How to Sell a House When You Owe Back Taxes
Hey all, Carter here with CB Home Solutions and today we’re going to be discussing how to sell a house if you owe back taxes. What you need to know is you can sell your house even if you owe back taxes on the property, meaning you’re delinquent on your property tax bill. Throughout this blog post I am going to show you what scenarios that you might encounter when you look at selling a property when you owe back taxes.
Home Equity When You Owe Back Taxes
So first things first, when you’re looking at selling a property if you owe back taxes you need to ask yourself, “Is there enough equity in the property? I’ll give an example here for story purposes. Say your house is worth $100,000. You owe $95,000 on it but you owe another 20,000 in back taxes. So adding that all up your bottom dollar for you to break even would be 115,000 just because you’re very far behind on taxes and your house is only worth 100,000. Because you are “underwater” on the property meaning you owe more than it is worth you either have to try and negotiate a short sale or come to closing with the excess funds. So in that particular scenario you may want to talk with a short sale specialist and decide about doing a short sale or not doing a short sale. Or if you have the funds to bring to closing then you can go about it in that regard. That is the strategy when you own more than the house is worth.
What about a house with no Mortgage?
Let’s say the house is paid off, you have zero mortgage, you have no payments whatsoever besides your property tax bill. For whatever reason maybe you’ve fallen behind one, two, three, four years in your property taxes and you just cannot catch up now. So what are your options? Well, you can list it on the market if the house is in good condition and get a normal retail price for it. If the house is a little rundown, it’s an ugly house and it needs a little bit of fixing & repairs then you might want to consider selling to a we buy houses company like ourself here at CB Home Solutions. And we can close the property within as little as two weeks or we can push it out to whatever timeline you’re hoping for. Just because you owe back property taxes does not mean you cannot go the traditional route with selling your home. However, if you want the convenience of selling to a we buy houses company then click here.
Let’s say the property is vacant, it’s paid off, but you owe four years behind in back taxes and now the municipality, or the county is coming after you because they’re about to do a tax foreclosure on you. So what does that mean? Well, with the tax foreclosure they’re going to foreclose on you just like a normal lender because you haven’t paid your property taxes. And the bad part about that is they’re going to take the property back. So say you owe 15,000 in taxes, they take the property back, you don’t get anything regardless of how much equity you have in your house. The house might be worth $150,000, but when the municipality forecloses you don’t get any of that & then they will sell it & collect the difference. Please DON’T let this happen!
So, what is the better option in your mind? Is it selling to a we buy houses company like ourselves, getting a fair cash offer for it, closing within 14 days? Or is it letting the municipality take it back, you don’t get anything, and then you’re out of debt with them, but you’ve lost tens or hundreds of thousands worth of equity in your property.
How Can We Help If You Owe Back Taxes…
If you want an as is cash offer on your property, fill out the form down below or give us a call on our office line. 920-215-4201 We would love to have a conversation with you. We buy houses throughout Appleton, Wisconsin and surrounding areas, we go from Green Bay all the way down through Milwaukee. So feel free to reach out. We’d love to help you. Again, fill out the form down below and have a great rest of your day.