Property Taxes Paid By The Bank Through A Short Sale

Property taxes through a short sale are almost always paid by the lender. Not having property taxes reviewed correctly by the lender is very common and can end up being a costly mistake. If approved you may end up short at closing or one of the parties may have to pay for these taxes if they are were not shown property on the Est. HUD and reviewed by the bank to be paid for. With experience comes ways to monitor and improve a transactions success.

Ensure to follow these tips when it comes to taxes and prorated figures.

• Always ensure the settlement date is pushed out at least 60-90 days to ensure taxes and figures are prorated properly to ensure you are not short at closing.
• If taxes are paid in arrear the taxes should not be shown as a credit back to the lender, but as a debit on the Est. HUD.
• If you do not see any taxes on the Est. HUD you need to ask escrow/title to confirm taxes have been paid. It’s possible they looked over this by accident.
• If the lender states that taxes have been paid, go back to escrow/title and confirm if this information is correct. It’s possible to have a discrepancy between the two parties.

Having a tax issue at closing is never ideal and may cause many unnecessary complications in an already stressful situation.

For assistance with any bank or short sale issue feel free to reach out to us with any questions or for assistance by filling out the form below.

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