Tip of the Month - November 2008

Managing Property Tax Payments During Escrow - 1st Half

A Message for Sellers

During the month of October, Sellers will receive a property tax bill for the 2008-2009 tax year. The First Installment of these taxes is payable beginning November 1, 2008, and is delinquent if not paid by December 10, 2008.

Here are some simple guidelines to assist Sellers in managing property tax payments while their property is in escrow.

• If the escrow is scheduled to close before December 10th, the 1st installment will be paid through escrow. You should forward the tax bill to your Escrow Officer at your earliest convenience.


• If the escrow is scheduled to close after December 10th and you want to avoid a late penalty, your Escrow Officer will pay your taxes through the title company prior to closing if you:
• Provide the tax bill to your Escrow Officer at least five (5) business days prior to December 10th and
• Provide a cashier's check for the total amount made payable to the county tax collector for the county in which your property is located.


• Caution: If you use a personal check for the payment, the title company may require that the amount of the taxes plus any potential penalties be held in escrow until your check has been paid by your bank and the tax payment has been properly posted at the Assessor's Office.


• Caution: If you pay the taxes directly to the county tax collector, the title company may not be able to verify your payment in time for the closing. In this event, the title company will require that the amount of the taxes plus any potential penalties be held in escrow until the county tax collector verifies receipt of your payment.

• If your existing lender holds funds in an Impound Account for the payment of property taxes, bring this to the attention of your Escrow Officer.


• Avoid double payments of taxes by following these payment guidelines and communicating with your Escrow Officer. Refunds of double payments from the tax collector's office can take weeks to process.

Check with your Escrow Officer, real estate agent, or accountant if you have questions about this process. Following these suggestions will help you manage the payment of your property taxes during escrow while avoiding late payment penalties and post-closing holds on your funds.

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