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Past-Due Property Taxes And Home Sales: What To Expect On Both Sides Of The Sale

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Property taxes can be a bear for many homeowners, and in some cases, the homeowner may fall behind in paying the taxes. While most agencies have grace periods and procedures for things like extensions and payment plans, sometimes the amount is too overwhelming. If you need to sell your home, though, falling behind on your property taxes can create even more problems for you, especially if the government places a lien on your home. There are ways to deal with these past-due taxes and liens if you absolutely need to sell your home; one is to find a cash buyer who is willing to also pay the taxes, but if you can't do that, there's another option. 

Property Taxes Stay With the House, Not the Owner

You have to realize that property taxes stay with the house, not the owner. What that means is that if taxes are past due on the house when you own it and someone else buys the house, that new owner still has to pay the taxes. The county tax agency won't go after you; they'll go after whoever owns the house when they start sending notices. So you can see why a lien would be such a problem because you're basically foisting your tax duty onto another person. Past-due taxes, lien or not, need to be resolved before you sell.

Banks Don't Like Lending on Homes With Tax Liens

Not only would you have to deal with an upset new buyer if they received the tax bill that you were supposed to pay, but that buyer might not even be able to get a mortgage in the first place as banks really don't like liens. The liens have to be paid before the mortgage, so the bank wouldn't get any payments until the lien was paid off. You wouldn't be able to just sell your home and go off to do whatever you wanted unless you found a cash buyer who didn't need a mortgage.

Tax Negotiation May Help You Reach a Compromise

So, if you can't find a cash buyer, and you need to sell your home, you have to resolve the lien or tax debt. If you couldn't afford the taxes when they were due, though, paying them all off now could seem impossible. This is where negotiation comes in. A tax attorney could be able to negotiate a deal with the tax agency to get the lien removed and possibly adjust the tax amount. That frees up your potential buyer to get a mortgage while you get a possible break on the amount you have to pay (or at least get a longer time to pay it with smaller payments).

A real estate tax attorney can give you your options and discuss the best way for you to solve this situation. After the attorney negotiates with the tax agency, you can finalize your plans.