REP 6 - Completion Accounts in Property Transactions

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Questions and Answers

What is the primary purpose of a completion account?

To inform the purchaser of the amount payable on completion (correct)

To calculate future earnings from property

To establish the market value of the property

To assess the vendor's property tax obligations

Which type of completion account is used to determine the amount payable by the purchaser to finance their purchase?

Vendor solicitors to purchaser solicitors

Vendor solicitors to the vendor

Purchaser’s mortgage lender to the purchaser

Purchaser solicitors to the purchasers (correct)

What information is NOT required to create a completion account?

The completion date

The amount already paid by the purchaser

The sale price

The property’s current market trend (correct)

In the example, what is the sale price of the condominium property?

$1 million Signup and view all the answers

What is the total amount paid so far by the purchaser in the example for option and stakeholder money?

$45,000 Signup and view all the answers

What is the monthly property tax amount mentioned in the example?

$200 Signup and view all the answers

Which date range is given for the rental period in the example?

August 1st to August 31st Signup and view all the answers

What is the total payment the purchaser has to make upon completion?

$948,258.06 Signup and view all the answers

How much was paid in maintenance charges per month?

$150 Signup and view all the answers

What amount does the vendor need to transfer to the purchaser as a rental deposit?

$2,000 Signup and view all the answers

For how many days from 19th August to the end of August is the rental proceeds apportioned?

13 Signup and view all the answers

How much does the purchaser owe to the bank?

$300,000 Signup and view all the answers

What is the main factor used to calculate the refund for the rental proceeds?

31 Signup and view all the answers

How much is the option money paid by the purchaser?

$10,000 Signup and view all the answers

What refund amount is calculated for maintenance from 19th August to 30th September?

$838.71 Signup and view all the answers

What is the sale price listed for the property?

$1,000,000 Signup and view all the answers

What is the total amount paid by the purchaser that goes directly to the vendor?

$27,500 Signup and view all the answers

Which of the following components does not receive part of the vendor's sale proceeds?

The purchaser's loan Signup and view all the answers

How much of the vendor's loan balance is allocated to the vendor's bank?

$50,000 Signup and view all the answers

What is required for the vendor solicitors to process the payments from the conveyancing account?

A statutory declaration authorizing payments Signup and view all the answers

Once the payout form is filed in the EPI system by the vendor solicitors, what is the next step?

The bank issues a check for the vendors to collect. Signup and view all the answers

How is the property tax calculated for the month of August?

Divide the factor by 31 days, then multiply by 13 days. Signup and view all the answers

What is the total amount to be paid to the vendor after deducting the vendor's debts?

$48,258.06. Signup and view all the answers

What additional calculations are needed for property tax if the month has 29 days?

Divide the factor by 29 days. Signup and view all the answers

What cashiers' orders does the purchaser need to prepare for the vendor's debts?

Three orders for $600,000, $300,000, and the remainder. Signup and view all the answers

What additional information is required when preparing the vendor's account for legal completion?

Commission paid to the agent and legal fees. Signup and view all the answers

During property tax calculation, how is the amount for September handled?

It adds the factor calculated for August. Signup and view all the answers

How does the presence of a month with less than 31 days, like February, affect calculation procedures?

Use a different factor for February based on available days. Signup and view all the answers

Why might a vendor instruct their solicitor to deduct commission and legal fees from the sale proceeds?

To avoid administrative tasks related to payments. Signup and view all the answers

In computing refunds, which days are considered for maintenance?

August and September only. Signup and view all the answers

If the total figure reached is $948,250.06, what does this amount represent?

Total amount due from the purchaser. Signup and view all the answers

What amount is added to the vendor's completion account?

$40,000 Signup and view all the answers

How much does the vendor owe to the bank?

$300,000 Signup and view all the answers

After all deductions, how much cash does the vendor ultimately receive?

$75,758.06 Signup and view all the answers

From which source does the vendor get the shortfall of $27,500?

Vendor solicitors account Signup and view all the answers

What is the total deduction amount the vendor must pay?

$912,500 Signup and view all the answers

Which of the following is NOT included in the vendor's expenses?

Property tax refund Signup and view all the answers

How much does the vendor pay to his agent?

$10,000 Signup and view all the answers

What is the initial completion account amount before adding the stakeholders' money?

$948,000 Signup and view all the answers

To which entity does the vendor pay $2,500?

Lawyer Signup and view all the answers

What is the total amount deducted from the vendor's account after all expenses?

$912,500 Signup and view all the answers

Study Notes

Completion Accounts

Completion accounts are used to calculate amounts payable on property transactions
Three types of completion accounts exist:
- Vendor solicitors to purchaser solicitors: Determines the amount the purchaser owes the vendor
- Vendor solicitors to vendor: Determines the vendor's final balance
- Purchaser solicitors to purchaser: Determines the purchaser's financing needs

Completion Account Details

Completion date: Crucial for calculations
Sale price: The total price of the property
Payments made: Amount paid by the purchaser so far (option money and deposit)
Rental payment: Monthly rental amount and period
Property tax: Amounts paid, how long paid for and monthly payment
Maintenance charges: Monthly payment and period
CPF balance: Vendor's CPF balance
Bank loan: Vendor's bank loan amount

Completion Account Calculations

Example: A 1millionpropertysale,with1 million property sale, with 1millionpropertysale,with10,000 option money and 40,000stakeholdermoneypaid.Monthlyrentalis40,000 stakeholder money paid. Monthly rental is 40,000stakeholdermoneypaid.Monthlyrentalis2,000 and is due August 1-31. Property tax is 200permonthandmaintenance200 per month and maintenance 200permonthandmaintenance150 per month. Vendor owes 600,000toCPFand600,000 to CPF and 600,000toCPFand300,000 to a bank.
Account amounts are calculated based on dates and factors to determine amounts due
Rental and other payments are allocated over specific periods to the vendor or purchaser depending on when it was due
Amounts are deducted from the sale price to calculate the final balance due

Additional Account Information

Vendor solicitors to vendor: Additional information needed includes vendor commission and legal fees
Purchaser solicitors to purchaser: Information needed includes purchaser's legal fees and CPF account balance; mortgage loan amounts

Payment Methods

Cashier's orders are used for payment

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Description

This quiz covers the details and calculations involved in completion accounts for property transactions. It discusses the types of completion accounts, key components such as sale price and payments, and provides examples to illustrate the calculations. Test your understanding of how these accounts determine the financial aspects of buying and selling property.

REP 6 - Completion Accounts in Property Transactions

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Podcast

Questions and Answers

What is the primary purpose of a completion account?

Which type of completion account is used to determine the amount payable by the purchaser to finance their purchase?

What information is NOT required to create a completion account?

In the example, what is the sale price of the condominium property?

What is the total amount paid so far by the purchaser in the example for option and stakeholder money?

What is the monthly property tax amount mentioned in the example?

Which date range is given for the rental period in the example?

What is the total payment the purchaser has to make upon completion?

How much was paid in maintenance charges per month?

What amount does the vendor need to transfer to the purchaser as a rental deposit?

For how many days from 19th August to the end of August is the rental proceeds apportioned?

How much does the purchaser owe to the bank?

What is the main factor used to calculate the refund for the rental proceeds?

How much is the option money paid by the purchaser?

What refund amount is calculated for maintenance from 19th August to 30th September?

What is the sale price listed for the property?

What is the total amount paid by the purchaser that goes directly to the vendor?

Which of the following components does not receive part of the vendor's sale proceeds?

How much of the vendor's loan balance is allocated to the vendor's bank?

What is required for the vendor solicitors to process the payments from the conveyancing account?

Once the payout form is filed in the EPI system by the vendor solicitors, what is the next step?

How is the property tax calculated for the month of August?

What is the total amount to be paid to the vendor after deducting the vendor's debts?

What additional calculations are needed for property tax if the month has 29 days?

What cashiers' orders does the purchaser need to prepare for the vendor's debts?

What additional information is required when preparing the vendor's account for legal completion?

During property tax calculation, how is the amount for September handled?

How does the presence of a month with less than 31 days, like February, affect calculation procedures?

Why might a vendor instruct their solicitor to deduct commission and legal fees from the sale proceeds?

In computing refunds, which days are considered for maintenance?

If the total figure reached is $948,250.06, what does this amount represent?

What amount is added to the vendor's completion account?

How much does the vendor owe to the bank?

After all deductions, how much cash does the vendor ultimately receive?

From which source does the vendor get the shortfall of $27,500?

What is the total deduction amount the vendor must pay?

Which of the following is NOT included in the vendor's expenses?

How much does the vendor pay to his agent?

What is the initial completion account amount before adding the stakeholders' money?

To which entity does the vendor pay $2,500?

What is the total amount deducted from the vendor's account after all expenses?

Study Notes

Completion Accounts

Completion Account Details

Completion Account Calculations

Additional Account Information

Payment Methods

Studying That Suits You

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