Escrow & Title
In a real estate closing, proration is used to:
ADivide the commission between the listing and selling agents
BAllocate ongoing expenses and income between buyer and seller based on the closing date✓ Correct
CCalculate the lender's loan origination fees
DDetermine the title insurance premium
Explanation
Proration divides ongoing costs (such as property taxes, HOA dues, and prepaid rents) between the buyer and seller based on the closing date so each party pays only for the period they own the property.
Related South Dakota Escrow & Title Questions
- In South Dakota, 'RESPA Section 8' specifically prohibits which of the following?
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