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When a property changes hands, the County Assessor will re-assess the property at the new market value. The County only sends out tax bills once a year, so they almost always have to send out a “supplemental” tax bill to reflect the higher taxes due for the period of time that the buyer owned it but paid taxes on the seller’s old value (this assumes the home sold for higher than the old value). The problem is that it can take a while for the County to update their mailing records. I always warn my sellers that they may get a supplemental bill in the mail after close of escrow that’s addressed to them, but it’s really for the new buyers.

HOWEVER, there are some times when that supplemental bill IS for the prior owner. This can happen when someone sells a home that’s less than a year or two old. The County can be somewhat slow to re-assess properties, especially when they are new homes. Depending when the County last reviewed your property, it could be assessed as bare land, or as having half a house built on it, even though you’ve been living in it for months. Eventually they will get around to assessing it for what you paid for it. But if you sell that home prior to that re-assessment, you may have a surprise coming. The title company will check the County’s records for what taxes are due, and you will close escrow thinking everything is all paid up. But then a few months later, you get a supplemental bill with a new assessed value, and therefore higher tax bill, for the time you owned the property. The title company didn’t “miss” it. The County can retroactively go back in time to correct the assessed value if it was too low.


You may hear ads blaring that you can refinance your loan at “Zero cost to you!” So you take them up on their offer but then you are surprised when you go to sign your papers and are told you need to bring money to the closing table. Are they ripping you off? Probably not. It comes down the difference between recurring and non-recurring closing costs.


When lenders advertise a “zero cost” refi, that usually means they are either going to directly pay for, or credit you that amount at closing, any one-time costs for that refinance. These are called “non-recurring closing costs” and are costs you only incur because you are getting a new loan. These would include an appraisal, escrow fee, title insurance policy, notary, etc.


What they AREN’T going to pay for are any “recurring closing costs” which are the on-going costs of owning a home and having a mortgage. These would be your property taxes, insurance, mortgage insurance, HOA dues and interest on your loan.


If you have impounds on the old or new loan, they don’t cancel each other out. Your old lender will hang onto those funds and then will refund them back to you when your loan is paid off. Meanwhile, your new lender may require you to pre-pay a month or even several months, depending when the bills are next due. Even if you don’t have impounds, your new lender may require you to pay your homeowner’s insurance for one year in advance. Plus you may have to pay interest through the next time your payment is due, depending what day of the month your refi goes through. It will all work out in the wash, even though you may have to brings funds in for your “zero-cost refi.”

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