Will My Lender Pay My Delinquent Property Taxes As A Part of My Short Sale?
The answer is maybe. It is not uncommon for a short sale seller in financial distress to have unpaid property taxes. During the housing boom, many lenders did not require tax and insurance impounds. And often, the first thing a homeowner will stop paying when they get into financial trouble - is their property tax bill. Many times the back taxes can just be deducted from the net that the lender receives from the sale - but the short sale lender has to approve it. And if the amount owed is very large, a lender may object to back taxes being deducted from the net amount they receive from the short sale.
Home owners who wish to complete a short sale of their Central Coast home should be aware that payment of their back taxes could become a sticking point in negotiations. In some cases, the buyer may be willing to pay the back taxes-- but their lender may object. In other cases, the buyer will simply object to paying your back taxes. After all, not many people want to pay other people's taxes. In addition, short sales have been back around the block for awhile now and savvy buyer's agents will be looking at your property tax record before writing an offer to determine if unpaid property taxes could become an issue in the short sale. So, it could deter a buyer from even writing an offer on your property. So, I do advise potential short sale sellers to stay as current on their property taxes as possible. Current taxes can make your short sale easier to successfully negotiate.
If you are considering a short sale of your Orcutt, Santa Maria, Arroyo Grande or Pismo Beach home, you should seek out an experienced short sale agent to guide you through the process. There are many pitfalls that can be avoided with the right upfront advice. If you would like a short sale consultation, please call my office to schedule a meeting or a telephone consultation at (805) 938-9950.
Tni LeBlanc is an independent Real Estate Broker, Attorney, Short Sale Agent and Certified Distressed Property Expert (CDPE) serving the Santa Maria, Orcutt and Five Cities area of the Central Coast of California.
*Nothing in this article is intended to solicit listings currently under contract with another broker. This article offers no legal or tax advice. Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement. Mint Properties is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.
Copyright© 2011 Tni LeBlanc * Will My Lender Pay My Delinquent Property Taxes As A Part of My Short Sale?*
And HOA fees. Here, anyway. The homeowner associations will send the bill to an attorney when 3 months late, the attorney will file a lien and charge up to $1200 for collections, which is also a lien. Then they file another lien in 3 months ..... it goes on.
Now the short sale lender has even more bills to pay and yes, that will affect the decision, just like back taxes.
Tni - OY VEY!!! Don't even get me started on this topic! While it's true that some lenders will cover the delinquent HOA's and prop taxes, there are others that won't. HOA's and county tax assessors offices are getting much smarter too (at least down here in LA & Ventura counties they are) about making sure they get their money too. Nowadays, it's much more common to see liens for these delinquent accts and these liens are dealbreakers. As you know, there isn't a lender in town that will fund a loan with an HOA or prop tax lien on it.
Good stuff Tni. Do you mind if I reblog? I know you have allowed it but I always like to ask anyway. :)
Virginia - So true I wrote another blog article about that. Check it out.
Donne- Be my guest, please re-blog! SB County hasn't started putting liens on property that I've seen. And I haven't seen that in SLO county either although I think they are more aggressive about revenue overall. HOAs are doing it all the time though now.
It's a precarious situation with these taxes in the way. Obviously the buyer doesn't to pay them and it is a lien on the property. Here in the SS's i've done they are all paid at close. The bank(the smart ones) are trying to get rid of the asset.
Robert -
You are so right - the smart banks will pay them. There seems to be two type if short sales. Ones that the bank wants and ones that the bank does not want. Trouble is you don't know which kind it will be until you get into it.
Tni