Utah Real Estate Broker Exam — All Questions

On a closing (settlement) statement, an item shown as a credit to the seller generally represents:

• a.Money the seller owes the buyer
• b.An amount that increases what the seller receives, such as the sale price or a prepaid cost the seller already covered✓
• c.A charge the seller must pay at closing
• d.The buyer's loan origination fee

A credit to the seller increases the amount the seller receives at closing; the sale price is the seller's largest credit, and prepaid items the seller already covered can also be credited to the seller. A debit, by contrast, is a charge that reduces what the seller nets. Utah brokers should understand the statement well enough to explain it and catch errors.

The purpose of prorating property taxes on a Utah closing statement is to:

• a.Charge the buyer for the entire year regardless of the closing date
• b.Eliminate property taxes for the year of sale
• c.Divide the tax fairly between buyer and seller based on the closing date✓
• d.Transfer the tax bill to the brokerage

Prorations divide ongoing costs such as property taxes fairly between buyer and seller as of the closing date, so each pays for the period they own the property. Amounts a seller prepaid may be credited to the seller; amounts owed but unpaid may be credited to the buyer. Being able to compute a proration and verify it on the settlement statement is a practical broker skill.

A Utah broker's responsibility regarding the settlement statement includes:

• a.Reviewing that the figures match the contract and that client funds, including any trust-account deposit, are correctly reflected✓
• b.Guaranteeing the buyer's loan approval
• c.Setting the property tax rate
• d.Preparing the buyer's income tax return

A broker's supervisory role includes reviewing that settlement figures match the contract terms and that client funds, including any deposit held in the broker's trust account, are correctly reflected. Catching a mistake before closing protects the parties and the firm and supports the broker's duty to deal honestly and avoid misrepresenting transaction costs.