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I'm in the process of buying this Foreclosed property and we did the title search and they found there is owed property taxes for the current quarter with the previous owner that was foreclosed by the bank.
The bank, represented by another RE agent says the bank won't pay or clear up that balance and they won;t give us an adjustment on the price.
In order for us to purchase this foreclosed property we would have to buy it and then transfer the title and then clear it up. Basically they won't do it and they won't adjust the price to reflect it.
I'm in the process of buying this Foreclosed property and we did the title search and they found there is owed property taxes for the current quarter with the previous owner that was foreclosed by the bank.
The bank, represented by another RE agent says the bank won't pay or clear up that balance and they won;t give us an adjustment on the price.
In order for us to purchase this foreclosed property we would have to buy it and then transfer the title and then clear it up. Basically they won't do it and they won't adjust the price to reflect it.
The taxes owed are around $3000.
The bank doesn’t have to do anything they don’t want to do. They may look at it and say “The buyer is getting a good deal and we (the bank) are willing to risk the deal falling thru versus paying another $3000”. Maybe they think you will pay it to get the property or maybe they don’t mind carrying it as REO if it falls thru. Foreclosures with delinquent taxes are not unusual. You need to decide if the price you offered plus $3000 is still a good deal for you.
What is the market value of the home you purchased? It is move in ready or does it require work to be habitable?
Depending on your purchase price, paying the additional $3000 for back taxes may not be a bad deal. Where I live (in California where housing prices are high), I see homes go to foreclosure sale roughly $100k under market value. So If I picked up a foreclosed home for $100k under market value, paying that extra $3k would be a no brainer.
Basically do the math. Market value vs your purchase price + any repairs needed + back taxes.
That $3000 was to owed taxes on the previous quarter. I think it will be another $3000 due by the time it's acquired. What my problem was the bank's agent said that I need to write a check for $3000 to the town before we can close. I'm not happy about that because why if the deal falls through and I'm out $3000. The agent assured me that if that happens they will credit me back. Why don't they just get pay it up so we don't have any lingering issues.
your agent is a loser, or worse. I have bought four foreclosures and taxes were always pro rated and paid from escrow. Sellers included HUD, Wells Fargo Asset Management on behalf of Duetche Bank, and Credit Suisse. Some states don't use escrow companies but I still say BS on that...what does your offer contract say? Never seen one where taxes weren't a line item.
I don't understand this. The owner, in this case the bank, needs to deliver clear title. Part of the foreclosure process is making sure title is clear so that property isn't tied up and unusable based on old encumbrances. The bank should be delivering clear title as a matter of course.
I don't understand this. The owner, in this case the bank, needs to deliver clear title. Part of the foreclosure process is making sure title is clear so that property isn't tied up and unusable based on old encumbrances. The bank should be delivering clear title as a matter of course.
That's what I don't get unless there's something else I don't know about the property. Did some research and there are more than 20 people listed with the address in the last 10 years. It needs some major renovation that I'm factoring into my cost to refurb it. The bank has been very difficult to deal with as I've asked for several things and they keep dragging things.
That's what I don't get unless there's something else I don't know about the property. Did some research and there are more than 20 people listed with the address in the last 10 years. It needs some major renovation that I'm factoring into my cost to refurb it. The bank has been very difficult to deal with as I've asked for several things and they keep dragging things.
I don’t think you can force the bank to do anything on a REO sale. If they don’t want to pay the back taxes then they won’t. I would not pay them out of closing (ie prior to closing). Make sure the title or escrow or attorney handling the closing pays them OR you can pay them after you become the owner. In either event, my experience with REO properties that have title issues is the the bank will sometimes agree to clear the title, other times they deliver title via a limited or special warranty deed that excludes back taxes. If the bank thinks you are getting a good deal, they won’t do a whole lot that costs them money. It’s then up to you to decide if you want the property on the terms the bank is offering.
That $3000 was to owed taxes on the previous quarter. I think it will be another $3000 due by the time it's acquired. What my problem was the bank's agent said that I need to write a check for $3000 to the town before we can close. I'm not happy about that because why if the deal falls through and I'm out $3000. The agent assured me that if that happens they will credit me back. Why don't they just get pay it up so we don't have any lingering issues.
Somebody is shining you on. The typical process is you deliver a cashier's check to the escrow company and it includes your purchase price, the taxes and any other costs that come out of escrow. When the deed is recorded the funds get disbursed separately to the seller and the tax agency.
This gets addressed in your purchase contract and in the written instruction to the escrow company.
Quote:
Originally Posted by chicagoliz
I don't understand this. The owner, in this case the bank, needs to deliver clear title. Part of the foreclosure process is making sure title is clear so that property isn't tied up and unusable based on old encumbrances. The bank should be delivering clear title as a matter of course.
Not true. Any property can be sold "subject to" existing encumbrances if the buyer is willing to purchase the property that way.
Quote:
Originally Posted by vision33r
The bank has been very difficult to deal with as I've asked for several things and they keep dragging things.
Banks are always difficult to deal with on foreclosures and short sales.
If you can't stand the heat, get out of the kitchen.
Not true. Any property can be sold "subject to" existing encumbrances if the buyer is willing to purchase the property that way.
But if the property already went through the entire foreclosure process and the bank obtained clear title, the taxes owed shouldn't be very old. It 's not really in the bank/owner's interest to let those encumbrances sit, because those could theoretically be claimed, as well.
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