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Real Estate Glossary

What is Proration?

Proration - Proration is the process of dividing and allocating costs or expenses between two parties, typically a buyer and a seller, based on a specific time period. In real estate, prorations are commonly used for things like property taxes, utility bills, and HOA dues. For example, if a property is sold in the middle of a property tax year, the seller will typically pay the taxes up to the date of the sale, and the buyer will pay the taxes for the remainder of the year.

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