Results 1 to 7 of 7
  1. #1
    Join Date
    May 2009
    Posts
    2

    Default Who Pays Back Taxes for Property Bought After Foreclosure

    My question involves real estate located in the State of: Ohio

    I am looking at purchasing a property that has been foreclosed and is going to be sold at a sheriff's sale. There are back taxes owed on this property.

    1. If I win the auction, am I responsible for paying the back taxes, or does the seller pay them?

    2. If I am responsible for paying them, how long do I have to pay? The sale must be completed 30 days after the auction.

    3. The terms of the sale are 10% down on the day of sale, and the balance in 30 days. I havent talked with my bank yet, but is it a generally accepted practice that they will preapprove me for the loan, and give me money to put the 10%, or do I have to use my own money for that? Also, if the house appraises for 300k, and I buy it for 200k, it is generally accepted that I can get a mortgage for 220k and essentially have the back taxes rolled into the mortgage?

    I understand that some of these questions are probably easily answered by the banker, but I am just curious and would like to know before I go in this week to talk to them.

  2. #2
    Join Date
    Jan 2006
    Posts
    28,091

    Default Re: Who Pays Back Taxes for Property Bought After Foreclosure

    you will be purchasing the property with a tax lien in place and the amount of time to pay the taxes depends on the state it is in and how long the state allows taxes to be delinquent.

    the taxes are against the property, not the owner.

    3. The terms of the sale are 10% down on the day of sale, and the balance in 30 days. I havent talked with my bank yet, but is it a generally accepted practice that they will preapprove me for the loan, and give me money to put the 10%, or do I have to use my own money for that?
    the down payment is going to be your money. Most any bank is going to require some cash from you and 10% may be far less than what they require for a conventional mortgage.

    Also, if the house appraises for 300k, and I buy it for 200k, it is generally accepted that I can get a mortgage for 220k and essentially have the back taxes rolled into the mortgage?
    that is between you and the bank. This is the hard part about trying to use a mortgage to purchase a sheriff sale house. A bank is not going to loan money on a house without an appraisal. That doesn't happen overnight. They may also have other contingencies such as inspections of some sort.

    You would be best served by speaking with a banker before you get very far. It isn't as easy as it sounds.

  3. #3
    Join Date
    Mar 2009
    Posts
    327

    Default Re: Who Pays Back Taxes for Property Bought After Foreclosure

    You may want to see if the taxes were sold to an investor. I buy tax liens every year. So you will owe the taxes, fees, and interest as high as 18 percent and a short redemption period. A tax lien holder has 1st position over a mortgage company.

  4. #4
    Join Date
    May 2009
    Posts
    2

    Default Re: Who Pays Back Taxes for Property Bought After Foreclosure

    Thanks for the answers guys. Just to clarify, there are back taxes, but there is no tax lien. According to the RE attorney and the officer running the sheriff sale, the back taxes are paid out of the proceeds of the sale.

  5. #5
    Join Date
    Jan 2006
    Posts
    28,091

    Default Re: Who Pays Back Taxes for Property Bought After Foreclosure

    So, the buyer pays the taxes at the time of sale, yes?

  6. #6
    Join Date
    Apr 2007
    Location
    Southeastern Michigan
    Posts
    1,226

    Default Re: Who Pays Back Taxes for Property Bought After Foreclosure

    When I purchased my home four years ago, my attorney indicated that I would have to pay the $2K+ in taxes owed the city and a $500 delinquent water bill.

    I've trusted him for a long time so I hope he didn't steer me wrong.

  7. #7
    Join Date
    Mar 2008
    Posts
    1,995

    Default Re: Who Pays Back Taxes for Property Bought After Foreclosure

    I bought foreclosures during the last RE downturn, some at auctions.

    When I'm told it's sold "free and clear", then the bank pays all the back taxes. If not, then you pay the back taxes. When I ask bank sellers if it's "free and clear", it's a term they all understand.

    The home I live in now I bought at an auction free and clear for $210,000, but auction fees of 6% bought it to over $220,000. I searched the public records and found the guy next store bought his home from a bank at $215,000.

    Some time later, I met him, and remarked he did well buying at $215,000, and I paid over $220,000 for mine. He shook his head and said I did better. He explained there were $35,000 in back taxes he was not aware of, which he didn't know he was responsible for, and had to pay off. That bought his total up to $250,000. Unfortunately, he did not use an attorney or did title.

    Of course, for auction properties, there's no way you can do a title search as in many cases, you don't know what property you'll be buying if the public auction consists of a large number of properties.

    1. Sponsored Links
       

Similar Threads

  1. Bought County Tax Foreclosure Property With a Federal Tax Lien Attached
    By jerichobill in forum Buying, Selling and Conveying Real Estate
    Replies: 1
    Last Post: 08-16-2011, 07:34 PM
  2. Foreclosure: Who Pays Property Taxes on Foreclosed Property
    By jvbrooks in forum Real Estate Finance
    Replies: 1
    Last Post: 12-13-2010, 11:39 PM
  3. Foreclosure: Foreclosure and Property Taxes
    By ksquared76 in forum Real Estate Finance
    Replies: 1
    Last Post: 10-06-2010, 08:27 AM
  4. Bought Foreclosure with Car Left in Rear of Property
    By Eskwire in forum Personal Property
    Replies: 2
    Last Post: 10-13-2008, 07:11 AM
  5. Foreclosure: Bought foreclosure and property/belongings are still in house - what to do?
    By amiejerry in forum Real Estate Finance
    Replies: 1
    Last Post: 06-22-2006, 08:25 AM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
 
Forum Sponsor
Home Sales Contract
Everything you need to buy or sell a house, for all 50 states.




Untitled Document