Property Taxes and Escrow

PROPERTY TAXES AND ESCROW

PROPERTY TAXES ARE PRORATED IN ESCROW

1. 1. Review the estimated HUD and call escrow BEFORE it closes if you have any questions regarding how the taxes are prorated.

 PROPERTY TAXES WILL BE HELD FROM SELLER'S PROCEEDS IF THEY ARE SHOWING UNPAID UNLESS...

1. 1. The seller sends us a cashier's check made out to the title company or the tax assessor for us to pay

   2. The seller provides us with a cancelled check or their account information to verify that the check to the tax collector has cleared

 PROPERTY TAXES THAT ARE PAID BY IMPOUND ACCOUNT

1. 1. Seller's property taxes will be held from gross proceeds to pay taxes because traditionally the impound account is refunded to the seller WITHOUT paying the taxes. We will release money to seller if we are provided a letter from the lender stating that they are paying the taxes out of the impound account prior to refunding the balance to the seller.

   2. The seller may choose to pay them up front, and wait for the refund from the impound account rather than have any proceeds held.

   3. Should taxes actually be double paid, the county will accept the first payment and refund to the second party.

 A NOTE REGARDING SUPPLEMENTAL TAXES

 Supplemental taxes are not an explicit item in a preliminary title report. There is a general exception in schedule "B" that discloses we are excepting from coverage any supplemental taxes that may be due. This is because supplementals are not recorded as property taxes are. These are supplementals to the new owners adjusting the property taxes and are a type of "gap" tax.

 However, given the current market, obviously these taxes are in the negative, meaning no supplementals are due. But also understand that even though your client's property taxes are likely to be lowered, the county is issuing NO REFUNDS for current prorations between seller and buyer. The property taxes will not be lowered until the reassessment is complete.