Hello realtors. This week I’m going to talk about property taxes and what happens when there’s a senior exemption. So I’ve got one of these going right now. And what we’re finding is that it’s really important for all of the professionals surrounding the buyers right title escrow realtor lender, everybody is coming with the same basic information.
So, purchasing a house that has a senior exemption will impact your buyers at two points. The first is at the time of closing, an estimate for taxes will be used for determining the monthly payment, and also determining the amount that needs to be collected by the lender in reserves to be able to make that property tax payment in October or April, whichever one’s coming up. So sometimes it can be a little uncomfortable signing loan documents based on an estimate, just helping everybody know that that’s totally normal. And that’s how it’s done.
Then fast forward to when the county actually assesses the new taxes. That is going to be a moment when they reach out to the lender, assuming the lenders paying those taxes. And they’ll work out what figure out how much the lender now needs. Maybe they have an overage and the buyer gets a refund and their payment comes down. Maybe there’s a shortage and the payment goes up a little bit and the buyer needs to add additional funds to the reserves. There’s no way to know that 100% up front, they typically go down but we can’t promise that.
So just letting your buyer know that there’s going to be this other moment once the taxes are assessed. Now when the taxes will be assessed. Who knows. Who knows I’ve seen it take a couple of months. I’ve also seen it take several years now in the time of it taking several years that was doing COVID. So that hopefully will not be the norm. But there’s just no way to know exactly when it’s going to be assessed. And so when you have a buyer purchasing a home with a senior exemption, they’re going to have a few more hoops to jump through down the road. And that’s okay, just as long as we’re all keeping them informed and educated. reach out with any questions.