The Tax Man Cometh
For those of you that live in Cobb County or the Metro Atlanta Area, tax bills will be mailed in the very near future. This can mean some confusion for Sellers who are about to close on their property.
Here are a few helpful hints to avoid problems at the closing!
- If Closing will take place before the due date of the tax bill, the Seller should not pay the tax bill and let the Closing Attorney pay the bill at Closing.
- If the Seller does not have an escrow account, send the bill to the attorney prior to closing.
- If the Seller has and escrow account, the Seller should notify the Lender not to pay taxes and that the loan will be paid in full prior to the due date.
- If the tax bill is due before closing, the Seller should make sure the bill is paid in plenty of time for the County to post the payment. Some Counties can take 30 days or more.
- If the Seller does not have an escrow account, the Seller should pay the bill as soon as it comes out and get a copy of the cleared check asap! The Seller will be reimbursed for the Buyer’s portion at Closing.
- If the Seller has an escrow account, the Seller should contact their lender and ask that is paid ASAP. If the lender pays the bill but it has not posted by the county at the time of Closing, the attorney will be required to pay the bill out of the Seller’s proceeds at Closing.
So, what happens if the Seller’s lender and the closing attorney both pay the tax bill out of the Seller’s funds? This is a great question!
Answer- Once the County/City finalizes the posting of checks, they will refund payment to the party whose check they received second. If it was the attorney’s check, the attorney will then refund it to the Seller, but cannot do so until they receive a check back from the County/City.
As always, it is very important that the lines of communication are open between you and your Agent! Your Agent will communicate with the closing attorney prior to closing to determine how the taxes will be handled.
As a Seller, you should be communicating with your lender to give direction as to the escrow account disbursement of taxes.
This information was provided by Neel, Robinson, and Stafford, LLC.