Tax Proration And Closing Date
I've been reading the forums for quite some time and now have a question during my second deal. I am the buyer of a piece of real estate. I have a fully signed purchase agreement with all stipulations removed. My mortgage is almost all set. In the offer I made I have to close between 30 and 45 days of the offer. The 45th day is on July 5th. In my offer I wrote that the seller is responsible for all taxes billed before close with no tax protration. Taxes are billed on July 1st. Being that, I want to close July 2nd so the seller will be responsible for the $1800 tax bill that gets billed on the first. The seller requested to close June 20th or 27th, and is "going out of town on the first of July and won't be back". I decided this course of action after I asked for minor concessions ($750) for an undisclosed non working furnace and hot water heater that she was balking at so I quickly retracted the counter offer, leaving the initial offer intact. So, my question, is that if I refuse to close before the 2nd, is she legally liable to close on the 2nd or the 5th? One more thing, being that it states billed prior to, if I close on the 1st, would she be liable for the taxes?
Thank you for your help!
Andy[ Edited by superdrew on Date 06/11/2004 ]
What is the tax year? If the tax year runs from July 1 through June 30, then it seems likely that the taxes would be actually "billed" about 45 days earlier.
Additionally, you don't tell us whether the taxes are paid in advance or in arrears. If taxes are paid in arrears, then the seller would be responsible for the entire tax bill even with proration.
Actually taxes are due in september, but billed in July. Taxes are paid in advance. In my offer it states that any "taxes billed" before closing are the sellers responsibily with no proration. Is there any other information I can provide?
Thank you,
Andy[ Edited by superdrew on Date 06/11/2004 ]
I am not sure what the seller will try after they figure out that they have agreed to the full bill. Your deal might get hung up so be prepared to extend the lock on the loan if you have one.
As to the escrow. Any reason that the seller can not sign everything before they leave at the end of June and then you come in after the 1st of July to sign and then close escrow? You could even sign the documents so they can see that everything is in order but not fund until early July.
John
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