Freehold
Prorations formula
seller's share = (annual amount ÷ 12) × months owned
seller's share = (annual amount ÷ 12) × months owned
Worked example: Annual property tax is $3,600. Seller owned the home for 5 months before closing.
$1,500 seller's share, credited to the buyer
Every Freehold question shows why the right answer is right — and cites its source.
A $150,000 interest-only loan carries a 6% annual interest rate. What is the monthly interest payment?
$750 — Annual interest is $150,000 × 0.06 = $9,000. Dividing by 12 months gives a monthly interest payment of $750.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
Annual property taxes of $2,400 are paid in arrears. If closing occurs exactly at the end of June, what is the seller's share for the six months of ownership?
$1,200 — Monthly taxes are $2,400 ÷ 12 = $200. The seller owned the property for six months, so the seller's prorated share is $200 × 6 = $1,200, credited to the buyer at closing.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
Annual property taxes of $3,600 are paid in arrears. If closing occurs exactly at the end of April, what is the seller's prorated share for the four months of ownership?
$1,200 — Monthly tax is $3,600 ÷ 12 = $300. The seller owned the home for four months, so the seller's share is $300 × 4 = $1,200.
Source: PSI National Real Estate Exam Content Outline §11 Real Estate Calculations
All 14 formulas in one place: Real estate math reference