Escrow & Title
In an Iowa real estate closing, prorations are used to:
ACalculate the broker's commission
BFairly allocate ongoing expenses (such as property taxes and prepaid rent) between buyer and seller based on the closing date✓ Correct
CDetermine the title insurance premium
DSet the loan origination fee
Explanation
Prorations divide ongoing property expenses between the buyer and seller based on each party's period of ownership. Common Iowa prorations include property taxes (paid in arrears), prepaid rents on investment properties, and HOA dues.
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