If You're Closing on Your Home When Property Taxes Are Due, Could You Pay Twice?

Closing near the time your property taxes are due? With the second half payment due at the end of October, it reminded me of what happened to a client of mine who was closing on the sale of her home near the time property taxes were due.

Here’s what happened:

Bank of “You Know Who” and escrow each paid the first half of the taxes of $2200+.  Bank of “You Know Who” had been instructed to not pay the taxes, but apparently did anyway.  So two tax payments were made to the county.  The county would not refund the money because there’s a law which does not allow a refund for an overpayment in taxes, if they were paid by a third party company, which was the case in this situation. The payment was automatically applied to future tax payments, even though the seller no longer owned the home.  The buyer was the beneficiary of the double tax payment, since they now owned the home, not the seller!

The seller talked with both the bank and escrow many times in an effort to get reimbursed.  The escrow company did try to work with both the bank and the county to resolve the issue.  However, since neither the bank nor escrow had the money, because they had paid the county, neither party would reimburse the seller for the money.

State law on this subject specifically prohibits the county from issuing a refund. The statute was amended in 2005, in response to input from many counties in Washington.  The counties did not want to be placed in the middle of such business transactions.

This is the state RCW and specific line in the code:

RCW 84.69.020

Grounds for refunds — Determination — Payment — Report.

However, no refunds as a result of an incorrect payment authorized under subsection (8) of this section made by a third party payee shall be granted.

There was a stalemate.  Neither the bank nor escrow would repay the seller and the county could not by law.

My seller called me to let me know what had happened.  I suggested contacting the buyer, who now had a credit for the 2nd half tax property payment.  I contacted the agent who represented the buyer and she, in turn, contacted the buyer and explained the situation.  The buyer was able to verify the overpayment and subsequent credit for the tax payment.  Fortunately, the buyer was accommodating and refunded the seller the overage.  This seller, after some stressful time dealing with this issue, was lucky.

Be careful when closing near the end of April or October, when tax payments are due. If your bank is responsible for paying your taxes, make sure your bank does not pay the tax bill. Escrow is responsible for doing so as part of the closing process.  It won’t be easy getting reimbursed if two payments are made.

Have you heard of other situations like this?


Posted on October 28, 2010 at 12:38 pm
The Beaupain Team | Posted in For Buyers, For Homeowners, For Sellers, King County Real Estate, Real Estate, Real World Real Estate, WA real estate | Tagged , , , ,

Fixing Up Your Home to Sell? Call Your Real Estate Agent First.

Getting ready to sell your home and needing to get it in show condition? There was a great article filled with tips on what to fix to get your home ready in last week’s Seattle Times. But there was one important thing I disagreed with in the article.

So before you call a real-estate agent, go over the property to determine what needs to be repaired or possibly replaced. Make a list of both major and minor jobs. Tackle big projects first.

I disagree, call your Real Estate agent first!  Why?   Because your agent can help you with this list, saving you time and money.

Here’s an example of what I’m talking about:

I’ll never forget the time an excited client called me to list their home.  They’d spent several months preparing their home for sale.  Teal blue carpet greeted me when the front door was opened.  My heart sank. It was brand new carpet. They were so proud of it.  They just loved the color.  Unfortunately, this carpet color was the number one complaint I heard from buyers and other agents.  Buyers didn’t love the teal blue.  It took a lot longer to sell the house because of the carpet color, costing the sellers time and money with the sale of their home.

I could give other examples, but the point is a seasoned real estate professional who’s out working with buyers on a regular basis will be in a position to tell you what needs to be done.  Since agents are out seeing homes all over Seattle’s eastside and work with both buyers and sellers, they’ll know what’s expected in the marketplace. Buyers will need to be excited about your home, see it as fresh and ready, and a good value in order to buy.  The agent can help you establish what the right amount of repairs and remodeling is so to meet the expectation of your local real estate market and the local buyers.  You don’t want to overdue it nor do you want to “under do” it either.   You don’t want to replace your bathroom vanity, as an example, if you don’t need to do so.  Maybe a dimensional formica or engineered granite will work in your home instead of granite.  Maybe you don’t need to do a complete kitchen remodel, but new appliances will do the trick. The goal is to have your home looking “mahvalous” as Billy Crystal would say, by only doing the things that really should be done.

Your agent will help you develop a list of the important things that must be done down to the “it would be nice to be done” category.  By doing so, the real estate agent will help you spend your money wisely. A good agent will know some of what an inspector, appraiser, and a buyer will expect to be done. It’s impossible to know everything, since not all things are visible and every home and buyer are different, but a real estate agent can add quite a lot from past experience.  They’ll have a list of skilled contractors who show up on time and do the job right.  Your real estate agent may also know contractors who are more reasonably priced who could do the job.

If you don’t already have an established relationship with an agent, interview agents right away.  Establish a working relationship with the agent you select to represent you.  Expect this agent to be your home advisor from the “get go,” well before the buying public knows you want to sell. The agent should spend time helping you create your repair list, making contractor and materials suggestions, and provide general advice about the local real estate market.  This should all happen well before you go on the real estate market and the “For Sale” sign is posted in your yard.

Posted on March 9, 2010 at 6:16 pm
The Beaupain Team | Posted in For Homeowners, For Sellers, Home maintenance tips, Real Estate, Real Estate Opinion, Real World Real Estate | Tagged , , , ,