I have a wholesale deal with my Aunt but she owes $7000 in back taxes on the home. The home is paid off and I wanted to know how should I let the buyer know that she owe taxes. Should I deduct the $7000 out of the sellers money to cover the taxes owed?
typically taxes are paid at closing from the sellers funds.
Buyer can also assume that taxes or pay the taxes themselves. It really depends on what everyone agree's too.
Deduct 7k from the sale price and the back end buyer can pay them and still have a good deal
I would share this info with my buyer, although they will discover it quickly with a little due diligence. Like @James Wise points out, this will be taken care of with a title co at closing. The last question I saw like this regarded a house only worth $8k. Any idea what this house is worth @Lekisha Cole ? Just curious. Thanks
@steve Vaughan Zillows Estimates its worth 126k
I hope you're not relying on that zillow estimate. I have found zillow to be very, very far off the mark in my area.
Zillow's "zestimate" is pretty much worthless. They have said themselves that it generally is 20% off one way or another and even counting for that 20% tolerance it is less than 80% accurate. You need to run comps off of actual sale data.
Ryan Dossey, Real Estate Agent in IN (#RB15001099)
Taxes are just like mortgages, or any other debt....they get paid out of the seller's proceeds at closing, with a straight sale. If you're doing a sub2, owner finance, etc., you may structure different.
How can I get estimates other than using zillow? @Wayne Brooks @Ryan D. @Richard C.
@Lekisha Cole zillow does have recently sold comps that you can compare the last 6 months of sales in the area. You would have to do that yourself. If you know an agent they could run the comps as well. If she owns the house free and clear ...... Why not do a cash out refinance and use the proceeds to pay the back taxes? She could give you some money for helping her and she may get more money out of the house this way and have money for repairs etc. Unless she just wants to walk away from the house,
Jerry Padilla, Lender in NY (#NMLS 1084877)
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