Escrow & TitleIntermediateAlaska Exam

In an Alaska real estate closing, proration of property taxes means:

AThe buyer pays all property taxes for the year
BProperty taxes are divided proportionally between buyer and seller based on the closing dateCorrect
CProperty taxes are waived for new construction
DThe lender advances property taxes and adds them to the mortgage, under typical circumstances

Why Property taxes are divided proportionally between buyer and seller based on the closing date Is Correct

Answer B: Property taxes are divided proportionally between buyer and seller based on the closing date

Proration divides property taxes (and other ongoing expenses) between buyer and seller based on how many days each party owned the property during the tax period.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

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