Alabama Real Estate Practice Exam

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What are closing costs associated with?

  1. Opening a new bank account

  2. The process of closing a business

  3. Credits, debits, and prorations in a real estate transaction

  4. Filing yearly taxes

The correct answer is: Credits, debits, and prorations in a real estate transaction

Closing costs refer to the fees and expenses that are associated with the completion of a real estate transaction. These costs can include title search fees, appraisal fees, transfer taxes, and attorney fees, among others. Option A, opening a new bank account, is incorrect because closing costs are not relevant to that process. Option B, closing a business, is also incorrect because that refers to the dissolution of a business, not a real estate transaction. Option D, filing yearly taxes, is unrelated to real estate transactions and therefore not the correct answer.

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