Proration at closing adjusts for:
Why Items paid in advance or in arrears so each party pays their fair share Is Correct
Answer B: Items paid in advance or in arrears so each party pays their fair share
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.
Key Escrow & Title Terms in This Question
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
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Key Terms to Know
The division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
State-Specific Concepts
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