Escrow & Title
In an Oregon real estate closing, what does 'proration' refer to?
AThe proportional allocation of property taxes, rents, insurance premiums, or other expenses between buyer and seller based on the closing date✓ Correct
BThe distribution of commission between buyer's and seller's brokers
CThe lender's calculation of monthly mortgage payments
DThe title company's fee for closing services
Explanation
Proration divides prepaid or accrued expenses (property taxes, HOA dues, rent, prepaid insurance) between buyer and seller based on who owns the property on which days. For example, property taxes paid in arrears would be credited to the buyer (since the seller owes for the days they owned); prepaid taxes would credit the seller.
People Also Study
Related Oregon Questions
- A buyer's annual property tax bill is $6,600. Closing occurs on September 30. Using a 360-day year, how much does the seller owe the buyer as a prorated tax credit (taxes paid in arrears)?Real Estate Math
- Calculate the transfer of tax proration at closing. Oregon taxes for the fiscal year July 1 – June 30 are $4,800. The closing date is October 15. The seller has not yet paid any taxes for the current fiscal year. How much is the seller's proration?Real Estate Math
- Oregon fair housing law prohibits discrimination based on 'source of income.' Which of the following is an example of source-of-income discrimination?Fair Housing
- An Oregon investor paid $320,000 for a rental property. The property generates $2,400/month in rent. What is the gross rent multiplier (GRM)?Real Estate Math
- An Oregon property's assessed value is $260,000. The applicable tax rate is $18.50 per $1,000. If the taxes are paid in two equal installments, what is each installment?Real Estate Math
- Under Oregon ORLTA, a landlord may charge a late fee when rent is paid late. The fee is:Property Management
- When an Oregon property is sold, how are property taxes typically prorated at closing?Escrow & Title
- In Oregon, a property manager who collects rent and pays property expenses must maintain which type of records?Property Management
Key Terms to Know
Proration
The division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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.
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.
Math Concepts
Study This Topic
Practice More Oregon Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oregon Quiz →