Abigail Buss…, Home Buyer in Oak Park, IL

What determines how much of a tax credit I'll have to pay at closing??

Asked by Abigail Bussard, Oak Park, IL Wed May 2, 2012

I'm thinking about selling my home, as it's paid off completely. I've been talking to other friends who have sold homes, and they told me that including the real estate commissions.....I'll also have to "credit" last years taxes, as well as a pro-rated amount of taxes for the months of 2012. I understand that if my home closed in say, August of 2012, I'd owe the seller January-July's worth of 2012 taxes at closing. My question is, and what point during 2012, would my 2011 taxes be paid in full, and thus eliminate the need for me to also credit this amount for last year to the buyer? Does it just depend on when the tax bill comes due and gets paid???

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Randy Schule…, Agent, Saint Charles, IL
Sun Aug 5, 2012

First of all, congratulations on owning a home that is free and clear of any mortgage debt. You represent a statistically small percentage of home owners Nationwide who own their home outright.

Secondly, you are responsible for the real estate taxes on your home up and until ownership changes hands on the day of your closing. Since in Illinois real estate taxes are paid in the arrears, you'll pay the remainder of your 2011 tax bill and most likely a proration of the 2012 tax bill that is not yet out but still your responsibility. A typical proration is 105% of the previous years tax bill. However, this is a negotiable aspect of the contract.

Call or text me at 224-805-2616 if you have further questions or need a full time real estate broker to help you with your sale and purchase of a new home.

Randy Schulenburg
Managing Broker
Mortgage 1st Realty, Inc.

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