How to pro-rate a propane tank before the sale of a house
How to Pro-Rate a Propane Tank before the Sale of a House
As a realtor, it's important to be able to answer any and all questions your clients may have about buying or selling a house. One common question you may get is about propane tanks and how they should be pro-rated in the sale of a house. Here's everything you need to know to become a pro at pro-rating propane tanks!
Why Pro-Rate?
In short, pro-rating helps ensure that the buyer and seller each pay their fair share of the propane remaining in the tank at the time of sale. The pro-rated percentage is calculated by taking the number of days left in the billing period and dividing it by the total number of days in that period. This calculated percentage is then applied to the total cost of propane used during that billing period.
For example, if there are 30 days in the billing period and 15 days have passed, then half of the total cost for propane used during that period would be charged to the seller and half would be paid for by the buyer. However, if 30 days have passed with no bill being issued yet, then 100% of that bill would be paid for by the seller since none of it was used during the buyer's occupancy.
It's important to note that buyers and sellers may negotiate who pays what percentage of a remaining propane bill, but typically, it is prorated as described above. Once you've got a handle on how to calculate the pro-rated percentage, all that's left is to apply it to the final propane bill!
Applying The Pro-Rated Percentage
The first step is to obtain a final reading from your utility company so you have an accurate starting point for pricing purposes. Once you have obtained an accurate starting point, simply multiply that number by the applicable tax rate and service charge (if any). After multiplying those numbers together, you'll then multiply your answer by … drumroll please …the pro-rated percentage!
You've now successfully calculated the amount owed for propane use during the sellers occupancy period using information from both parties. Now all that's left is transferring payment from one homeowner to another and everyone can rest easy knowing they've got their fair share covered!
Pro-rating a propane tank may seem daunting at first, but armed with this guide, you now have all the information you need to help your clients through this process with ease! Remember to always obtain an accurate starting point from your utility company and then simply apply the pro-rated percentage as described above. With these steps in mind, you'll be a pro at pro-rating propane tanks before you know it!