This episode reveals how pro-rated tax errors on a year-long Virginia property transaction inflated closing costs by $3,000+ due to misattributed ISD taxes and hidden parcel accounts.
Key Takeaways:
- Initial HUDs Are Wrong 50% of the Time Title companies routinely miscalculate taxes, fees, and prorations—the first draft has roughly coin-flip accuracy, making line-by-line verification essential before signing.
- Multi-County Properties Hide Tax Accounts The 40-acre parcel straddled two counties with separate tax accounts under different names—the title company double-counted one ISD tax ($1,600 error) and missed a 25-acre hidden account.
- Customer Service Gaps Cost Real Money The title company refused to provide documentation, claimed they “called” counties without proof, and took 90 minutes of back-and-forth to correct obvious errors—saved $1,300 but lost thousands from buy-side mistakes.
Listen to the full episode for tactics on catching title company errors before they destroy deal economics.
(Podcast transcript below)
Welcome to Get Serious, just a few notes on, again, continued lessons on being detail-oriented, especially when it comes down to the bottom line and reviewing various light items on HUDs you receive for closing. So we are finally wrapping up this close on a property that I think to the day we’ve worked on for a year, I think this might
Might take the record for the longest property that we’ve ever dealt with. It’s not like we held it for a year. We actually only held it for less than three months. It just took forever to initially close. Really messy title situation and then we should have even closed on the sell side even quicker. But there was more continued fights about
Undivided interest in the property even though we had an owner’s title policy that completely cleared all of that up with the same underwriter That the sell side title company Was using you know the the same on underwriter as our buy side Handled so eventually we got them to remove that but that just caused extra delay here And in this case
When we were reviewing the HUD to close, the pro-rated taxes seemed very high on it. I mean, this is an Ag property. It didn’t have an Ag exemption, but it had pro-rated taxes of like almost six grand for vacant lot further north of Houston.
and we also, and the thing that kind of complicated this lot is that it’s straddled to different counties, which added additional significant complexity besides just the messy title situation. One of the counties was much easier to work with than the other one. one was like far more rural and so you needed all this various back and forth. So they each had their own separate taxes and they kind of were divided, in regard to.
uh, you know, how the total acreage splits were accounted for. it’s like almost a 40 acre property. Um, and so when I was looking at this, you know, six grand of taxes here, it just, was almost twice as much as we were expecting. And even though we have like an anticipated very solid return on this and, we’re again, usually under the gun, as with most title companies, you only have your
Docs to review pretty much one day in advance if at best before a notary has to be scheduled and get docs into closing. So then it all of sudden, you it turns into kind of a fire drill to sort this out unless, you know, I really delay closing again, but then you risk the buyer and for, you know, what reason, but, know, it’s like a few grand to the bottom line. Like that’s at least worth taking a look at.
to ensure, is something really not proper here? Because I mean, there’s a number of times, mean, how often is the initial draft of the HUD 100 % correct? I would say it’s like roughly a coin flip in our experience. Like usually there’s something that needs to be adjusted. And in this case, like pretty substantial, like, you know, a few thousand dollars. Yeah, and especially in a difficult market, you know, it’s worth fighting for, you know, almost every penny.
Uh, when it comes to, you know, shifting your, your total net profits that you can receive on, you know, hard fought deals is one we’ve been working on for a year. And so we also looked at our buy side HUD and we had noted there was two separate line items for the pro rated taxes and they were substantially lower. Again, this was like only, you know, less than three months ago. Um, and that was credited to us fortunately, but.
It didn’t make sense that the pro-rated taxes that was going to be a debit when we sold the property was like over 2X as much. So we had to question them like what, it was only one live item. So it wasn’t even divided up into the two separate counties. So we pushed back on that and customer service here as a title company was just terrible.
Again, some title companies are, have been excellent to work with. We operate nationally, so sometimes it’s a grab bag. I don’t like outing by name, just, you know, sometimes they’re the only game in town and you kind of have to work with these folks. you know, the title companies are, are almost like a home services type industry. It’s like, you know, they can afford to have bad customer service. And sometimes if they’re the only folks around, it just doesn’t matter because you’re.
kind of at the behest of working with them. And so I inquired like, okay, this doesn’t make sense. Here’s our closing HUD from the buy side of this parcel. Like none of these numbers add up. Can you like just help break this down here? And then they responded.
you know, at least pretty quickly, but they were like, okay, such and such for this county is this amount. And by the way, there’s a separate ISD that has its own tax that is also added onto this specific county. And that’s all they said. And so like I followed up, you know, can they at least share some documentation or like showing this calculation, not just, you know, Hey, here’s a sentence of here’s the numbers. you know, and it’s several thousand dollars.
that seems way off. Can we just get some type of real confirmation on this? And again, title companies, they, by law, have to order tax certificates, at least in Texas, to cover their own ass. And that was also on the HUD. Technically we were paying for the tax certification to come in. So they couldn’t even provide that to us. So like it didn’t add up and like,
Then I was going to each of the county websites. brought in the land investor who worked with us. Okay, can we help sort this out? Like this doesn’t add up here. Like let’s come back to them with more data. Let’s even call the counties and get more of bottom line. And we went and we called the counties and we found out, yeah, okay, this ISD that was incorporated, that’s like just completely incorrect. It’s attributed to the wrong county in the first place.
The county that you attributed to doesn’t have anything to do with that. We have confirmation. Here’s the number. Here’s who we talked to. You can confirm. And by the way, this is also after, you when I asked shorter email prior of like, Hey, can you send over some documentation? Like their only response to the title company is like, we called over there. Like it’s just, it just grinds my gears so bad. this customer service so tough. how, how do you get away?
with, again, we already know the reason why they can get away with it, you’re only game in town, but I just, don’t understand why people don’t take more pride in serving their customers. Like it’s the lowest hanging fruit to stand out from any other potential competitor or way to build your business. just can’t stand it. Like ultimate pet peeve.
And our broker was getting involved. They asked for the tax certificates that again, we’re on the HUD and ordered and the title company was like, yeah, they requested, but are not in yet. And by the way, we’re anticipated to close like less than 24 hours by the time they’re sending this. And I know sometimes I’m sure you’ve seen if you’ve been in land business for a while or real estate in general, you might get a…
Refund from the title company later like the taxes were off and they’ll send a check later in the mail Usually it’s like a pretty nominal amount sometimes a little bit more substantial But you know rarely more than like a hundred bucks or something but in this case again We we thought you know, they were off on their tax calculation by like potentially a few thousand dollars And couldn’t display the proof
for it, plus they were charging us on the HUD for a tech cert that they did not even have in hand yet. It just did not, did not really add to our trust of their ability to kind of handle this. And so then, you know, I sent a longer follow-up again, hey, here’s who we talked to. This is the exact numbers they quoted. Like all of this is only adding up to, you know, roughly,
$2,500 for the entire year of 2025 across the two counties and you know not even accounting for like the roughly two and half months that we have to prorate the taxes so can you just like please explain this or you said you’d called them before can you call their office again and just like confirm this this is what we confirmed and then also IK my notary is arriving here in a couple hours like and again this is just
All of sudden this turns into a fire drill where you had a bunch of other tasks on my plate. it’s like, you know, fighting over a few grand. It’s like right in that middle area of what is worth the time. know, all of a sudden, like, you know, an hour, hour and a half of my day in total to deal with this is just eaten up by dealing with this tax situation. I can’t focus on anything else. Um, so like it’s a big hurdle that some of these just come up.
I’m trying to deal with it just because like we couldn’t get a straight answer from the title company. And then the, you know, the follow-up email after my longer follow-up was just like a revised HUD that did take off the proration for the roughly $1,600 of the ISD tax that they certainly misattributed to the wrong county. had that confirmation.
But zero other explanation and it still came back as higher by like still another like 1500 ish bucks that we were not sure why it was that high and we had called the counties. There was zero confirmation on why it should be that high. So like I again went back to them and just like, you know, can you not provide a better explanation than this? Can you not call the tax departments? Like we just called them.
We got different numbers. You guys are still not updating this. know, the tax cert that we’re paying for in the HUD, you don’t even have yet. Like, we’re not going to rush closing just, you know, until we have 100 % confirmation on the math. And then finally, they explained again, this is…
This was roughly an hour and a half since like all of this back and forth started. You know, they explained, okay, you’re conveying like the roughly 40 acres and the taxes that we had pulled was for a smaller subsection, like roughly 25, 30 % of the property that is within that ISD and one of the counties. And then,
Uh, there was an additional account that was not easily found. Like I still wasn’t able to find it on the, um, other counties website. Uh, but they did mention, Hey, like there was separate acreage, like still almost, you know, 25, 30 acres. That was a separate account that has its own tax wholly within that County. But like, it also didn’t have the original seller name. And so it wasn’t like, it wasn’t easy.
To be found when we were doing our initial research here and even the tax assessor department wasn’t helping us But then they were like, okay that amount for that separate acreage is this this amount and so that’s what gets us to like that full number and At that point it’s like okay still we’ll have to get the Texture but it’s at least enough of an explanation that and I could go back and confirm. Okay. Yeah, the acreage is didn’t
fully incorporate like the up to 40 acres, you may have called on that miss. Nevertheless, like it wasn’t, it wasn’t that easy to be found in the first place here. And it’s like, Hey, if you guys knew this right from the start, like if you had given me that, if you had given me that explanation with my first email, which is all we were trying to sort out, like that would have saved us all 90 minutes of back and forth and calling, cetera.
But you know, nevertheless, we still got like, you know, 1300 ish off the initial taxes we were supposed, you know, supposed to pay on the first time because then they just did sloppy work and double counted the ISD tax. And again, it still didn’t add up from the first tax credit we received for the prorations when we first bought the property. And that’s just another too little too late because that
First title company just missed the ISD tax that was supposed to be prorated. So we should have received when we close like another thousand dollar credit. But again, that’s sometimes just hard to confirm. And usually you’re paying more attention to debits as line items versus credits. Just kind of nature of the game here. I’m not like always double checking, especially in more complex tax situations like this.
And we didn’t, you know, that was just missed. so like, yeah, we’re not going to go back to the original seller and try to fight for an extra thousand dollars. That would not be, you know, likely to go anywhere. And it’s like too little, too little of money to, to kind of fight. But yeah, that, you know, introduces another Delta where we could have, you know, had a little bit more powder to work with from a net return perspective. And now we’re eating like a little bit extra tax. So.
Ultimately, it’s going to be like, I don’t know, a $2,000-ish hit compared to what our initial expectation was for the exit here, which is better than the 3K, 3 plus K that we had started with, that it was off by. So, you know, take the victories where you can.
But, you know, again, ultimately customer service issue, like you guys didn’t do your job from the start and you could have just provided that explanation right away and that would have prevented all of this back and forth. And like, yeah, I’m just like zero apology or, you know, sorry, we didn’t have this info before or, hey, sorry, we didn’t have the HUD initially, right? Here’s an, like, it’s just.
You can tell probably a lot of these folks working at Tyler like they did not like their jobs are low-paid Not really training customer service again. They don’t need to it’s kind of a power play Setup probably dealing with a lot of ornery Customers like myself that are just fighting about line items a number of times, know Sometimes justify like we were in this case So like I can understand from that standpoint, but it’s still like this does not
Engender any further trust like if I could avoid working with this title company again in the future like a hundred percent we we would say hey no way If we can avoid it, but again, like do you really try? You know create a bigger stink publicly outside of this and so again I’m skeptical because of the way our business is oriented where we have to operate across a larger footprint that you know if we start
you know, sending in some negative Google reviews and stuff like that. I’m just, I don’t really want to risk where we might have to work with this company again in the future to get even potentially worse service. or not able to like fully complete a deal, just because of, of this here. So it’s like, then you have to kind of bridge that gap. Like say how public do you really want to make this or just like, don’t take your business to them in the future. So.
Maybe you guys have some opinions on that. If I was just like a customer, a B2C client, just like buying a house, buying land, not outside of my business, then yeah, would leave a Google review, who cares? Because you’re probably like a pretty much a one-off for the most part. But I think as a business owner, you have to be a lot more cautious about leaving negative reviews.
At least that’s just my hesitation I would mention there. So nevertheless, this podcast should be pretty clear on how I felt about this situation. I’m sure you guys have dealt with things in similar fashion as well here, but hopefully this helps you, again, realize, double check the math every time, question any…
Fee that seems too high If it seems too low keep your mouth shut right like that’s That that’s the vice versa play but when it seems too high like just yeah Ask about it figure it out like plenty of times mistake like we found out in this in this situation When again dollars are hard to come back. So with that in mind Seriousland.capital for any of your funding needs Land Daily Diligence Facebook group just did one yesterday several pretty unique deals on that one really
pretty interesting West Virginia potential subdivide And then LandPricer.ai working on that more today here most reliable land pricing tool on the market with that in mind Subscribe and share talk to you all next time. Bye
