Can property taxes be settled?

14 Replies

Under what event can the city settle taxes?

For example, a lot was listed , I made the offer, contract executed, and right now I have it under contract for $7000 and the owner owes $5000 in taxes.. Currently the title company is doing the tax certificate process and he owes $5300 to be exact, Is it possible or likely to instead lower my offer to $2000 and settle the taxes with the city?

I know people do this with delinquent land owners. But not sure if this falls under that situation

If you have experience with something like this, please help. 

What is the value vs just paying 7k at closing and letting the title company pay off the debt with the same money. It works out the same, likely safer as well.

I’ve stopped tax sale by showing the city a copy of the contract, never got a discount for the seller as far as I can recall.

Highly unlikely. In Ohio, there’s not a chance, but don’t know which government you’re dealing with. I would expect that it won’t get reduced.

I agree that it is unlikely unless the property didn't sell at public auction and the county actually had to take title to the property. In SC it is titled to the county if no one wanted it in the name of Forfeitted Land Commission.

The taxing authority is not going to settle for less ... at this juncture.  That typically only occurs after the tax sale process fails and the lien(s) must be abated in order to transfer to a new owner. In your case the property is still above water. Seller should pay all liens at settlement.

I’m in Dallas and the lot is in south Dallas , very hot sub market.

@Levi T. Valued at $6,000, listed for $9,000, owes $5300, closing at $7500

@Bab Adetiba I don't think there is a chance they would discount the taxes. IF and only IF they were to do that, they would expect the owner to get zero out of the deal.  Why should they take a cut if the owner walks away with something.

what is your reasoning for trying to do this. i dont get it, the seller still gets procedes, you still get the lot free and clear... your concern should not be what the seller nets.

I guess it depends on what your time is worth.   I've never heard of this, but all things might be possible.  I'd try first at the school district.  Go in emails, letters, phone calls.  Take all your evidence.  I think your strategy is...look I want to get this property current, but it's worth X and we owe Y.   If you can take a reduction today, I can buy the house before it goes to foreclosure and you save the foreclosure expenses and risk of it going to the city if it doesn't sell.

They might be more interested if you want to increase the tax value, for example if you want to build a house on it.

Otherwise you have to wait until it goes through foreclosure and you never know when that will be and at what price.  Seems like a lot of these go back to City of Dallas for their landbanking program.   Just like your situation many people are underwater due to the taxes.

The other place you might be able to go is County Commissioners Office and/or some community advocate from City Hall to see if they would help you.

I really don't expect success with this, but that's some avenues you can try if you really want this lot.  Time is money though and that's the trouble with these lots.  Unfortunately lots of the prices don't make sense and by the time you can get a deal done finances don't work.  You think about purchase price, holding costs for 5 years, and then potential resale value, the returns vs your time are pretty miserable.  Too often the margins are just too thin for most people.

@Bab Adetiba
City will not settle on taxes, then it would set a precedent as well. Legally many jurisdictions cannot even discuss settling. If it was a fine or violation that could possibly be settled

Option is to pay it off - they possibly would accept a payment agreement but once it is sold they will want their $

Now I have a new problem.

After title search, it is revealed that in addition to the known back taxes, the seller also has mowing liens. Liens and back taxes combined is greater than the executed contract price.

I got my survey back and I’m ready to close but the agent is pushing me...this is a dual agency...about the purchase. Effectively, the agent didn’t do their best job representing the seller best interest and their short $2,000.

What are my risks? That the seller defaults on the contract and my option money is lost?

the agent is sort of suggesting that i back out and allow another higher and better offer to come In. I don’t want to follow this route and believe the seller will actually close.

Seller has a contract.  They may have to bring money to closing.  ...It has happened plenty of times before.  Seller's never seem to be too happy about that, but for this guy maybe it's worth it.  Bring $1500 to closing and get rid of that more more more lawn liens.   They should be happy you're buying it.

Stick with it....I would keep telling your agent you are going to close.  No matter what they say, you go to title and see if they will let you close your side.

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