Question

A married couple is purchasing a home for $198,000 and gave the broker a $10,000 earnest money deposit. The buyers will finance the purchase with a new 80% loan-to-value mortgage loan.

The closing date is March 18, with the closing day charged to the buyer. Homeowners association dues are $325 monthly and were paid in advance by the seller. Property taxes are $2,416. Prorations should be made using the 365-day method.

The sellers will pay the 6% brokerage fee, the documentary stamp tax on the deed, and title insurance of $1,789. The buyers will pay the appropriate state taxes on the note and mortgage, $72 in recording fees, and for a survey costing of $475.

How is the purchase price shown on the Closing Disclosure?

A)$198,000 debit seller, credit buyer; page 3

B)$198,000 credit buyer only; page 3

C)$198,000 debit buyer only; page 3

D)$198,000 credit seller, debit buyer; page 3

Answer 1

Answer :- Option D). $198,000 credit seller, debit buyer; page 3.

Explanation :- Seller account will be credited and buyer's account will be debited by $ 198,000 in the given question.

Note :- Earnest money deposit will not be included in purchase price on closing disclosure in the given question.