Title company requesting more money after closing?

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fujiters
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Title company requesting more money after closing?

Post by fujiters »

We sold our home and signed settlement paperwork on September 30. The buyer signed on October 1.

Property taxes were part of the settlement, to be paid at closing. However, the property tax payment was due on September 30.

The title company just came back to us (12 days after signing, and after funds were wired to us) saying that there was an interest charge for the property tax (since they're paying in October, after the due date) and that we need to write them a check to cover it. It does not appear that they have paid the property tax bill.

Our view is that the amounts we agreed to are contained in the settlement paperwork. If there was an additional interest fee for late payment of the property tax, that should have been part of the paperwork (which would have caused us to deal with it before closing). Additionally, the title company charged the buyer a "Tax Verification Fee" (an amount larger than the interest payment).

What should we do? Pay it? Push back on title company? Ignore them?

Tangentially related: this title company has been a pain to deal with (mistakes over multiple drafts of paperwork, finalizing paperwork less than 24 hours out with new fees for things like remote signing, etc), so I'm somewhat biased towards making this hard for them, if only by waiting weeks before responding (next interest charge would apply on November 1).
“The purpose of the margin of safety is to render the forecast unnecessary.” -Benjamin Graham
123
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Re: Title company requesting more money after closing?

Post by 123 »

I would vote that you are off-the-hook and that it is on the title company (or the buyer).
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8foot7
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Re: Title company requesting more money after closing?

Post by 8foot7 »

If you paid tax due through 11:59pm on your day of closing, then you don't owe an interest payment. They had the money on the due date in their capacity as escrow agents; they could easily have simply asked for a receipt from you instead that the taxes had been paid if they were worried about their ability to arrange payment of taxes due on the due date. They work with coordinating dates and payments as a matter of course and profession. As escrow agents they have a responsibility for promptly remitting amounts due to various parties owed funds, and any penalties incurred by their doing so after due dates are a cost they bear.

I would tell them they had the monies due per mutual agreement on the day of closing and disbursement was their responsibility, that you won't be paying and you consider the matter closed and won't respond to further inquiries regarding the matter. If you want to be a little nastier, you might mention you took the liberty of checking into the matter with the tax assessor and you note the taxes still have not been paid despite their having the funds on deposit, thereby increasing the interest penalty and you'd recommend that they pay today to at least stop further accrual.
Last edited by 8foot7 on Tue Oct 12, 2021 3:16 pm, edited 2 times in total.
mary1492
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Re: Title company requesting more money after closing?

Post by mary1492 »

How much money are we talking about here? How many days of interest are they claiming there was?

With my property taxes, there is a 9 calendar day grace period, so if you are a couple days late, there is no penalty or interest. You might want to contact the tax assessor's office and verify if they did charge for the payment being late.

Re-reading, you believe that they still have not paid the property taxes yet? Unbelievable! They should have paid whatever they had and let the tax assessor then come back indicating if there was a deficiency with additional amount due. If that is the case, then escrow has not closed yet? This wouldn't make any sense if they already wired you your portion of the proceeds.
Last edited by mary1492 on Tue Oct 12, 2021 3:21 pm, edited 1 time in total.
Mr.Chlorine
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Re: Title company requesting more money after closing?

Post by Mr.Chlorine »

If you have already been paid what you expected and what matches the closing documents, then I agree. This is on the title company.

However, since the title company seems to be such a pain to work with, if the interest amount is so low (how much interest can there be for 12 days!?) I would consider paying just to end communication with them.
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8foot7
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Re: Title company requesting more money after closing?

Post by 8foot7 »

Mr.Chlorine wrote: Tue Oct 12, 2021 3:19 pm If you have already been paid what you expected and what matches the closing documents, then I agree. This is on the title company.

However, since the title company seems to be such a pain to work with, if the interest amount is so low (how much interest can there be for 12 days!?) I would consider paying just to end communication with them.
It costs nothing to end communication with them without paying. Just: don't communicate.
(In my area property tax late fee + interest has a minimum charge of $50. Perhaps OP's area is similar.)
Mr.Chlorine
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Re: Title company requesting more money after closing?

Post by Mr.Chlorine »

8foot7 wrote: Tue Oct 12, 2021 3:23 pm
Mr.Chlorine wrote: Tue Oct 12, 2021 3:19 pm If you have already been paid what you expected and what matches the closing documents, then I agree. This is on the title company.

However, since the title company seems to be such a pain to work with, if the interest amount is so low (how much interest can there be for 12 days!?) I would consider paying just to end communication with them.
It costs nothing to end communication with them without paying. Just: don't communicate.
(In my area property tax late fee + interest has a minimum charge of $50. Perhaps OP's area is similar.)
lol true.

FWIW - My area has a late FEE for the first month. Then the interest and additional fees start.
Goal33
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Re: Title company requesting more money after closing?

Post by Goal33 »

Well, you're not going to go to court over this amount since it sounds like a small amount. Ask them to cut their fee to make up for the missing $ since it's their mistake.

The absolute worst thing that can happen in this entire scenario is you lose the interest payment.
mary1492
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Re: Title company requesting more money after closing?

Post by mary1492 »

Something else you might check...I pay my property taxes online through my township's website. On the website I am able to check the current payment status for any property in the township. Does your county/township offer similar? If so, go in and check if the taxes have been paid for your property, the date of the payment, and how much was paid.
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SmileyFace
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Re: Title company requesting more money after closing?

Post by SmileyFace »

Somewhere in one of the hundreds of papers you signed at closing I am guessing there is a statement puting you on the hook for any interest lingering. But worth testing by replying with a "why is this my problem and not yours - I paid it to you on time".
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Re: Title company requesting more money after closing?

Post by fujiters »

8foot7 wrote: Tue Oct 12, 2021 3:13 pm I would tell them they had the monies due per mutual agreement on the day of closing and disbursement was their responsibility, ...
Because the buyer didn't sign until October 1, they actually didn't have the money to pay the taxes on September 30, so I can see how this happened. However, it was known that the buyer was signing on October 1, so any interest fee should have been accounted for in ALTA Settlement Statement the title company prepared.
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fujiters
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Re: Title company requesting more money after closing?

Post by fujiters »

mary1492 wrote: Tue Oct 12, 2021 3:41 pm Something else you might check...I pay my property taxes online through my township's website. On the website I am able to check the current payment status for any property in the township. Does your county/township offer similar? If so, go in and check if the taxes have been paid for your property, the date of the payment, and how much was paid.
Yes, I have checked and it appears that no payments have been make at this point.
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8foot7
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Re: Title company requesting more money after closing?

Post by 8foot7 »

fujiters wrote: Tue Oct 12, 2021 3:58 pm
8foot7 wrote: Tue Oct 12, 2021 3:13 pm I would tell them they had the monies due per mutual agreement on the day of closing and disbursement was their responsibility, ...
Because the buyer didn't sign until October 1, they actually didn't have the money to pay the taxes on September 30, so I can see how this happened. However, it was known that the buyer was signing on October 1, so any interest fee should have been accounted for in ALTA Settlement Statement the title company prepared.
That is a good catch. Sounds also like something E&O insurance should cover then, not you.
The question to ask here is, what if you don't pay? What are they going to do? I'd test that some because from where I sit, their mistake, their cost. They don't really have any choice but to pay the fee and the taxes to the local government and I'm surprised they haven't at least made the principal payment yet; the real question is, can they be successful at recovering reimbursement from you? Like I said, I'd test that, quite a lot actually, to the point I'd ignore this and call their bluff. I don't think you owe the money and I don't think they can actually do anything to you. They certainly can't unwind the transaction. But I am more aggressive about not allowing other people to pin the consequences of their mistakes on my wallet. This board tends to cave in to these types of things; you'll notice that if you spend a lot of time here. Different strokes for different folks.

If you do decide to be helpful for some reason, under no circumstances should you pay a single cent of interest past whatever was due on October 1. The fact they haven't paid yet is entirely on them and there is no basis for accruals beyond 10/1 to be your issue.
Last edited by 8foot7 on Tue Oct 12, 2021 4:06 pm, edited 3 times in total.
exodusNH
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Re: Title company requesting more money after closing?

Post by exodusNH »

fujiters wrote: Tue Oct 12, 2021 2:57 pm We sold our home and signed settlement paperwork on September 30. The buyer signed on October 1.

Property taxes were part of the settlement, to be paid at closing. However, the property tax payment was due on September 30.

The title company just came back to us (12 days after signing, and after funds were wired to us) saying that there was an interest charge for the property tax (since they're paying in October, after the due date) and that we need to write them a check to cover it. It does not appear that they have paid the property tax bill.

Our view is that the amounts we agreed to are contained in the settlement paperwork. If there was an additional interest fee for late payment of the property tax, that should have been part of the paperwork (which would have caused us to deal with it before closing). Additionally, the title company charged the buyer a "Tax Verification Fee" (an amount larger than the interest payment).

What should we do? Pay it? Push back on title company? Ignore them?

Tangentially related: this title company has been a pain to deal with (mistakes over multiple drafts of paperwork, finalizing paperwork less than 24 hours out with new fees for things like remote signing, etc), so I'm somewhat biased towards making this hard for them, if only by waiting weeks before responding (next interest charge would apply on November 1).
I would ask them why it's your problem since you no longer owned the house at the time the interest accrued and that they had the money for the taxes at that time.

There is probably some paper that you signed where you agree to be helpful in the event of a small error. No idea if that pertains to this situation.
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fujiters
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Re: Title company requesting more money after closing?

Post by fujiters »

mary1492 wrote: Tue Oct 12, 2021 3:13 pm How much money are we talking about here? How many days of interest are they claiming there was?
It's around $70, so this is more a fight based on principle and exasperation that there are still issues arising from this company.

The taxing county adds interest on a monthly basis, so if we pay before October 31, no additional interest will be charged.
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Re: Title company requesting more money after closing?

Post by mary1492 »

fujiters wrote: Tue Oct 12, 2021 4:07 pm
mary1492 wrote: Tue Oct 12, 2021 3:13 pm How much money are we talking about here? How many days of interest are they claiming there was?
It's around $70, so this is more a fight based on principle and exasperation that there are still issues arising from this company.

The taxing county adds interest on a monthly basis, so if we pay before October 31, no additional interest will be charged.
As much as I agree with your thoughts and how you feel right now, I have to side with others on this - for the piddly $70, just pay it and be done. Demand title company provide receipt/evidence from the county that they have paid the property tax and interest charges.
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fujiters
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Re: Title company requesting more money after closing?

Post by fujiters »

8foot7 wrote: Tue Oct 12, 2021 4:01 pm
If you do decide to be helpful for some reason, under no circumstances should you pay a single cent of interest past whatever was due on October 1. The fact they haven't paid yet is entirely on them and there is no basis for accruals beyond 10/1 to be your issue.
Excellent point! I'm becoming much less fearful of delaying into November. Indeed, the threat of another month of interest may cause them to fold (and I'm sure the buyer won't be happy with them given the deed can't be transferred until all property taxes are paid).

In some sense I owe the taxes, according to the county, because the title company has failed to transfer the deed due to tax underpayment...but the title company surely wants to get this resolved faster than I do.
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8foot7
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Re: Title company requesting more money after closing?

Post by 8foot7 »

fujiters wrote: Tue Oct 12, 2021 4:17 pm
8foot7 wrote: Tue Oct 12, 2021 4:01 pm
If you do decide to be helpful for some reason, under no circumstances should you pay a single cent of interest past whatever was due on October 1. The fact they haven't paid yet is entirely on them and there is no basis for accruals beyond 10/1 to be your issue.
Excellent point! I'm becoming much less fearful of delaying into November. Indeed, the threat of another month of interest may cause them to fold (and I'm sure the buyer won't be happy with them given the deed can't be transferred until all property taxes are paid).

In some sense I owe the taxes, according to the county, because the title company has failed to transfer the deed due to tax underpayment...but the title company surely wants to get this resolved faster than I do.
I wouldn't be so sure about this. The buyer's lender would not allow funds to be released from escrow to be given to you until marketable title was delivered. (I have literally had to wait at an attorney's office while the paralegal went to record the deed at the courthouse; once the paralegal was back with the copy of the recorded deed, the buyer's lender allowed the sales proceeds to be wired to me.) While the county's tax records might not have been updated yet, I would bet large amounts of money and credibility that you no longer own that house, and whatever tax problem there is resides with the property, not you.

The buyer has the real bone to pick with the title company as they owe the tax payment funds on the house he owns now but didn't before.
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celia
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Re: Title company requesting more money after closing?

Post by celia »

Sounds like this is an escrow problem. Have the title company walk across the hall and talk to them. :oops:

I think you owe property taxes up to the day it closes as well as interest. And you likely signed escrow papers acknowledging that if the calcs were wrong, you would pay your share to make things right.

At least that’s what happened to me when I sold a condo that had been owned by a deceased relative in another state. The buyer’s loan wasn’t ready on the agreed on date and escrow closed on July 1 instead of June 30. A new property tax year starts on July 1. So I was charged a new half-year of property taxes and a month of HOA dues. But I was also immediately credited back about 181/182 of property taxes and 30/31 of HOA and was warned of this a few days before closing and the calcs were adjusted before I received the check.


I was also VERY surprised to learn that title and escrow are related in that state and each party can choose it’s own title/escrow company. So two days after I signed and overnighted my escrow papers and deed, I was emailed another set from the buyer’s escrow company which I was never expecting. (The final numbers were the same although the calcs were different.) Wow! That looks like there’s a lot of ways things can go wrong!

I’m glad that in California, the buyer and seller have to use the same escrow company (it can be negotiated when placing a bid to buy) and that the title insurer is a choice made outside of escrow.

I never understood why there can be two title insurers, each insuring part of the property. If there should be a claim down the road, are both insurance companies involved? That sounds like there is a possibility that one company could try to stick it on the other one.
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Nate79
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Re: Title company requesting more money after closing?

Post by Nate79 »

Who thought it was a good idea to have closing and property taxes due and paid on the same day?
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Watty
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Re: Title company requesting more money after closing?

Post by Watty »

fujiters wrote: Tue Oct 12, 2021 4:07 pm
mary1492 wrote: Tue Oct 12, 2021 3:13 pm How much money are we talking about here? How many days of interest are they claiming there was?
It's around $70, so this is more a fight based on principle and exasperation that there are still issues arising from this company.

The taxing county adds interest on a monthly basis, so if we pay before October 31, no additional interest will be charged.
If you used a real estate agent then ask them to call the title company to talk about it.

If they know that they will be risking not getting future referrals from that real estate agent, or that agent may recommend that future sellers not use them, they may back off.

Even if this was known beforehand it is not clear to me if you or the buyer would be responsible for it.

Or you could just pay the $70, leave them a bad review, and then get on with your life.
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Re: Title company requesting more money after closing?

Post by humblecoder »

When we sold our first townhouse, we had a bad experience because we closed near the property tax due date. Since then, I will do anything within my power to avoid that.

In a nutshell, our mortgage escrow account paid our quarterly property taxes about a week before our closing. However, when the title company did their due diligence, the payment hadn't posted at that time. Therefore, as part of the closing, they deducted the quarterly tax payment from our funds that we were supposed to get at settlement "just in case". They said that if it turned out that our mortgage company had already made the payment, the county would return the payment to the title company and then the title company would refund the amount to us.

As you can probably guess, it took many phone calls to the title company followed by a certified letter in order to get them to give us back our money. I am absolutely sure that if I hadn't been a thorn in their side that I would never have seen that money again.

From that point on, I have never scheduled a closing at or around the time of a property tax payment, since I never want to deal with that situation again.
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celia
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Re: Title company requesting more money after closing?

Post by celia »

fujiters wrote: Tue Oct 12, 2021 4:17 pm … (and I'm sure the buyer won't be happy with them given the deed can't be transferred until all property taxes are paid).

In some sense I owe the taxes, according to the county, because the title company has failed to transfer the deed due to tax underpayment...but the title company surely wants to get this resolved faster than I do.
Well now, this sounds like escrow hasn’t closed yet. Re-reading the thread, I notice you keep talking about the dates papers were signed but haven’t mentioned the closing date, which is the date ownership changes. [Signing dates are irrelevant.] If the deed hasn’t been recorded (check the recorder’s office ASAP), you could be liable if someone gets hurt on your property!!! In that case, it is in your best interest to help this close soon!!!

And don’t be surprised if you are asked to pay another month of property tax.

This is a very poorly-run escrow company.
WhyNotUs
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Re: Title company requesting more money after closing?

Post by WhyNotUs »

Life is short, pay the $70 and move on.
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Re: Title company requesting more money after closing?

Post by Silverado »

Life is short, ignore them.

(But not so short that you can’t update us….)
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Re: Title company requesting more money after closing?

Post by pizzy »

I pray I live to see the day that people make decisions based on the materiality of the expenditure and not the principle.

You wasted more time writing this post and reading the replies than the $70 is worth.

And it’s still not resolved.

Pay the one time (key words) $70 late fee and move on with your life.
Silverado
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Re: Title company requesting more money after closing?

Post by Silverado »

pizzy wrote: Tue Oct 12, 2021 6:14 pm I pray I live to see the day that people make decisions based on the materiality of the expenditure and not the principle.

You wasted more time writing this post and reading the replies than the $70 is worth.

And it’s still not resolved.

Pay the one time (key words) $70 late fee and move on with your life.
Nah, the OP standing firm helps shore up things for us in the future.

I pray I live to see the day that people refuse to be victims. Some of us just need some leverage.
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Re: Title company requesting more money after closing?

Post by cowdogman »

What was the closing date and when were the taxes due?

If you didn't close until after September 30 and the taxes were due on September 30 then any late charge should be on you.
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Re: Title company requesting more money after closing?

Post by indexfundfan »

The escrow company does not have a good system for handling the property tax.

I remember I had a similar situation selling a property. The escrow company made me pay off the property tax first and then they reimbursed me the buyer's portion of the tax.

In this case, the fault seems to be on the escrow company.
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Re: Title company requesting more money after closing?

Post by UpperNwGuy »

fujiters wrote: Tue Oct 12, 2021 4:07 pm It's around $70, so this is more a fight based on principle and exasperation that there are still issues arising from this company.
Pay it. Fights based on principle are usually not worth having.
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Re: Title company requesting more money after closing?

Post by indexfundfan »

OP states in the first post that the sale proceeds has already been wired to him ("funds were wired to us").

This has to mean that

1) the buyer's lender had funded the loan, and
2) the deed had been recorded.

OP no longer owns the property.
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Re: Title company requesting more money after closing?

Post by pizzy »

Silverado wrote: Tue Oct 12, 2021 7:01 pm
pizzy wrote: Tue Oct 12, 2021 6:14 pm I pray I live to see the day that people make decisions based on the materiality of the expenditure and not the principle.

You wasted more time writing this post and reading the replies than the $70 is worth.

And it’s still not resolved.

Pay the one time (key words) $70 late fee and move on with your life.
Nah, the OP standing firm helps shore up things for us in the future.

I pray I live to see the day that people refuse to be victims. Some of us just need some leverage.
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Re: Title company requesting more money after closing?

Post by TropikThunder »

pizzy wrote: Tue Oct 12, 2021 8:12 pm
Silverado wrote: Tue Oct 12, 2021 7:01 pm
pizzy wrote: Tue Oct 12, 2021 6:14 pm I pray I live to see the day that people make decisions based on the materiality of the expenditure and not the principle.

You wasted more time writing this post and reading the replies than the $70 is worth.

And it’s still not resolved.

Pay the one time (key words) $70 late fee and move on with your life.
Nah, the OP standing firm helps shore up things for us in the future.

I pray I live to see the day that people refuse to be victims. Some of us just need some leverage.
One of those little guy against the machine
I think those tend to end better for the machine than they do for the little guy.
pizzy
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Re: Title company requesting more money after closing?

Post by pizzy »

TropikThunder wrote: Tue Oct 12, 2021 8:16 pm
pizzy wrote: Tue Oct 12, 2021 8:12 pm
Silverado wrote: Tue Oct 12, 2021 7:01 pm
pizzy wrote: Tue Oct 12, 2021 6:14 pm I pray I live to see the day that people make decisions based on the materiality of the expenditure and not the principle.

You wasted more time writing this post and reading the replies than the $70 is worth.

And it’s still not resolved.

Pay the one time (key words) $70 late fee and move on with your life.
Nah, the OP standing firm helps shore up things for us in the future.

I pray I live to see the day that people refuse to be victims. Some of us just need some leverage.
One of those little guy against the machine
I think those tend to end better for the machine than they do for the little guy.
You don’t understand, you’re a victim if you don’t fight over scraps
Lalamimi
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Re: Title company requesting more money after closing?

Post by Lalamimi »

Amazed the title company did not make you bring proof you had paid the taxes. Another mark against them.
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Re: Title company requesting more money after closing?

Post by cowdogman »

indexfundfan wrote: Tue Oct 12, 2021 7:34 pm The escrow company does not have a good system for handling the property tax.

I remember I had a similar situation selling a property. The escrow company made me pay off the property tax first and then they reimbursed me the buyer's portion of the tax.

In this case, the fault seems to be on the escrow company.
If the scheduled closing date is close to the tax due date, it is proper for the escrow company to require payment by the seller of the property taxes--to avoid what (it sounds like) happened here.

I do agree that the escrow company does not appear to have handled this well, but if I were the seller I would have seen this coming a mile away--and paid the tax well before the closing and then been reimbursed for the pro rata amount at closing
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StevieG72
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Re: Title company requesting more money after closing?

Post by StevieG72 »

I would push back, it seems like the title company was negligent in preparing the settlement. It is reasonable to ask them to cover the shortfall.
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Re: Title company requesting more money after closing?

Post by TropikThunder »

StevieG72 wrote: Tue Oct 12, 2021 8:46 pm I would push back, it seems like the title company was negligent in preparing the settlement. It is reasonable to ask them to cover the shortfall.
OP still owned the property when the tax was due (Sep 30). How is this the title company's fault? OP said "property taxes were part of the settlement, to be paid at closing" but the buyer wasn't signing until after then (and the seller knew this). Who was the title company supposed to get the tax money from before closing?
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celia
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Re: Title company requesting more money after closing?

Post by celia »

TropikThunder wrote: Tue Oct 12, 2021 9:03 pm OP still owned the property when the tax was due (Sep 30). How is this the title company's fault? OP said "property taxes were part of the settlement, to be paid at closing" but the buyer wasn't signing until after then (and the seller knew this). Who was the title company supposed to get the tax money from before closing?
I explained a similar situation above where I was the seller. The escrow company is supposed to withhold the taxes from the proceeds, but then get reimbursement from the buyer for most of them.


It looks like the buyer’s fault for not having enough money to cover most of the seller’s additional property taxes.

It looks like the seller’s fault for not trying to get this resolved (expecting it will somehow clear itself up).

It looks like the title company’s fault for not seeing this upcoming lien on the house.

But it is mostly the escrow company’s fault for how they handle things and explain it to all involved parties!!!

Where are the realtors when they are needed? If OP has been paid, the realtors have also probably been paid.

Bad escrow company! Looks like they made multiple mistakes (Distributing funds early, not waiting for the buyer to bring more money to the table, properly explaining to both parties what impacts delays have).
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fujiters
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Re: Title company requesting more money after closing?

Post by fujiters »

Nate79 wrote: Tue Oct 12, 2021 5:08 pm Who thought it was a good idea to have closing and property taxes due and paid on the same day?
Closing was pushed back from the original date in mid September after the appraisal came in low, which caused the buyer not to get the expected loan amount and to need more time to come up with funds.

So, yes, terrible timing, but it wasn't the original plan
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DoubleComma
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Re: Title company requesting more money after closing?

Post by DoubleComma »

OP who owns the house right now? You? Buyer?

Buyer owns the house —buyers problem.

You own the house — your problem.

Either of you can chose to fight with the title company while fees continue to accrue and if you own the home so does your tax liability.

If I owned the house, I would pay and get the deal closed and be done. Sure I would be conceding the principal but protecting myself and capping my liability.
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8foot7
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Re: Title company requesting more money after closing?

Post by 8foot7 »

OP should check the county register of deeds to ensure that the deed transfer to the buyer was recorded. If that has been done, this is in no way the OP’s problem. It really is that simple. Any tax penalties or liens stay with the property, not the owner, and the new buyer needs to chase the title company to pay the tax debt with the money they already have in deposit.

Also there is no way to know (other than asking the buyer) but I wouldn’t be surprised if, since learning of their mistake, the title company was also fishing for the interest fee from the buyer as well and is just seeing who will bite first.

I am 99.9999999999% sure the buyers lender would never have let the title company release sales proceeds to the seller without the deed being recorded. If the funds were paid out prior to the deed being delivered, the lender has made an unsecured loan of presumably hundreds of thousands of dollars. They don’t do that.
Mr. Rumples
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Re: Title company requesting more money after closing?

Post by Mr. Rumples »

I had the same situation. It was less than $50, but the bill came from the county. It was a lot of finger pointing: attorney, title company, mortgage company and title company. The county waived the penalty and I paid, it wasn't worth the aggravation.
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bberris
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Re: Title company requesting more money after closing?

Post by bberris »

In the 500 pages of closing docs, (surely you read all of them) there is probably a provision protecting the title company from tax obligations. Of course they aren't going to sue for such a small amount, but legally I'm guessing they're entitled to it.
sureshoe
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Re: Title company requesting more money after closing?

Post by sureshoe »

Nate79 wrote: Tue Oct 12, 2021 5:08 pm Who thought it was a good idea to have closing and property taxes due and paid on the same day?
Exactly.

I was in a vaguely similar situation a while ago. I was closing in June and property taxes were due in July. Because it was within 30 days, they required me to make the payment early and verification submitted.
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hand
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Re: Title company requesting more money after closing?

Post by hand »

Not your house, not your problem.

As one who has also had to deal with a terrible title company, I am in the camp that it is worth fighting this on principle. Companies should be held accountable for their mistakes otherwise they'll never be motivated to improve. While it is easiest for the the title company (and you) for you to resolve their issue, they have no right and no leverage. Holding up the tax payment while they look for someone weak enough to absorb their $70 mistake is ridiculous.
sureshoe
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Re: Title company requesting more money after closing?

Post by sureshoe »

celia wrote: Tue Oct 12, 2021 10:48 pm Where are the realtors when they are needed? If OP has been paid, the realtors have also probably been paid.
And this is one (of several) reasons why you don't need realtors. People think they actually help do something and they mostly don't.
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cowdogman
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Re: Title company requesting more money after closing?

Post by cowdogman »

TropikThunder wrote: Tue Oct 12, 2021 9:03 pm
StevieG72 wrote: Tue Oct 12, 2021 8:46 pm I would push back, it seems like the title company was negligent in preparing the settlement. It is reasonable to ask them to cover the shortfall.
OP still owned the property when the tax was due (Sep 30). How is this the title company's fault? OP said "property taxes were part of the settlement, to be paid at closing" but the buyer wasn't signing until after then (and the seller knew this). Who was the title company supposed to get the tax money from before closing?
Right, seller knowingly defaulted on his tax obligations. Yes, the escrow company should have caught this and addressed it in the HUD--in which case seller would have had to pay the penalty as part of the closing,

Seller saying he shouldn't pay is like a bank robber saying he isn't guilty because the police didn't catch him until after he left the bank.
Dagwood
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Re: Title company requesting more money after closing?

Post by Dagwood »

fujiters wrote: Tue Oct 12, 2021 2:57 pm We sold our home and signed settlement paperwork on September 30. The buyer signed on October 1.

Property taxes were part of the settlement, to be paid at closing. However, the property tax payment was due on September 30.

The title company just came back to us (12 days after signing, and after funds were wired to us) saying that there was an interest charge for the property tax (since they're paying in October, after the due date) and that we need to write them a check to cover it. It does not appear that they have paid the property tax bill.

Our view is that the amounts we agreed to are contained in the settlement paperwork. If there was an additional interest fee for late payment of the property tax, that should have been part of the paperwork (which would have caused us to deal with it before closing). Additionally, the title company charged the buyer a "Tax Verification Fee" (an amount larger than the interest payment).

What should we do? Pay it? Push back on title company? Ignore them?

Tangentially related: this title company has been a pain to deal with (mistakes over multiple drafts of paperwork, finalizing paperwork less than 24 hours out with new fees for things like remote signing, etc), so I'm somewhat biased towards making this hard for them, if only by waiting weeks before responding (next interest charge would apply on November 1).
The house was yours on the date of the property tax due payment ("However, the property tax was payment was due on September 30"). You should have paid it then or dealt with the non-payment and the associated charge at the closing. Had it been paid, most municipalities would readily issue a receipt to show the title company so the correct closing entries could be made and you wouldn't have to be out both the payment and the closing charge. Pay the interest and the fees owed as your are liable for them or they may come after you, or may not.
Californiastate
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Re: Title company requesting more money after closing?

Post by Californiastate »

In typical board fashion, the BH keyboard heros propose you fight it and dig in for a Valley Forge. It's not their time, money or headache. $70 is cheap if you can't figure a way out of it in 30 minutes.
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