Definition
If utilities are paid based on meter readings or estimates, the final bill is split at closing. You reimburse the seller for days they paid for but you'll own. It's calculated based on actual usage.
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Find my pathAbout this term
Utilities are prorated so each party pays for days occupied. Based on current meter readings or estimates. Gas, electric, water typically prorated. Seller pays through closing date; buyer pays after. Adjustments made at closing. Estimates refined when actual bills received. Amounts are typically small but require accuracy. Part of closing settlement statement. Prevents either party from overpaying or underpaying for utilities.
Pro Tip
Verify utility proration dates match your actual closing date.
Example
Prorated utilities adjusted $150 for January usage, with seller paying through closing.