If you’re referring to property taxes, typically they are prorated to the day escrow closes. The seller is responsible for everything up to that day, and he buyer for everything after.
As I’m sure you know, every county has a specified tax period. So, as a buyer you would pay for any time remaining after you close until the end of that particular tax period. If a seller had prepaid the taxes, it would show as a credit on their side, and a debit on your side.
You say you are learning, but it matters what/why you are learning.
Are you doing this so that you can give a fair estimate of closing costs?
Oftentimes, that section is left blank when a lender or title person sends me a hud1 for an estimate.
At closing it will be down to the day based on when the taxes are due, if they have been paid, and importantly: the exact dates that that juristiction bills for AND if there is a county and local tax. That amount is pro-rated with typically a credit to the seller (IF they have paid bills) and a debit to the buyer side.
In addition, IF the lender is setting up an escrow, there will be costs for a number of months to set the escrow up to have funds to pay bills as they come in.
When I am buying, I always ask... how much are taxes to whom and what dates. That way I have an estimate of what we are talking about. Same w/insurances.
Because I am learning.
Greetings Gerald2005,
If you’re referring to property taxes, typically they are prorated to the day escrow closes. The seller is responsible for everything up to that day, and he buyer for everything after.
As I’m sure you know, every county has a specified tax period. So, as a buyer you would pay for any time remaining after you close until the end of that particular tax period. If a seller had prepaid the taxes, it would show as a credit on their side, and a debit on your side.
Hope this helps a little
You say you are learning, but it matters what/why you are learning.
Are you doing this so that you can give a fair estimate of closing costs?
Oftentimes, that section is left blank when a lender or title person sends me a hud1 for an estimate.
At closing it will be down to the day based on when the taxes are due, if they have been paid, and importantly: the exact dates that that juristiction bills for AND if there is a county and local tax. That amount is pro-rated with typically a credit to the seller (IF they have paid bills) and a debit to the buyer side.
In addition, IF the lender is setting up an escrow, there will be costs for a number of months to set the escrow up to have funds to pay bills as they come in.
When I am buying, I always ask... how much are taxes to whom and what dates. That way I have an estimate of what we are talking about. Same w/insurances.