Real Estate Broker · Brossard, Quebec · Member since 2014 · 36 posts · 9 votes
How come people sell their homes because of back taxes, to individuals for a deep discount. They only ~15k in taxes to their municipality? Why don't they try to sell it themselves before going to investors who will discount their property? I never see a forsale sign in the yard.
I am trying to think of reasons:
Short Time Frame being being auctioned off
That's all I could think of, do you have any other reasons?
Often people who cannot afford their taxes, also cannot afford to maintain their properties. It can cost more money to get a property retail ready than the owner has. An investor helps them out of this situation by taking on the repairs, in exchange for a discount on the property.
Your normally dealing with people that just don't have the emotional energy anymore to deal with the problems. And the investor needs to fix there problems to get the property.
Often people who cannot afford their taxes, also cannot afford to maintain their properties. It can cost more money to get a property retail ready than the owner has. An investor helps them out of this situation by taking on the repairs, in exchange for a discount on the property.
Sometimes people inherit properties that they can't afford. Life can too easily take priority over property ownership for many - where taxes and recurring maintenance expense creates a liability rather than an asset. Its easier and quicker for them to escape the headaches of property ownership by selling to an investor rather than going through the traditional marketing channels with a broker or agent.
Often people who cannot afford their taxes, also cannot afford to maintain their properties. It can cost more money to get a property retail ready than the owner has. An investor helps them out of this situation by taking on the repairs, in exchange for a discount on the property.
Agreed. In extreme conditions, the property may be in such a state of disrepair as to be disqualified to be purchased via traditional financing, which leaves only cash buyers who are normally all investors anyhow, even if it is sold on the open market.
Distressed sales occur for all different kinds of reasons.
Why in my market do banks sell $40,000 houses for $3000 and less quite often?
I can show you multiple times where a bank sold a house to me for less than they paid the realtor to sell it and other examples where they sold it for 1/20th of the listing price after the listing expired.
it's essentially been covered already but if you owe a few years in back taxes then you probably haven't done a lot of home maintenance over the past ' years either. Often the houses look dirty as well and people are embarrassed to have a realtor, inspectors and potential buyers through the home.
When someone says I'll give you x in cash and close in 5 days that becomes the easy out. It also helps settle Estates quick and easy.