Buying From A REO - Posted by ht_tx

Real Estate Investing
1

Posted by Hope (Fl) on August 02, 2003 at 20:15:58:

Seems like you got a great deal. Dont worry about the back taxes; you will not pay them. The bank will pay it and prorate the current years taxes. This will all be done at closing.

We recently closed on a loan where the people also owed 3 yrs. back taxes as well as city liens on the property. It was all paid by the seller at closing.

2

Buying From A REO - Posted by ht_tx

Posted by ht_tx on August 02, 2003 at 18:40:12:

I am a new REI and have a deal made with a REO. They’ve accepted my contingency in the offer for addendum review, inspection, financing (which is no problem for me) approval, and final appraisal. What I didn’t think about was back taxes at closing? There is language in the deal about prorated taxes, but my assumption was that it was for the current tax year only. Am I liable for the back taxes or is the REO covering it?

Here’s how the deal looks:
House built in 1999
Earnest Money: $250.00
Purchase Price: $239,000.00
Comps: $360,000.00
Repairs: $5000.00
Closing: 60 days
Area of town: Great and new construction all around

After looking at the appraisal records, I see the taxes are delinquent for $9500.00.

Would anyone comment on my exposure?

Thanks…

3

Re: Buying From A REO - Posted by Sean

Posted by Sean on August 03, 2003 at 23:57:43:

If they have not already been paid by the bank, they will be paid from the closing proceeds. You are not responsible for them, the seller is. Unless your agreement to buy explicitely states you are going to pay the back taxes, its not your problem.