Ask Angie: Can I Sell a House with Delinquent Property Taxes?

Dear Angie:

I just found out that my father hasn’t paid his property taxes in three years. 3 years! His mortgage has been paid off for 10 years, so I assumed he’d have no trouble paying for the upkeep of the property with his retirement funds. But, looking over the tax records, I realized that over the past 3 years property taxes have risen—and his limited income couldn’t keep up with the taxes and all his other expenses.. Unfortunately, instead of asking for help, he just didn’t pay.

My siblings and I discovered the issue with my father’s property taxes only because my father now needs to move into an assisted living facility. This means that we need to sell the house to help  finance his care. We listed it on the real estate market and found a buyer immediately. But, as soon as the we entered due diligence, we hit a roadblock because of these unpaid taxes. Our realtor explained to the buyer that we could close and use the proceeds from the sale to pay the taxes. But they chose to walk away, instead.

We need to sell this house, but my siblings and I don’t have the $10,000 to pay the taxes and fees upfront! And we don’t have time for another buyer to be scared off by these unpaid taxes.

What a mess. What do we do?

Sincerely,

Taxing Property Issues

Dear Taxing:

In the traditional real estate market, selling a property when the taxes are not up-to-date is workable, if you’re able to take the proceeds from the sale and pay the taxes at closing. But to do this, you’ll need to find a buyer who is willing to a) pay enough to cover what you owe (if anything) on the house and b) isn’t scared off by unpaid taxes. This can be a tricky proposition. Would-be buyers sometimes see unpaid taxes as a red flag regarding potential upkeep/maintenance issues with the property. The reasoning goes: if the owner doesn’t have enough money to pay taxes, what ELSE have they not had money to address? It’s enough to scare some buyers away.

You can, however, sell the house to an investor (like ABHCFL). When I look at a property, I consider the condition of a property, comps for the area, and the amount owed in taxes/liens. I’ll give you the best offer I can—including paying off delinquent taxes at closing. Then you can take the remainder of the proceeds from the sale however you’d like (in this case, paying for your father’s care).  

Consider this: if your father was unable to pay the property taxes, that may also mean he wasn’t able to keep up with maintenance on the property. Also, the house probably hasn’t been renovated to reflect current styles & tastes. Keeping these factors in mind, if you list on the traditional real estate market, have a home that needs renovation/repairs, AND is delinquent in property taxes, buyers are going to want a bargain basement deal on the house. Be careful, because you’ll still have to pay the taxes & late fees, the real estate commission, and the closing costs. You may end up with way less proceeds from the sale than you had anticipated.  

When you sell to ABHCFL, there are no real estate fees. And we pay the closing costs. That’s money that ends up directly in your hands, to spend where you need it the most.  

Don’t let delinquent taxes prevent you from selling the property. Call us at 407-603-6285, and I’ll come out and look at the property. Then we can discuss your options.  

Sincerely,

Angie

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