Escrow & Title
What is a 'prorated' closing cost and how is it calculated in Illinois closings?
AA closing cost that is paid in advance and not subject to adjustment
BAn expense shared between buyer and seller based on each party's period of ownership/benefit during the closing year✓ Correct
CA cost that is paid in installments after closing
DA cost that is prorated only if the property is a rental
Explanation
Proration divides ongoing expenses (property taxes, HOA dues, rent) between buyer and seller based on the portion of the period each owns the property. In Illinois, property taxes are typically paid in arrears, so sellers often credit buyers for the taxes accrued through the closing date. The calculation uses a daily rate based on the annual amount.
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