How to Calculate Past Due Property Taxes for the HUD-1

"Why would we want to find the tax assessor records for a property?" you may ask. ANSWER: To prepare the HUD-1 before sending it to the short-sale lender. For example, a homeowner may be 2 years past due on their property taxes, but you fail to list the past-due taxes on the HUD-1. Then the short-sale lender approves the HUD-1 as WRITTEN. So you go to escrow, the title company runs a preliminary title report (AKA "prelim") and you find out that $10,000 is owed in property taxes.

Now the short-sale lender (bank) won't approve any deduction in their "net" proceeds as written on the HUD-1, so now you're in a quandry. At this point, the choices are:

  1. You can pay the extra $10,000 that was not accounted for (no commission for you, eh!)
  2. You can ask another party to pay it ~ good luck with that
  3. The deal falls apart and the buyer walks away (this is the most likely scenario)

Lesson learned: whether you or someone else (such as an Escrow Officer or a professional Negotiator) are preparing the HUD-1, research the past due property taxes and include them as a SELLER payment.

Thanks to our friends here on our Short Sales California network, here are some links to commonly-researched tax assessor offices:

If you have any more, be sure to add to this list with a comment below!

Thank to Donald Holman for this tip: You can also look up the State Board of Equilization on the internet and view the list of phone numbers for every Assessor Office in California. The California County Assessors are monitored by the California State Board of Equalization. The Board website lists all California County Assessors. To find a county assessor:

  1. Google " California State Board of Equalization"
  2. After entering the site, simply type in "'California County Assessors."
  3. The list with every County Assessor in California will pop up.
  4. Click on the line for the Assessor you are looking for and his/her website will appear.

    http://www.boe.ca.gov/proptaxes

Thanks everyone for your contributions to these stellar sources!

Regina P. Brown

California Real Estate Broker

DRE # 00983670

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www.ShortSalesCal.com

We are a free site with lots of tips and resources specifically for the California Realtor and real estate pros!

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