PrePaids. These are buyer costs for things like real estate taxes, homeowners insurance, and loan interest. Real estate taxes are prorated between buyer and seller based on what time of the year a closing occurs, and the buyer pays its share up to the date of closing (even if they are not due to the county yet). Lenders often require that the cost of an entire year of insurance premiums be collected at close of escrow. Loan interest is prepaid for at least from the date of closing to the end of that month. These items can add up to be around 1% of the purchase price.