PSI Oklahoma Real Estate Practice Test

In a sale transaction closing on December 10th, how should the rent collected on December 1 be prorated to the buyer?

1. Credit Buyer $368 based on the 365-day method

2. Debit Buyer $713 for the entire month

3. Credit Seller $368 based on the 30-day month

4. Charge Buyer $345 for the days occupied

The correct answer is: Credit Buyer $368 based on the 365-day method

The correct answer involves using the 365-day proration method to allocate the rent collected for December 1. Since the closing occurs on December 10, the buyer will occupy the property from December 10 through the end of the month. Therefore, they are entitled to the rent payment for the days they own the property. To determine the proration, it's vital to calculate the per-day rent amount using the total rent for December and the number of days in that month. If the total rent for December is based on a typical monthly figure, dividing the total by 365 gives the daily rate. In this case, if we assume the rent for December is in the $368 range for this context, you would calculate that per day, then multiply it by the number of days from closing (December 10) to the end of the month (December 31). The credit to the buyer reflects compensation for the portion of the month they are responsible for after the closing date, making it fair and consistent with prorating standards in real estate transactions. This method of proration is aligned with the common practice of prorating based on the actual number of days in the year, which is why the buyer receives this credit rather than a debit for the entire