Your closing statement will include credits and debits you did not expect if you have not dealt with prorations before. Property taxes, HOA dues, and utilities are all split between you and the buyer based on the closing date, so the numbers need to add up. Here is how it works.

Property Tax Prorations

The term: tax proration is splitting the year's property taxes between the seller and buyer by closing date.

The meaning: if you already paid taxes covering part of the year, the buyer credits you for the days after closing.

The money: the closer the closing date is to year-end, the smaller the credit, since most of the year is behind you.

The real-world consequence: the math is based on the annual amount and the exact closing date, so it is precise.

HOA Dues Prorations

The term: HOA proration is splitting any prepaid or owed dues at closing.

The meaning: if dues are paid through a date past closing, the buyer credits you for the remaining period, and vice versa.

The money: it is a small line item, but it keeps the HOA account clean at the transfer.

The real-world consequence: the title company handles it, and the resale certificate confirms what was paid.

Utility Prorations

The term: utility prorations split bills like water, electricity, and gas at closing.

The meaning: you pass the accounts to the buyer and settle any usage up to the closing date.

The money: final meter reads and closing-date splits keep each side paying only for what they used.

The real-world consequence: prorations are one of those closing details that can be confusing, but the title company handles the math, and I always review the numbers with my sellers. Make it a great one, Patriot Nation.