definition
| Yes, usually if paid in arrears |
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Term
| How many decimals should proration's be carried out to |
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Definition
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