What is the total proration amount on the closing statement?

The correct answer is a debit to the seller and a credit to the seller, which suggests that the total proration amount reflects the seller's financial responsibility towards certain costs or fees that need to be accounted for at closing.

In real estate transactions, proration refers to the division of expenses and income between the buyer and seller based on the closing date. Various costs such as property taxes, homeowner association fees, or rent may need to be adjusted accordingly. When an amount is debited to the seller, it indicates that this amount is being deducted from the seller’s proceeds of the sale, which they are responsible for, up until the date of closing.

Having a corresponding credit to the seller means that this amount is acknowledged in the closing statement as a reduction in their net proceeds, which is a common practice in real estate to ensure all parties are accurately reflecting their financial obligations.

Therefore, accurately identifying the proration is crucial, as it affects how much the seller ultimately receives from the closing and ensures that they are accountable for expenses up to that point. It is essential for real estate professionals to properly calculate these prorations to facilitate a smooth closing process and avoid disputes.