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Credits And Debits Explained For Real Estate Exam | Intro To The Dam/Dams Method To Proration
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- čas přidán 15. 08. 2024
- Welcome to the ultimate guide on mastering debits and credits in real estate transactions! In this video, real estate instructor, Maggie Relloso, clears up the complexities of debits and credits and introduces her newest method on solving proration questions, the DAM/DAMS Method, that’ll empower you to tackle those real estate exam questions with ease.
Maggie's DAMS method simplifies proration calculations, ensuring you're prepared for any scenario on your real estate exam.
00:00 - Intro
00:37 - Debits & Credits explained
01:34 - Rules You Need to Know
02:22 - Real Estate Exam Practice Question
03:02 - More about Debits/Credits
03:57 - Proration Question 1 (Rent Payment) - DAMS Method
04:24 - Proration Question 1 Explained
07:02 - DAM/DAMS Method Introduced
07:53 - Proration Question 2 (Annual Property Tax) - DAM Method
08:14 - Proration Question 2 Explained
10:10 - Proration Question 3 (Prepaid by Seller) - DAMS Method
10:43 - Proration Question 3 Explained
12:38 - Outro
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Need more help on prorations or on the math concepts you’ll see on your real estate exam? Check out my e-workbook that’ll have you feeling more confident and ready to tackle your exam here 👉 justcallmaggie.com/product/math-skills-for-real-estate-success-workbook-volume-1/
You are an amazing instructor, I wish that you had been my teacher for the semester of the pre-licensing. I've gotten most of my own information from your utubes and the book. Thank you for being available.
@@tuwanacrosby2712 you got this! Way to hustle for that info bc that’s how it’s going to be in this industry. Good job!
Passed today on my first try. Your videos made the math easy. The T diagram is king.
Way to go! Congratulations 🥳🥳🥳 I’m glad to hear the T-Method worked for you. Thank you for sharing the news!
MAGGIE!! I passed the GA exam!! God bless you and your videos ❤️❤️❤️🙏🏾🙏🏾
Great news!!! 👏👏👏 congratulations 🥳🥳🥳
Thank you!! Of all the videos I’ve watched this is the only one that’s made sense!! ☺️
@@islandtiki Thank you so much. I truly appreciate that. Best of luck to you 🤓🫶
Hi Maggie. I passed my FL exam yesterday. Your videos and the way in which you break down each one gave me so much more of an understanding that I felt really confident about many sections I was previously unsure about. Keep doing what you do. I've recommended your videos to my fellow classmates. Thank you!!Hopefully, I will get to meet you one day.
That is awesome!!! 👏 congratulations to you!!! 🥳 I would love to meet you too. Best of luck on your real estate journey and I’m here for you 🫶🤓
Thanks Maggie, I absolutely love your teaching, especially your bubbling excitement!!!!
I passed the Virginia Real Estate exam today-Big thanks to you 😊.
Wow!! Congratulations on passing your exam. 🥳🥳🥳 Thank you for your kind words and best wishes in your new career 🤓🫶
great video. easy and simple way of teaching
@@DizzySpider99 I appreciate that. Best of luck to you
You are a live saver thank you 🙏🏾
@@volvickattilus4666 glad to help 🤓🫶
I’m about to scarp up some money to have you tutor me because the way you break things down make so much sense. Thank you for these helpful videos. I’m hoping to pass my test this last time around.
Thank you. That would be great! Good luck doll.
You are the best❤
@@volvickattilus4666 that’s so nice. Thank you! Good luck to you. 🤓🫶
U r soo great teacher
Thank you, Sumeet. I appreciate you 🤓🫶
Thanks this helped a lot . Because I failed my first time . I am believing I will pass this next time.
Glad to hear. Best of luck 🤞
I love you Maggie. My (retake) exam is in 3 weeks.
Oh wow!!! Good luck. Keep me posted doll 🫶
So helpful!!!
So, why is it a debit to the buyer when you do the HOA, instead of a credit? I'm new at this completely. I have the computations, just need clarity on the reasoning for the difference on the rental situation and the HOA you did.
Good question! The buyer is debited because the seller paid in advance so they’re just getting their money back (credit) for the time they did not own the property, so the buyer will be debited that amount since that’s when they will own the property. Hope that makes sense.
I'm nervous about taking my VA exam Aug 8th. I just started watching your videos. I failed the first time. Any advice?
@@RobertRichardson-c9o best of luck to you!!!
Hello! I LOVE your videos! They have been very helpful! Would these proration questions be worked the same for the state of Indiana?
Hi. Thank you. Yes I believe so. It works like that for most states.
Bear w me because I’m still studying and learning.. I thought it would be a credit to the seller cuz the rule is if a seller prepays, it’s a credit for them. Since the seller prepaid the whole month, I was expecting it to be a credit back to the seller for 910 and debit to the buyer for 910. Ughhh. 🤦🏻♂️. My test is Thursday 😬
Think I’m just gonna take an L on this question part and focus on everything else for the exam. I’m too confused on who gets what. Idk how the last one is a credit to the seller but the others aren’t.
Yes. You are correct. If a seller prepays something, they will receive a credit for the portion they did not live in the property.
@@bigirish5449 the last one was a credit to seller because the seller had already prepaid.
$910 would be what the seller is able to keep. What’s left over is the buyer’s money.
I need some clarification on the second sample question addressing annual property taxes. At the beginning of the video, you said that HOA dues and Annual Property Taxes are exceptions to the rule, meaning you credit the seller and debit the buyer for same $ amount. Correct? But in sample question #2 dealing with property taxes, the answer is credit the buyer and debit the seller for same $ amount. I think my confusion lies in the concepts of PRE-PAID vs ARREARS. Can you clarify this please?
Prepaid and paying in arrears are like opposites. For example, prepaid means you pay at the beginning of the month for a service for that month. Paying in arrears is using the service the entire month then paying at the end of the month. So taxes are paid in arrears meaning, you live in your property all year and then at the end of the year you pay the property taxes for that year. As far as the HOA dues and the property taxes are concerned in the video, it will only be a credit to the seller and a debit to the buyer if the seller prepays those fees. Otherwise, it will be a debit to the seller and a credit to the buyer. Hopefully that helps. Let me know.
@@JustCallMaggie Thank you for the clarification, Maggie! 👍
@@lizbon6113 you’re welcome ☺️
watching your videos , Mariposa here..😂 😂
Love it!! 😘😘
Can we use the T method?
Not for proration. I would say to use the DAM/DAMS method as described in this video.
So what method do i use for this lol
A sale closes on February 12, with the seller having the day of closing. The buyer is assuming the seller's mortgage, which has an outstanding balance of $28,000 as of the closing date. The last mortgage payment was made on February 1. The annual interest rate is 7.75%, and interest is paid in arrears. What interest proration appears on the buyer's closing statement, considering February as a 28-day month?
That will NEVER be on the exam. I was even going cross-eyed from reading it. If you want to learn how to prorate like a pro, check out my video here 👉
czcams.com/video/LL47mnmEkdI/video.html
@@JustCallMaggie I watched that video it’s the vidoe that I commented on.
@@ConnorrrYT hahaha my bad. Well, I would guarantee that you will not see that type of question on your exam. They will ask more about rent or tax proration.
Hey maggie is this video goood for Illinois state as well
Yes. Absolutely 👍
I’m so confused on how the earnest money is a credit to the buyer when the buyer is the one that paid the earnest money. How is it not a debit to the buyer? That’s money that they are paying to the seller right?
Earnest money is a credit to the buyer because they have already paid it and that money will be going toward their down payment or loan costs. Since they already paid it at the beginning of the transaction, it needs to be taken into consideration when they tally the remainder of the funds required to close. Therefore, it's a credit to the buyer. Hope that helps.
@@JustCallMaggie thank you!
@@alazeechitison4349 you’re welcome ☺️