For prorating purposes, use 30 days for a month and 360 days in a year.
The proration process:
1 = Determine the number of days to be prorated
2= Calculate the cost per day
3= Mulitply the number of days by the cost per day
4= Decide whether the item should be a credit or a debit to the buyer or seller
5= Expenses that have been paid to some time after escrow closes, credit the seller and debit the buyer
6= Expenses that will be due after the close of escrow, debit the seller and credit the buyer.
The common expenses that usually are prorated are : Property Taxes , Interest on assumed loans , fire and hazard insurance and rents.
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