Escrow & Title
In Kansas, what is 'proration' at closing and which items are typically prorated?
AThe division of the purchase price between buyer and seller
BThe allocation of ongoing expenses (property taxes, HOA fees, rents, prepaid insurance) between buyer and seller based on their respective ownership periods✓ Correct
CThe splitting of closing costs equally
DThe adjustment of the sales price based on market conditions
Explanation
Proration allocates periodic expenses (property taxes, prepaid rents, HOA assessments) proportionally between buyer and seller based on the closing date. Each party pays their fair share for the time they own the property.
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Key Terms to Know
Closing Costs
Fees 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.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Math Concepts
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