How do licensees verify property taxes during closing?

• A. Guess based on last year's taxes.
• B. Wait for the seller to provide a tax bill at closing without verification.
• C. Obtain tax certificates or statements from the municipality; verify current tax amount and outstanding balances; adjust accordingly.
• D. Use mortgage lender's estimate for taxes.

Answer: (C)

The key idea is to verify taxes using official municipal records and adjust the settlement accordingly. Tax certificates or statements from the municipality show the exact current year’s tax amount, any outstanding balances, and whether there are delinquencies. With that verified information, you can prorate taxes between the buyer and seller accurately and reflect the correct amounts on the closing statement, protecting both parties from surprises.

Relying on last year’s taxes can be misleading because tax bills often change with reassessments or rate changes. Waiting to obtain a tax bill from the seller at closing without verification risks missing current delinquencies or updated assessments. A lender’s tax estimate, while helpful for planning, is not a final figure and may differ from the actual bill. The tax certificate approach provides a precise, up-to-date basis for the final settlement, which is why it’s the best option.