Question

Prior to the closing, the buyer has paid for the appraisal. This will be entered on the settlement statement as a .

1. POC
2. Single-entry debit to the buyer
3. Debit to the buyer; credit to the seller
4. Debit to the broker; credit to the buyer

Answer 1

The payment for an appraisal made by the buyer prior to closing is recorded as a POC (Paid Outside of Closing) on the settlement statement. This indicates it's a payment made directly and not included in the closing costs.

Step-by-step explanation:

When a buyer has paid for an appraisal prior to the closing of a home purchase, this expense is recorded on the settlement statement. The correct way to enter this payment is as a POC, which stands for Paid Outside of Closing. This designation means that the appraisal fee was paid directly by the buyer before the closing and is not included in the closing costs to be settled at the time of the closing meeting.

The concept of Escrow is related to the home buying process where Escrow accounts can be used for paying home insurance and property taxes, by collecting a portion of these anticipated expenses on a monthly basis so that the necessary amounts are available when needed.