20 . More Closing CalculationsProrating ExpensesCertain items such as taxes, rent, and sometimes insurance do not stop simply because the propertychanges hands. It is necessary to prorate split for the time the property is in possession of theowner’s. In prorations, either the buyer owes the seller or the seller owes the buyer. The brokers arenot involved, nor is the lender. In Florida, it is customary to have everything prorated as ofmidnight the night before closing.The buyer is normally responsible for the day of closing as the buyer would own the property as of12:01 the day of closing.A 365 day method is usually used.When calculating prorations as explained before, one party will be debited for an amount owed andthe other party credited for that amount, like double entry bookkeepingRent ProrationWhen a seller owns rental property, rent is prepaid for the month. The seller will owe the buyer forthe days that the buyer owns the property- from midnight the day before closing until the last of themonth. Use the 365 day method and prorate at midnight the day before the closing.A property was sold and the closing took place on November 15. This property contained tenapartments with rentals due the first of each month for each unit of $750.00. The seller collectedthe rent for the month on November 1st. How much would the rent proration be, and how would itappear on the settlement statement? Do not round off any of your answers until the end of theproblem if it is necessary.
how would it appear on a full settlement statement?Do not round off your answers in this or any other math question until the end of the entireproblem.
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