How to Purchase a Tax Delinquent Home

[Matt Rivera]

A family member approached me about selling their paid off home to cover unpaid property taxes, 6 years to be exact. They were served papers a little over 4 weeks ago. According to the law office that's handling the suit they have about 10-12 months until foreclosure efforts begin.

My plan is to Seller Finance the home for 4 months to complete the rehab out of pocket then refinance it with a bank for a rental. 

I'm looking for any advice on proceeding with this and if I'm going about it the right way. Do I need to give them our agreed upon selling price and let them pay the taxes or are the taxes paid at title on the closing date before the home is funded? Do I need to offer them the agreed upon price minus the property tax bill and I cover the owed taxes?

Thanks

[Bruce Lynn]

If they got served it is possible 10-12 months, but it could be much faster, like 1-2 months.  Every county is different, every circumstance different, could even depend on how often the county has sales.  Some every month and some every quarter and some just one time a year.  I would not count on that 10-12 month figure.

With that in mind, if you want to buy it, you can buy it now, pay off the taxes, and they can owner finance the balance of the purchase price.  Sounds like you may be the one that has to pay the taxes at closing and your contract can reflect that, as well as any other closing cost if they don't have any money.  That will include title insurance, escrow fees, etc.

You should probably have an attorney at a title company help you write the contract so that everything gets covered.