In a California residential transaction, the escrow officer informs the buyer that certain items are prorated at closing. Which of the following is MOST commonly prorated between buyer and seller at closing?
Correct Answer
A) Property taxes
Property taxes are the most commonly prorated item at closing in California. Since the property tax fiscal year runs from July 1 to June 30, and the closing date rarely coincides with the start or end of a tax period, the taxes are prorated so that the seller pays for the period they owned the property and the buyer pays for the remainder.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The closing process, also called settlement, is the final step in a real estate transaction where documents are signed, funds are disbursed, and title is officially transferred from the seller to the buyer.
Constructive notice is the legal presumption that a person has knowledge of information that is available through public records or visible inspection of the property, regardless of whether they actually knew about it.
A deed is a written legal document that conveys (transfers) ownership of real property from one party to another. It must be delivered to and accepted by the grantee to be effective.
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- → A buyer records a deed at the county recorder's office. What is the primary purpose of recording?
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A California escrow involves a probate sale where the court has confirmed the sale at $475,000. During the court confirmation hearing, another bidder offers $510,000, which meets the overbid requirements under California Probate Code. What happens to the original escrow?
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