Escrow & Title
At a Minnesota closing, proration of property taxes results in a debit to the seller and a credit to the buyer because:
AThe buyer pays the taxes from the closing date forward only
BMinnesota property taxes are paid in arrears; the seller owes taxes for their period of ownership that will be paid by the buyer in the future✓ Correct
CThe lender requires the buyer to pay the first year's taxes in advance
DTitle companies collect taxes on behalf of the county
Explanation
Because Minnesota property taxes are paid in arrears (the taxes for the current year are not due until May and October of the following year), at closing the seller owes the buyer for the portion of the year the seller owned the property. This is a debit on the seller's side and a credit on the buyer's side of the closing statement.
Related Minnesota Escrow & Title Questions
- A Minnesota title company charges a 'gap premium' in addition to the standard title insurance premium. What does the gap period refer to?
- What does a title search in Minnesota primarily examine?
- A judgment lien in Minnesota is created when:
- A Minnesota seller wants to close on June 30. Their property taxes for the year have not yet been billed. How will taxes typically be handled at closing?
- In Minnesota, a 'condition subsequent' in a deed creates what type of estate?
- In Minnesota, which party is responsible for preparing the deed that conveys title to the buyer at closing?
- A subordination agreement in a mortgage transaction means:
- In Minnesota, the deed tax is $1.65 per $500 of consideration (or fraction thereof). What is the deed tax on a $187,500 sale?
Practice More Minnesota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Minnesota Quiz →