California Real Estate Practice Exam

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The process by which payments such as taxes are allocated at closing is called?

Proration
Appropriation
Escalation
Evaluation

The correct answer is: Proration

Proration is the correct term for the process of allocating payments such as taxes at closing. This term specifically refers to the division of fees or charges between parties in a real estate transaction. B Appropriation refers to the distribution or use of something, but it is not the specific term for this process. C: Escalation refers to an increase in something, often in relation to prices or costs. This is not the correct term for allocating payments at closing. D: Evaluation refers to the process of assessing or determining the value or worth of something, but it is not the term used for distributing payments at closing. Therefore, A is the only option that accurately describes the process described in the question.