What is Proration?
Proration is the fair splitting of ongoing property costs — like property taxes and HOA dues — between buyer and seller based on the closing date. Each party pays for the portion of the period they own the home. Prorations appear on the closing statement.
Example: The seller has prepaid property taxes through June; at a mid-May closing, escrow prorates and credits the seller for the part of the period the buyer will own the home.