TRANSACTION & CLOSING
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Proration
Also called: closing prorations · tax proration · rent proration
An allocation of income or expenses between buyer and seller as of the closing date.
What it means in practice.
Common prorations include rent, real-estate taxes, utilities and operating expenses, depending on contract and local custom.
Why it matters.
Prorations affect cash needed or received at closing and should be distinguished from purchase price.
Additional notes.
Common prorations include rent, real-estate taxes, utilities and operating expenses, depending on contract and local custom.
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