Post-settlement refund check from title company

[Anonymous]

I closed in late October on a new construction townhouse. I arrived home today to a surprise check in the mail from the title company for nearly 4k. I'm not clear on what the refund is for, but in short, it appears that an overpayment estimate was made re: supplemental/reassessment tax funds.

In the letter, the title company said that the lender instructed the title company to refund it to me. Does anyone know what this means and what, if anything, I should do with it besides deposit it? I want to make sure it's not money being turned over to me to pay something owed elsewhere.

[Anonymous]

The local jurisdiction often has not done a tax assessment of a new construction property. When you went to closing, the builder may have directed the settlement company to withhold a large amount of money from you to pay the taxes when the property was assessed. The property may now have been assessed and you paid too much. The builder has directed the settlement company to refund the money to you.

To be absolutely sure, ask the settlement company

[Anonymous]

Anonymous wrote:The local jurisdiction often has not done a tax assessment of a new construction property. When you went to closing, the builder may have directed the settlement company to withhold a large amount of money from you to pay the taxes when the property was assessed. The property may now have been assessed and you paid too much. The builder has directed the settlement company to refund the money to you.

To be absolutely sure, ask the settlement company

Op here, apologies-- the settlement company is the issuer of the check/letter.

[Anonymous]

Oh jeeez, it's your money just deposit it! This is not an uncommon thing to have happen. We've bought and sold probably 4 houses over the years, and I think this has happened each time.

[Anonymous]

Yeah don't overthink it, you can safely deposit it. This is pretty common. I just got one myself on a house I closed on in May. (It was for $1.75 lol. Drinks are on me this weekend. )

[Anonymous]

The check may have come from the state. Often times escrow over payments and interest over payments and other funds are funneled back to the original buyer at the time of closing. If it comes from the title company or if it comes from the state, it’s good to cash.

[Anonymous]

Don't spend it until you know it's not a mistake.

[Anonymous]

Deposit it, but I suspect you’ll get hit with a larger-than-usual escrow hike in one year once the property tax issues are finalized. Escrow may go up by $200+ per month next year once everything is known.

New construction conversion from vacant land to a building might take a while for the city to update the zoning status on the tax rolls.