Escrow & Title
Which of the following items would typically appear as a CREDIT to the seller on the closing settlement statement?
AThe seller's existing mortgage payoff
BPrepaid property taxes the seller has already paid for the period after closing✓ Correct
CThe commission paid to the seller's broker
DThe title insurance premium
Explanation
Prepaid property taxes the seller has paid beyond the closing date are credited back to the seller (and debited to the buyer) as a proration. The seller has already paid for tax coverage beyond their period of ownership, so they are reimbursed at closing.
People Also Study
Related Oregon Questions
- 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
- 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
- Which of the following items would appear as a 'debit' to the buyer on the closing statement?Escrow & Title
- An Oregon homeowner bought their home 5 years ago for $350,000 and is selling it today for $520,000. Selling costs (commission + closing costs) were 7% of the sale price. What is the net profit from the sale (excluding taxes)?Real Estate Math
- What does 'proration' in a real estate closing mean?Escrow & Title
- When an Oregon property is sold, how are property taxes typically prorated at closing?Escrow & Title
- In an Oregon real estate closing, what does 'proration' refer to?Escrow & Title
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.
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.
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.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
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 →