Arizona Real Estate License Practice Exam

Question: 1 / 1505

If a seller's closing statement displays more debits than credits, what does this signify?

Seller gets a refund

Seller has to pay money to close escrow

When a seller's closing statement shows more debits than credits, it indicates that the seller has incurred expenses that exceed any income or credits they have received in the transaction. In real estate transactions, debits represent amounts that the seller is responsible for paying, such as real estate commissions, unpaid property taxes, or other costs associated with the sale. Credits, on the other hand, might include proceeds from the sale or deposits received from the buyer.

If the debits outweigh the credits, this means that the seller will need to bring additional funds to close the escrow. The seller is therefore required to pay money to cover these excess charges, resulting in an out-of-pocket expense rather than receiving any money back or a refund. This aspect of transaction accounting is crucial for sellers to understand to prepare appropriately for their financial obligations at closing.

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Buyer gets a refund

Buyer has to pay money to close escrow

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