National Real Estate Exam Quiz: Calculate Closing And Prorations

20 questions · exam conditions

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Calculate Closing And ProrationsQuestion 1 of 20

A home inspection costs $485 and an appraisal costs $650. Survey costs are $850. These are all buyer expenses. What is the total for these professional services?

$1,985 in total professional service costs

$1,500 in total professional service costs

$1,335 in total professional service costs

$1,135 in total professional service costs

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National Real Estate Exam Quiz

National Real Estate Exam Quiz: Calculate Closing And Prorations

Practice Calculate Closing And Prorations in National Real Estate Exam with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Calculate Closing And Prorations, giving you a quick way to practice the rules, question types, and explanations that matter most for National Real Estate Exam.

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

A home inspection costs $485 and an appraisal costs $650. Survey costs are $850. These are all buyer expenses. What is the total for these professional services?

$1,985 in total professional service costs (correct answer)
$1,500 in total professional service costs
$1,335 in total professional service costs
$1,135 in total professional service costs

Explanation: Total professional services = Home inspection (

485) + Appraisal (

650) + Survey ($850) = $1,985. These are typical buyer expenses for professional services required during the purchase process.

Question 2

Recording fees are $35 for the deed and $45 for the mortgage. Title insurance costs $1,850. Attorney fees are $750. What are the total title and recording costs?

$2,680 in title and recording expenses (correct answer)
$2,645 in title and recording expenses
$2,630 in title and recording expenses
$1,930 in title and recording expenses

Explanation: Total costs = Recording fees ($35 +

45) + Title insurance (

1,850) + Attorney fees ($750) = $80 + $1,850 + $750 = $2,680. These are typical closing costs related to title and recording services.

Question 3

A buyer is purchasing a property for $485,000 with a 20% down payment. The lender requires a loan origination fee of 1.5% of the loan amount. What is the total loan origination fee?

$5,820 paid by the buyer at closing (correct answer)
$7,275 paid by the buyer at closing
$9,700 paid by the buyer at closing
$5,820 paid by the seller at closing

Explanation: Loan amount = $485,000 × 80% = $388,000. Loan origination fee = $388,000 × 1.5% = $5,820. This is typically a buyer cost at closing, not seller cost.

Question 4

A property closes on March 15. The seller has prepaid property taxes of $3,600 for the entire year. Using the 365-day method, what is the proration amount and how is it handled on the settlement statement?

$2,726.03 credit to seller and debit to buyer (correct answer)
$873.97 credit to seller and debit to buyer
$2,726.03 credit to buyer and debit to seller
$873.97 credit to buyer and debit to seller

Explanation: Daily rate = $3,600 ÷ 365 = $9.86. From March 16 to December 31 = 291 days. Proration = $9.86 × 291 = $2,726.03. Since seller prepaid taxes for time they won't own the property, they receive a credit and buyer receives a debit.

Question 5

A buyer obtains an 80% loan on a $525,000 purchase. The lender charges 2.5 discount points. How much will the buyer pay for discount points at closing?

$10,500 as a one-time financing cost (correct answer)
$13,125 as a one-time financing cost
$5,250 as a one-time financing cost
$15,750 as a one-time financing cost

Explanation: Loan amount = $525,000 × 80% = $420,000. One point = 1% of loan amount. 2.5 points = $420,000 × 2.5% = $10,500. Discount points are paid by the buyer at closing to reduce the interest rate.

Question 6

The seller's mortgage payoff is $198,750, and they owe $2,340 in property taxes. Real estate commission is $18,600. If the sales price is $310,000, what is the seller's net proceeds?

$90,310 net proceeds to seller after expenses (correct answer)
$108,910 net proceeds to seller after expenses
$71,710 net proceeds to seller after expenses
$129,550 net proceeds to seller after expenses

Explanation: Net proceeds = Sales price - Mortgage payoff - Taxes - Commission = $310,000 - $198,750 - $2,340 - $18,600 = $90,310. This represents what the seller receives after all major expenses are deducted.

Question 7

A buyer's total cash needed at closing is $127,850. This includes a down payment of $95,000 and loan costs of $18,500. What amount represents other closing costs?

$14,350 in additional closing expenses (correct answer)
$32,850 in additional closing expenses
$45,500 in additional closing expenses
$9,850 in additional closing expenses

Explanation: Other closing costs = Total cash needed - Down payment - Loan costs = $127,850 - $95,000 - $18,500 = $14,350. This represents the remaining closing costs beyond the down payment and loan-related expenses.

Question 8

The seller paid a $1,200 annual homeowner's insurance premium on July 1. The property closes on October 15. Using the 365-day method, what is the insurance proration?

$630.14 credit to seller and debit to buyer
$569.86 credit to seller and debit to buyer (correct answer)
$630.14 credit to buyer and debit to seller
$569.86 credit to buyer and debit to seller

Explanation: Daily rate = $1,200 ÷ 365 = $3.29. From October 16 to June 30 = 258 days remaining. Unused premium = $3.29 × 258 = $569.86. Seller gets credit for unused premium, buyer gets debit for coverage they'll receive.

Question 9

The buyer's earnest money deposit of $15,000 is being credited at closing. Additional cash needed from buyer is $68,750. What is the buyer's total cash investment at closing?

$83,750 representing total buyer cash at closing (correct answer)
$53,750 representing total buyer cash at closing
$68,750 representing total buyer cash at closing
$98,750 representing total buyer cash at closing

Explanation: Total cash investment = Earnest money deposit + Additional cash needed = $15,000 + $68,750 = $83,750. The earnest money is credited toward the purchase, but it's still part of the buyer's total cash investment in the property.

Question 10

The seller agrees to pay 3% of the purchase price toward buyer's closing costs. On a $445,000 sale, how much will the seller contribute?

$13,350 seller contribution toward buyer costs (correct answer)
$14,825 seller contribution toward buyer costs
$11,125 seller contribution toward buyer costs
$16,675 seller contribution toward buyer costs

Explanation: Seller contribution = $445,000 × 3% = $13,350. This represents a seller concession to help the buyer with closing costs, appearing as a credit to buyer and debit to seller on the settlement statement.

Question 11

Water and sewer charges of $180 are billed quarterly and due at the end of each quarter. The property closes on the second month of the current quarter. What proration is needed?

$120 credit to buyer and debit to seller (correct answer)
$60 credit to buyer and debit to seller
$120 credit to seller and debit to buyer
$60 credit to seller and debit to buyer

Explanation: Monthly charge = $180 ÷ 3 = $60. Seller owes for 2 months of usage = $60 × 2 = $120. Since the bill isn't paid yet, seller owes buyer this amount, creating a credit to buyer and debit to seller.

Question 12

The buyer obtains a $380,000 loan and must establish a tax escrow account. Annual property taxes are $4,560. The lender requires 3 months reserve. What escrow amount is collected?

$1,140 for property tax escrow establishment (correct answer)
$4,560 for property tax escrow establishment
$380 for property tax escrow establishment
$760 for property tax escrow establishment

Explanation: Monthly tax amount = $4,560 ÷ 12 = $380. Escrow reserve = 3 months × $380 = $1,140. This amount is collected at closing to establish the escrow account for future property tax payments by the lender.

Question 13

Annual HOA fees of $2,400 were paid by the seller on January 1. The property closes on May 20. Using the 365-day method, what is the HOA fee proration?

$1,368.49 credit to seller and debit to buyer (correct answer)
$1,031.51 credit to seller and debit to buyer
$1,368.49 credit to buyer and debit to seller
$1,031.51 credit to buyer and debit to seller

Explanation: Daily HOA fee = $2,400 ÷ 365 = $6.58. Days remaining (May 21-Dec 31) = 225 days. Unused portion = $6.58 × 225 = $1,368.49. Seller gets credit for prepaid fees, buyer gets debit for benefits they'll receive.

Question 14

County taxes of $3,960 and city taxes of $1,440 are paid in arrears annually. The property closes on July 10. Using the 365-day method, what is the total tax proration?

$2,842.19 credit to buyer and debit to seller (correct answer)
$2,557.81 credit to buyer and debit to seller
$2,842.19 credit to seller and debit to buyer
$2,557.81 credit to seller and debit to buyer

Explanation: Total annual taxes = $3,960 + $1,440 = $5,400. Daily rate = $5,400 ÷ 365 = $14.79. Seller owes for 191 days (Jan 1 - July 10). Seller's portion = $14.79 × 191 = $2,842.19. Since taxes are paid in arrears, seller owes buyer this amount.

Question 15

The total commission on a $625,000 sale is 6%. The listing broker keeps 55% of the total commission. What amount does the listing broker receive?

$16,875 from the commission split
$20,625 from the commission split (correct answer)
$37,500 from the commission split
$18,750 from the commission split

Explanation: Total commission = $625,000 × 6% = $37,500. Listing broker's share = $37,500 × 55% = $20,625. This represents the listing broker's portion of the total commission.

Question 16

A seller's net proceeds after all closing costs and commissions total $387,500. If the total closing costs were $8,200 and the commission was $24,300, what was the sales price?

$420,000 total sales price (correct answer)
$355,300 total sales price
$371,300 total sales price
$403,700 total sales price

Explanation: Sales price = Net proceeds + Closing costs + Commission = $387,500 + $8,200 + $24,300 = $420,000. The net proceeds represent what the seller receives after all deductions from the sales price.

Question 17

Transfer tax is charged at $0.75 per $500 of sales price. What is the transfer tax on a $368,000 sale?

$552.00 paid at closing typically by seller (correct answer)
$276.00 paid at closing typically by seller
$1,104.00 paid at closing typically by seller
$736.00 paid at closing typically by seller

Explanation: Number of $500 increments = $368,000 ÷ $500 = 736 increments. Transfer tax = 736 × $0.75 = $552.00. Transfer taxes are typically paid by the seller at closing as a cost of transferring ownership.

Question 18

A property has an outstanding loan balance of $287,450. The payoff amount includes $1,245 in accrued interest and a $395 prepayment penalty. What is the total loan payoff?

$289,090 required to satisfy the existing mortgage (correct answer)
$288,695 required to satisfy the existing mortgage
$287,845 required to satisfy the existing mortgage
$286,205 required to satisfy the existing mortgage

Explanation: Total payoff = Principal balance + Accrued interest + Prepayment penalty = $287,450 + $1,245 + $395 = $289,090. This represents the complete amount needed to satisfy and release the existing mortgage lien.

Question 19

Hazard insurance escrow requires 2 months reserve. The annual premium is $1,440. What amount will be collected at closing for the escrow account?

$240 for insurance escrow reserves (correct answer)
$360 for insurance escrow reserves
$480 for insurance escrow reserves
$120 for insurance escrow reserves

Explanation: Monthly insurance cost = $1,440 ÷ 12 = $120. Reserve requirement = 2 months × $120 = $240. This amount is collected at closing to establish the escrow account for future insurance premium payments.

Question 20

A tenant's security deposit of $1,800 is being transferred to the buyer. How does this appear on the settlement statement?

$1,800 credit to seller and debit to buyer (correct answer)
$1,800 credit to buyer and debit to seller
$1,800 credit to both buyer and seller
$1,800 debit to both buyer and seller

Explanation: The seller receives credit because they're transferring cash (the security deposit) to the buyer. The buyer receives a debit because they're receiving the cash but also assuming the obligation to return it to the tenant when appropriate.