Most first-time buyers don’t realize that the season of your closing can change how much you owe in tax-related costs. Closing in October is different than closing in November — and the difference could mean hundreds (or even thousands) of dollars.

Why Timing Matters

Property taxes are billed once or twice a year depending on your state. In many areas, they’re due December 1st for the upcoming year. That means the seller has already paid the bill last December for the current year (Jan–Dec).

At closing, you reimburse the seller for your share of the current year’s taxes. On top of that, your lender may collect some upfront escrow to prepare for the next bill.

October vs. November Example

Assumptions:

• Home price: $400,000
• Loan: $400,000 at 7%
• Annual taxes: $6,000
• Tax bill due December 1

Why the Difference?

• Seller Prorations: By November, there are fewer days left in the tax year, so you reimburse the seller for a smaller slice.
• Lender Escrow: By the time the next tax bill comes due the following December, you’ll have 12 months of escrow payments built up. That means the lender doesn’t need to collect thousands upfront — just a small cushion.

Why This Helps Buyers

Closing in the fall means less money needed at the table. Compare that with a July closing, where you might owe $6,000+ in tax-related costs (seller reimbursement + escrow cushion). By November, that same buyer could owe under $1,000.

That’s a huge difference for first-time buyers who are often strapped for cash.

House Karma Tip

If you’re flexible and buying late in the year, push for a November closing. The difference between October and November can still save you hundreds — and compared to summer, it can save you thousands.

Bottom line: The later in the year you close, the smaller your upfront tax hit will be. Don’t let the calendar surprise you — use it to your advantage.