Skip to main content

NOVEMBER MONTH END CLOSINGS - A Warning

Many are first time home buyers trying to squeak "under the wire" in hopes of closing contracts before November 30th - the sunset date for the Federal First Time Home Buyer's Tax Credit. The impending deadline presents some unique challenges for Buyers and Sellers.

That November 30th deadline comes smack dab at the end of the Thanksgiving day weekend. (What genious in Washington did that?) That means a host of closings are being scheduled for Friday the 27th and Monday the 30th the last two possible days to get closings done.
  • Will the title companies and lenders cancel all holiday vacations and work at full capacity to get these closings done expeditiously, or will be have to sit for hours at the closing table while closers handle multiple simultaneous closings?
  • Will loan officers and processors get files to the underwriters with time enough for review and to satisfy conditions before the inevitable holiday slowdown, or will some Buyers be disappointed when there lenders "blow" the November 30 deadline?
  • What about those pesky property tax bills?
That last one worries me a bit more than the others. Don't forgot the interplay between the federal tax credit deadline and Cook County's Property Tax Deadline.

Cook County taxes are, of course, theoretically mailed in August to be due on September 1st. This year, as in what 16 of the last 17 before it, the taxes came out late; Mailed last week and due December 1st.

Sellers are going to have to pay those taxes at or before closing. If the Seller's mortgage lender pays the taxes from an escrow, the Seller is going to have to somehow prove to the title company that they in fact did so. We may be able to prove payment three different ways:
  1. Show a paid receipt
  2. Confirm payment on the County Treasurer's web site.
  3. Show proof on the lender's mortgage payoff statement that the tax payment was disbursed (even if not posted paid by the County).
Lenders do not all pay tax bills as soon as they are received (do you?) Most wait until the deadline nears before sending the payments in. The Treasurer does not report payments to her web site in real time. No title company is obligated to accept that payoff statement as a proof of payment. Many might refuse them altogether. Others may require sellers (or their attorneys) to sign "personal guaranties or hold money aside from the closings.

Sellers, Attorneys, and Real Estate Agents are strongly encouraged to coordinate property tax payments with mortgage lenders as possible to minimize the possibility of a title clearance problem or a hold back of seller proceeds.

Comments

Popular posts from this blog

The Equifax data breach and you — 6 steps to take now

Identity thieves hit a major credit reporting agency—hard. Millions of consumers’ confidential identity information has been compromised.

Equifax, one of the big three credit reporting agencies announced that a massive security breach took place earlier this year. Offenders accessed data sets of 143 million US consumers.

What to do when drones fly near your home

Imagine a quiet evening on the deck of your new home when—out of nowhere—a noisy drone begins hovering around your property, almost certainly snapping photos or video. It’s like Space Invaders meets Gladys Kravitz. So what do you do?

Help! My Neighbor’s Old Tree is Growing Over my Roof

Let’s say about 100 years ago, a family planted an oak tree on the edge of their property. Over generations it’s grown into a magnificent tree that provides summer shade, autumn color and a swing for the neighborhood kids. You probably even liked the tree when you bought the house next door to it.

But today, its root system is invading your basement, its acorns bombard your yard and its huge limbs loom threateningly over your roof. By law, can you cut it down? Trim it? Turn it into a boat?