The paragraph addressing prorations is to notify the home buyer and home seller that fees related to the home which are paid for a period of time during which both parties may be in ownership will be prorated and split at closing. For instance, property taxes and homeowner association (HOA) fees.
In Texas, the property taxes are paid at the end of the year so the prorated amount is figured from January 1 through the day of closing and debited from the sellers proceeds and credited to the buyer so that at the end of the year the buyer can pay the full tax bill. The HOA fees may have been paid in advance by the seller so the buyer will be debited from the day after closing through the paid period and the seller would be credited the balance.
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