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happytobreathe
The Lazy Days of Summer
Member since 10/06 1413 total posts
Name:
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Short Sale with back taxes....HELP!
THANK FOR EVEN LOOKING!
My DH and I put in an offer on a short sale. Nothing came up on the title search until now. Basically, we were approved all ready to go for the short sale, and now we find out that the sellers owe 16k in back taxes.
The seller's agent is saying if we go up in price she will have more room to negoiate with the bank. She is also saying it will take time because they switched servicing companies.
I want this house,...bad. But, I don't want to wait forever,....ok I would but only if it was a reality that we will get it.
Any thoughts....opinions...experiences....
Should we just move on?
BUT I LOVE THE LOCATION!
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Posted 3/19/10 8:13 PM  |
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Prudential Douglas Elliman Real Estate
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Re: Short Sale with back taxes....HELP!
Friends of ours recently purchased a home through a "short sale". While I didn't hear anything about back taxes, I know that the sale ended up dragging out literally about 6 months.
I believe the sellers were going through an awful divorce and had huge financial problems.
They finally ended up getting the house, but had sold theirs in the meantime so had to move in with family.
It seems like they did get a good deal though-----nice area, good school district, home was a decent price.......
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| Posted 3/19/10 8:25 PM |
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happytobreathe
The Lazy Days of Summer
Member since 10/06 1413 total posts
Name:
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Re: Short Sale with back taxes....HELP!
Thank you for your thoughts...we hope! But the IRS is scary!
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| Posted 3/19/10 8:39 PM |
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MeNSte
LIF Infant
Member since 2/10 146 total posts
Name:
Melissa
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Re: Short Sale with back taxes....HELP!
we almost went for a short sale but it turns out there were 2 mortgages out on the house and there was a lot of red tape we would have had to go through. but if you really really love the house then try for it!!! but know you may have to put in more $ than you offer. if its the right house its worth the wait and stress!!!
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| Posted 3/19/10 8:57 PM |
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alli3131
Peanut is here!!!!!!
Member since 5/09 18388 total posts
Name:
Allison
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Re: Short Sale with back taxes....HELP!
Posted by happytobreathe
Thank you for your thoughts...we hope! But the IRS is scary!
Its not the IRS its property taxes that it owed Im assuming. IF the property taxes aren't paid the town/county can come and seize the property and sell it from underneath you. They basically foreclose on the property based on the back taxes.
Do not buy the house unless the seller takes care of the taxes......plus I would think your bank will not give you the mortgage with the back taxes out there because the bank will take a huge loss if the town forecloses on the taxes.
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| Posted 3/19/10 9:16 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Short Sale with back taxes....HELP!
Normally the bank will go ahead and pay the taxes when the owner doesn't- to protect themseleves from losing the house to a tax sale
This $16k is back property taxes owed to the bank or the town/county?
If it's owed to the bank and they approved the price- then you are all set
Or is it a tax lien from the IRS for not paying income taxes? That is much tricker and not sure if there is much that can be done besides paying them- that's why they put the lien
If it's on the title and not cleared- then you can't get title ins and you won't get a mortgage with out paying it and clearing the title
Next month the short sale rules change- it won't be like this anymore- if you need to short sale your house - you will get the price from the bank before listing and you are going to have to use a short sale certified agent to list it
Message edited 3/20/2010 8:17:22 AM.
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| Posted 3/20/10 8:14 AM |
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happytobreathe
The Lazy Days of Summer
Member since 10/06 1413 total posts
Name:
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Re: Short Sale with back taxes....HELP!
Thank you ladies!
It is a lien for back taxes to the government, not the bank. So if we want the house we have to pay back taxes???
Anyways,... I love that the there will be no rules for short sales. IT IS A GREAT IDEA!
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| Posted 3/20/10 10:12 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Short Sale with back taxes....HELP!
Someone is going to have to pay the taxes and clear the title
I don't think I would be paying the sellers tax debt
What does your lawyer say?
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| Posted 3/20/10 10:24 AM |
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happytobreathe
The Lazy Days of Summer
Member since 10/06 1413 total posts
Name:
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Re: Short Sale with back taxes....HELP!
My lawyer said walk away----far away! But,... it still would be a good deal!
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| Posted 3/20/10 7:35 PM |
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alli3131
Peanut is here!!!!!!
Member since 5/09 18388 total posts
Name:
Allison
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Re: Short Sale with back taxes....HELP!
Posted by happytobreathe
My lawyer said walk away----far away! But,... it still would be a good deal!
I agree with your attorney.....there are other good deals out there.
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| Posted 3/20/10 10:08 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Short Sale with back taxes....HELP!
Posted by alli3131
Posted by happytobreathe
My lawyer said walk away----far away! But,... it still would be a good deal!
I agree with your attorney.....there are other good deals out there.
Exactly...you hired an attorney for a reason
If my attorney told me to run away- I would
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| Posted 3/21/10 8:30 AM |
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bbanana7
LIF Toddler
Member since 4/09 404 total posts
Name:
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Re: Short Sale with back taxes....HELP!
we purchased a short sale and there were back taxes to the town and it took us about 8 months to settle all the paperwork--however we LOVED the house.. and we got it at a great price, great area, great SD... so it was worth the wait.. however it was an emotional rollercoaster.
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| Posted 3/21/10 8:51 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Short Sale with back taxes....HELP!
Posted by galgirl
we purchased a short sale and there were back taxes to the town and it took us about 8 months to settle all the paperwork--however we LOVED the house.. and we got it at a great price, great area, great SD... so it was worth the wait.. however it was an emotional rollercoaster.
This is not the same situation...this is an IRS tax lien
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| Posted 3/21/10 9:04 AM |
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happytobreathe
The Lazy Days of Summer
Member since 10/06 1413 total posts
Name:
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Re: Short Sale with back taxes....HELP!
Posted by Beth
Posted by galgirl
we purchased a short sale and there were back taxes to the town and it took us about 8 months to settle all the paperwork--however we LOVED the house.. and we got it at a great price, great area, great SD... so it was worth the wait.. however it was an emotional rollercoaster.
This is not the same situation...this is an IRS tax lien
All we know is he has 16k in back taxes to the government... so is it different?
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| Posted 3/21/10 10:40 AM |
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bbanana7
LIF Toddler
Member since 4/09 404 total posts
Name:
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Re: Short Sale with back taxes....HELP!
Yeah I see it is different, just wanted to point out that with any back taxes there is a lot of paperwork to be done
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| Posted 3/21/10 1:18 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Short Sale with back taxes....HELP!
Posted by happytobreathe
Posted by Beth
Posted by galgirl
we purchased a short sale and there were back taxes to the town and it took us about 8 months to settle all the paperwork--however we LOVED the house.. and we got it at a great price, great area, great SD... so it was worth the wait.. however it was an emotional rollercoaster.
This is not the same situation...this is an IRS tax lien
All we know is he has 16k in back taxes to the government... so is it different?
Very different....if it was property taxes the bank would have paid them and it would be handled a lot easier- no bank is letting a house go to a tax sale- you would not have a lien for back property tax- you would have a negative escrow account
This is a tax lien- which is why your attorney is telling you to run away- it could take a very long time to fix and clear the title
With out a clear title- no title insurace
With out title insurace- no mortgage
Obviously these people are in serious finacial trouble - even if they foreclose on this house it's going to be a nightmare to get it listed by the bank with this issue
Who knows when the last time they paid taxes was (income) and they could owe more that hasn't been attached to the property yet- which your attorney is probably fearful of- so let's say they clear the title of the $16k and then another lien gets attached.....oy!
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| Posted 3/21/10 2:44 PM |
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