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Multiple Choice
Which of the following would be considered a seller debit in the closing statement?
A
Earnest money deposit provided by the buyer
B
Loan amount assumed by the buyer
C
Real estate commission owed by the seller
D
Property taxes prepaid by the seller
Verified step by step guidance
1
Understand the concept of a seller debit in a closing statement: A seller debit refers to amounts that the seller owes or expenses that reduce the seller's proceeds from the sale of the property.
Analyze each option provided in the problem to determine whether it qualifies as a seller debit: Earnest money deposit provided by the buyer is not a seller debit because it is a payment made by the buyer to secure the transaction.
Evaluate the loan amount assumed by the buyer: This is not a seller debit because it represents a liability transferred to the buyer, reducing the buyer's cash payment rather than affecting the seller's proceeds.
Consider the real estate commission owed by the seller: This is a seller debit because it is an expense incurred by the seller for the services of the real estate agent, reducing the seller's net proceeds.
Review property taxes prepaid by the seller: Prepaid property taxes are not a seller debit because they represent an expense already paid by the seller, potentially resulting in a credit to the seller if the buyer reimburses them for the prepaid amount.