New Jersey Real Estate Practice Exam Practice Question
Which of the following items would be prorated at closing with the credit going to the seller?
Correct Answer: B
Rationale: In a closing transaction, prorations ensure that expenses are fairly divided between the buyer and seller based on the closing date.
**Prepaid property taxes** (Option B) are paid by the seller for a period beyond the closing date. Since the buyer will benefit from these taxes after the sale, the seller receives a credit for the portion of taxes covering the period they no longer own the property.
**Accrued interest on an assumed mortgage** (Option A) is typically paid by the buyer at closing, as they assume the mortgage and its associated costs.
**Earnest money** (Option C) is a good faith deposit made by the buyer, not prorated at closing, as it is applied to the purchase price.
**Unearned rent collected in advance** (Option D) represents income received by the seller for future periods and is credited to the buyer, not the seller.
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