A Texas property sells for $380,000 with a closing date of September 15. The annual property taxes are $7,600, and the seller has not yet paid the current year's taxes. Using a 365-day year with the seller responsible through the day of closing, what is the seller's prorated share of property taxes?
Correct Answer
D) $5,372.05
Count the seller’s responsibility from January 1 through September 15: 258 days. The daily tax is $7,600 divided by 365, and $7,600 times 258 divided by 365 equals $5,372.05. Option D is the exact result.
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Related Topics & Key Terms
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Related Concepts
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
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