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What does this mean "Tax proration 100%"?

  • August 11 2010 - Buffalo Grove
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Answers (6)

It also means that if you are a company that are leasing property and there are other buildings on this property.   Base on the lease language, you would be responsible to pay or reimburse all of the taxes.
  • July 02 2013
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You are most likely seeing this verbiage on an REO listing.  The listing agent generally discloses this info in the MLS remarks.....Taxes are paid in arrears (this years RE taxes are actually for last year). We always assume taxes are going up each year so on a fair market transaction, agents will typically write in the contract taxes pro-rated higher than 100% so the buyer is compensated for the higher bill that will come out next year...in a distressed sale the buyer will still get the taxes pro-rated to the day of the closing but the bank will not pro-rate beyond 100% of the most recent full tax year.
  • February 27 2011
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Philip's answer is correct.  In Cook County, the seller will owe you a credit at closing for the taxes that haven't been paid yet.  It is a guessing game since we don't know if or how much the taxes will go up from year to year, so as buyer's agents we usually ask to have the calculations based on 110% of last year's bill to build in a cushion against possible increases.  Foreclosures and short sale properties generally will not credit taxes on anything more than 100% of last year's bill.

Make sure you have an experienced Realtor working on your side when purchasing a property -- it will cost you nothing out of pocket but will end up being very valuable for you in the end!

Laurie Christofano, Realtor, Buyer Specialist, SFR (Short Sales & Foreclosures Resource Specialist)
The Pych Team, Oak Park's #1 Pick for real estate
RE/MAX in the Village
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  • August 12 2010
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My answer was bad disregard it -- it is arrears not advance.  Thanks Philip.
  • August 11 2010
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In cook county we pay R E Taxes in 'arrears'. If the closing were held tomorrow, since we only know what the 2008 taxes are, the seller gives the buyer a credit for the 2009 & 2010 taxes at the closing based on what the contract calls for. Here in the city we usually ask for 110% credit and in the burbs it's common to ask for 105%, because the taxes might go up before they are actually due one or two years from now. It's all negotiable, but in a foreclosure the bank demands only 100%. They do not care if the taxes might go up. That is all they are willing to credit you at the closing.
When the taxes are due, the buyer (new owner) pays them because they were given the money as a credit at the closing. If the actual taxes turn out to be higher than what was credited........too bad.......

philip
  • August 11 2010
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Most likely means you have to pay the taxes that have already been paid by the seller in advance.  Any taxes that were paid for taxes owed after settlement will be reimbursed by the buyer.

Best

Eric
  • August 11 2010
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