Home Buying in Corona>Question Details

Eileen, Home Buyer in 90805

I was told that when you close escrow on a home, you will or might get money back after a few months .... Is that true?? We are 1st time home buyers.

Asked by Eileen, 90805 Sat Mar 2, 2013

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There are 2 Possibilities off the top of my head. The first is if escrow padded the estimate of money for you to bring in right before closing, you'll get a refund for the difference.
The 2nd is the supplemental tax bill you get several months after closing when the IRS processes the sale and determines what your property taxes should be vs what they were for the previous owner. This maybe a refund if the previous tax base was higher or could be a bill for the difference if the purchase price was greater than the previous assessment.
0 votes Thank Flag Link Sat Mar 2, 2013
A great team of real estate professionals should be able to crunch your numbers so that you know (within a few dollars) how much money you will be needing to close your transaction.
You may receive a small amount of per diem interest or tax dollars, but it should be very minimal.

What I always recommend to any of my clients, is if you receive any amount of funds back from the title company or new lender, give me a call and we can discuss why.

The new impound account may have taxes collected for your new purchas amount but only have a tax bill for the old buyer's tax rate. This would cause a huge overage in your escrow account and a false refund sent to you. Those funds would actually need to be returned to the new lender to cover the supplemental tax bill that may be arriving to you shortly thereafter.

Whatever you do, don't spend the money until you know why you received it!
0 votes Thank Flag Link Mon Mar 4, 2013
As stated before, you will typically get a small refund from escrow when you close escrow as the buyer because of the padding of figures. Typically a few days after closing.

If you've closed escrow on your Long Beach home, you may expect a refund from your lender out of what's known as the impound account. The account used by your lender to pay for your property taxes and home owner's insurance. Any leftover funds from there will typically be refunded within 30 days of closing.

Your best source for the correct information on your individual circumstances will be your Realtor working for you. Make sure you get your own Realtor. The good news is, when you're a buyer the Realtor you choose works at no charge to you. Good Luck!

Ray Wright
Keller Williams Realty
Direct: 951-354-1303
Email: RayWright@kw.com
0 votes Thank Flag Link Sun Mar 3, 2013
Sometimes escrow pads the amount for you to bring into them before the close of escrow with several hundred dollars over but not always. Either you would get a small refund or none. You would receive that check at the close of escrow. Your Agent will ask if you want that to be mailed to you or your Realtor can deliver that to you personally.

Lydia Kray
Realty One Group
cell 951-733-1058

0 votes Thank Flag Link Sun Mar 3, 2013
Exactly what Carlene said ;)
0 votes Thank Flag Link Sat Mar 2, 2013
Hi Eileen ...

You might be thinking of a situation where the Seller of your new home credits money back to you, at close of excrow, for closing costs. This is done through escrow and you never actually see any cash. But, you don't have to bring as much money in to close the deal.

Any such arrangement must be negotiated at the time the offer is made. Often, a Buyer must actually pay more for the house ... maybe over the list price ... to compensate (hopefully only partially) the Seller for his "concessions. But the Buyer usually comes out at least a little ahead. Remember that the new tax bill will be based upon the total purchase price so your county tax base may go up a tiny bit in this case.

The only other thing I can think of would be the refund of your deposit on the home you rent now!

Marlene Prescott
0 votes Thank Flag Link Sat Mar 2, 2013
Typically during escrow, the buyer is estimated with a "pad" of around $500-$1000 to cover any unforeseen extras, due from buyer, at the time of funding the loan. Therefore, upon closing escrow, the buyer gets any unused portion of the pad refunded. It should be returned within a couple of days to a week, not months later.
0 votes Thank Flag Link Sat Mar 2, 2013
True, sometimes the buyer receives a refund for overages charged by escrow.
I've delivered checks between $100- $1800 in the past .

Jory Blake
Web Reference: Http://www.joryblake.com
0 votes Thank Flag Link Sat Mar 2, 2013
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