Answer:
At a real estate closing, the buyer may receive credit for accrued items which are expenses incurred by the seller but yet to be paid. These are prorated and can include property taxes and utility bills, ensuring fair distribution of costs.
Step-by-step explanation:
At the closing of a real estate transaction, the individual in charge of the settlement process may issue a credit to the buyer for certain accrued items. These are items that the seller has incurred but not yet paid, and the buyer will be responsible for them post-closing. Examples of accrued items could include property taxes, utility bills, homeowners' association dues, or interest on a loan.
Accrued items are prorated based on the closing date. For instance, if the seller has paid a full year's property taxes, but the closing is midway through the year, the buyer would receive a credit for the remaining months where the seller will not own the property. This ensures that both parties pay only for their portion of the costs associated with the property. Understanding these transactions is vital for anyone involved in buying or selling real estate.