I am looking at wholesaling in my area and wanted to know how to find and put under contract a property that has taxes owed. This is not going to be my "niche" but I just need some information if and when I run into a seller that has a tax issue who wants to sell, I hate to get a deal done then find out I will lose money because I was unsure.
So that I am not to confused on tax liens, here is what I understand them to be in a nutshell. I am in Baltimore county, Maryland
Home owner is in arrears on taxes. When will the county/state put the lien on it?
County /state will then sell property for the owed tax amount. ?
How would I make an offer on it? If they still have a mortgage due?
Offer to pay taxes then an offer to get under contract?
running into similar back tax issues on my first wholesale deal I am working as we speak. There are 15k back taxes owed on the property. I negotiated with the seller an offer of 19k which they accepted. Part of the agreement stated that the 15k in back taxes would get paid from the purchase price of 19k therefore leaving the seller with 4k cash in their hands.
This property is owned free and clear but if there was a mortgage you would have to make sure your offer price covered this as well (unless the seller wanted to bring money to the closing table which I do not think would happen).
@Keith Belzner the lien is automatic when taxes are owed. The property cannot transfer without the taxes being paid (and water bills and other misc city junk bills).
The city or county does not "Sell the property" for taxes owed. In Md they sell a lien against the property. The lien holder can then file a foreclosure to take the property. This process typically takes a year or more.
Normally when you buy a property, the contract says the seller provides "free and clear title" or similar language which means that the taxes get paid at settlement from the seller proceeds. The title company takes care of paying the bills.
If there is a tax lien or even a tax lien foreclosure, they simply get paid of at settlement.
Generally you always simply offer what makes sense to you. Any back bills get paid out of the seller proceeds as settlement. If the seller owes more in a mortgage and or taxes than you offer then there is no deal or some serious negotiating to do.
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