Which of the following items are examples of closing items not prorated between buyer and seller?

Which of the following items are examples of closing items not prorated between buyer and seller?

• A. Title insurance and inspection fees
• B. Taxes and insurance
• C. Rents and interest
• D. Rents and insurance

Answer: (A)

When closing costs are handled, some items are prorated because they accrue over time from signing to the closing date, while others are single, one-time charges paid at closing and aren’t divided between the parties. Title insurance and inspection fees fall into the second category: they are paid in full at closing and don’t represent a portion of a period that needs to be split. In contrast, taxes and insurance are typically prorated because they cover a period of time and the responsibility shifts from seller to buyer at closing; rents and mortgage interest are also prorated when applicable since they accrue over time. The pairing of rents and insurance isn’t the best example of non-prorated closing items, since rents are prorated and insurance can be treated as a prepaid or prorated item depending on the situation.

When closing costs are handled, some items are prorated because they accrue over time from signing to the closing date, while others are single, one-time charges paid at closing and aren’t divided between the parties. Title insurance and inspection fees fall into the second category: they are paid in full at closing and don’t represent a portion of a period that needs to be split. In contrast, taxes and insurance are typically prorated because they cover a period of time and the responsibility shifts from seller to buyer at closing; rents and mortgage interest are also prorated when applicable since they accrue over time. The pairing of rents and insurance isn’t the best example of non-prorated closing items, since rents are prorated and insurance can be treated as a prepaid or prorated item depending on the situation.