Escrow & Title
In a Washington real estate closing, proration means:
AAdding closing costs to the buyer's loan balance
BDividing ongoing expenses like property taxes and HOA dues between buyer and seller based on the closing date✓ Correct
CRefunding the seller's unused prepaid insurance
DAllocating the real estate commission
Explanation
Proration is the allocation of ongoing property expenses (property taxes, HOA dues, prepaid rents) between buyer and seller based on who owns the property on each day, calculated to the closing date.
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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.
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.
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.
Math Concepts
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