Year End Real Estate Tax Adjustments--A Great Marketing Opportunity to Reconnect With Your Buyer Customer

In Massachusetts, where I have practiced real estate law since 1968, the fiscal year for local real estate taxes begins on July 1 and ends on June 30. Almost all cities and towns collect taxes on a quarterly basis, although there are still a few semi-annual holdouts. In any event, to the best of my knowledge, all cities and towns use an estimated tax for the first six months of the fiscal year, with the actual bill for Jul1 through June 30 being sent out in late December or early January.

Since this seems to be a consistent pattern through Massachusetts (and perhaps in other jurisdictions, as well), there is an opportunity for all of us to revisit those of our clients and customers who bought in the July 1 through December 31 period and re-calculate the correct tax adjustment for them. If the recalculation amounts to only a fe dollars, there is no need to contact the Seller for payment. If hundreds of dollars are involved, like in the instance I am currently working on, where a 2 Unit Condominium was formally taxed as a single family dwelling, and has been upgraded because of a zoning change, the exercise can prove profitable for the Buyer.

It would seem only natural that your Buyer will be eternally grateful to you for pointing this out to him, her or them. Many times at closing, I hear Realtors tell their customers that they will keep in touch. Here is a contact that may put dollars in your customer's pocket. I know of one Realtor who sends his client a copy of the HUD-1 Settlement Statement for the transaction and encourages the customer to compare the tax adjustment with the "real" tax bill.

As an aside, with real estate prices falling in some sections of the country, it is possible that real estate taxes may have gone down. If this is the case, this adjustment may favor the Seller, and perhaps, the listing agent will want to briing thie fact that money is owed to the Seller's attention