Joakes, Yup!! Death and Taxes--two absolutes! Can't get aroud either one of them as in the end you will pay! The biggest issue is the arguement you'll have with the Tax Assesor's office on the "Trend" in the neighborhood. One REO in an otherwise stable neighborhood is going to be a tough one to appeal to the Tax Guys vs. a neighborhood where 90% of all sales are foreclosed homes!
I've got a great interview with Bill Rouseau of the Assesor's Office on my rado show blog. I taped and video interview with Bill who discussed indepth the tax problems they are currently facing. Revenues are shrinking and the "distressed" sales they so heavily discount are now the lay of the land in many a neighborhood and ARE the new Comparables!! Go to: http://www.MikesRealEstateShow.com and look for the video images to the left and you'll see Bill in our KSRO,1350AM studios. It's very revealing!

For the real scoop right from the horses mouth call the Sonoma County Tax Assesors office at 707-565-1888, you'll get a REAL person to ask questions to and they are very friendly and helpful in my experience.

Yes, you have to pay that amount and yes you will get a refund. I believe most counties have this set up automatically. I do not beleive they will write you a check but they will apply it to your next payment. I am in San Mateo County and it takes 4-6 months to occur. Check with your county tax collector how it is processed in your county, Congratulations and Good Luck!