Preparing your clients for this additional financial responsibility is another way to help your transaction flow quickly and smoothly. During the period of September 1st through October 15th, your buyer/borrower’s lender, in most cases, will require a Tax Holdback for the estimated payment of the 2011-12 county property taxes. This estimated amount quite often is 115% of the previous year’s tax amount.
Also during this time, pro-rations of the property taxes will be a debit to the seller and a credit to the buyer. The prorated tax value will be based on last year’s tax amount as the New Year’s tax amount is not yet available, unless the sales agreement instructs for a different figure to be used.
Time of closing is critical when dealing with tax prorates between the buyer and seller. When in doubt, ask questions. We’re on your team and here to help.
Escrow Tips Courtesy of Theresa Marshall, Senior Escrow Office at Lawyers Title. With over 15 years experience Theresa is a great resource for your Title & Escrow needs.