Answer Happy

Using Excel (no handwritten forms) fill out the settlement
statement form for the transaction described below. The various
closing costs will be allocated between the parties in the
customary way unless otherwise noted. Use a 360-day year and 30-day
month for your prorations. Round dollar amounts to four decimal
places for each step in your calculations. (Digits from 1 through 4
should be rounded down; digits from 5 through 9 should be rounded
up.) DO NOT change anything else in the worksheet. DO NOT fiil in
any white cells. The gray cells require formulas, and the yellow
cells require numbers provided in the case.
The house at 314 Baker Street, in Los Angeles County, sells on
January 28 for $575,000. The
offer that the seller accepts is accompanied by a $10,000 good
faith deposit. The purchase
agreement calls for the buyer to make a 10% down payment and
obtain an 80%, 30-year
conventional loan with an annual interest rate not to exceed
6½%.
The seller agrees to accept a five-year straight note secured by
a deed of trust for the balance of the purchase price; the interest
rate on this seller second will be 8%. The seller will also pay up
to $4,000 toward any discount points charged by the buyer’s lender.
The closing is to take place on March 14.
The buyer obtains the necessary loan commitment from Clearwater
Bank. The appraised value
of the property is $580,000. The terms of the commitment include
an 80% loan for 30 years
at 6½% annual interest, a 1% origination fee, and two discount
points. (Remember that the
seller has agreed to pay for a portion of the discount
points.)
The appraisal fee is $400, the credit report costs $45, and the
bank is charging a $200 document preparation fee. Prepaid interest
on the buyer’s loan will also have to be paid at closing, to cover
interest accruing from the closing date through the end of the
month.
At closing, Clearwater Bank will require a reserve account
deposit of $742.20, which is enough
to cover three months’ worth of property taxes and homeowner’s
insurance. The first payment
on the Clearwater loan will be due on May 1.
The buyer is purchasing a three-year homeowner’s insurance
policy for $990, with the first
year’s premium ($330) to be prepaid at closing; that will be
handled through escrow. This year’s
property taxes are $2,640. The seller has paid the first
installment, but not the second.
Liens against the property that the seller will pay off at
closing include a first deed of trust that
will have a balance of $398,571.47 after the March 1 payment is
made, and a home equity
loan that will have a balance of $13,425.35 after the March 1
payment is made.
The first lienholder instructs the escrow officer to collect
prorated interest, if any, equal to $48.21 per day. The home equity
lender advises the escrow officer that $3.14 in interest per day
will be due on the home improvement loan. Interest on both loans
will be charged up to and including the day of closing. The balance
in the seller’s reserve account for the first loan, $251.50, will
be refunded at closing.
The 6% brokerage commission is to be shared 50/50 between the
listing broker and the
selling broker; the documentary transfer tax is 55 cents per
$500 of value; the premium for
the owner’s title insurance policy is $1,080; the premium for
the lender’s title policy is $365;
the pest inspection fee is $230, and the buyer has agreed to pay
that; and the escrow fee, to
be divided evenly between the parties, is $600. The buyer’s
recording costs will be $35; the
seller’s recording costs will be $19.
CAN I PLEASE GET FORMULAS FOR THE ENTRIES THAT ARE quoted as
"need this" . NUMBERS DO NOT HELP, I NEED THE FORMULAS AS WELL.
thanks