selling a home with a tax lien on it

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Latest post 04-04-2012 9:40 AM by Drew. 6 replies.
  • 04-04-2012 1:08 AM

    selling a home with a tax lien on it

    I am not sure if this in the right area, if it is not, I apolozie. 

    I own my house ourtright from an inheritence.  At the time of death there were 2 trustees.  Me and my aunt.  My aunt was supposed to take care of the property taxes and did not and in the state of Indiana, you have 1 year to pay back taxes,  needless to say, the house went for tax sale in oct 2011.  I have renters in teh house now that want to buy.  Noting is owed on the house mortgage wise, so can I sell the house and pay the tax lien at the same time?  Or do the taxes need to be paid first before I can sell.  Origniall taxes were about 2500.00 but since it went to auction, as of last week, I now owe 8000.00 with a 25.85 a day interst charge.

    There is no way for me to borrow the money, I have exhausted all aspects of that, so my last glory would be to get the buyers to give me money for excrow and pay that, then sell the house, or can I just dedeuct the amount owen off the price of the house and pay them then close on the sale of the house?

     

    Thank you

  • 04-04-2012 1:16 AM In reply to

    Re: selling a home with a tax lien on it

    You should be able to arrange for the tax liens to be paid off at the closing on the property. I suggest you see a real estate attorney anyway to assist you with the sale, and he or she can help arrange the escrow or pay off at closing that you'll need to get this done.

  • 04-04-2012 1:58 AM In reply to

    Re: selling a home with a tax lien on it

    excellent news.   what i will do is contact a real estate attorney and go over all that with him.    it makes it hard for me since i live in mississippi and the house is in indiana.   which state attorney would i contact .    MS or IN.  or does it make a difference at this point.

     

     

    thank you so much for your very fast response.  vey helpful

  • 04-04-2012 2:41 AM In reply to

    Re: selling a home with a tax lien on it

    urbaneve6171:
    which state attorney would i contact .    MS or IN.  or does it make a difference at this point.

    You'd want an attorney in IN, preferably fairly local to where this property is. He or she will know the IN laws that apply, will know the local prevailing practices in real estate closings, and how to deal with paying off the IN property tax lien at issue here. In addition, the attorney there can arrange for things to be done for you for the sale so that you don't have to expend unnecessary time and expense making extra trips from MS to IN to for this.

  • 04-04-2012 7:55 AM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on 03-30-2000
    • PA
    • Posts 49,591

    Re: selling a home with a tax lien on it

    Layman's suggestion:

    1. Any local competent RE attorney in that town should be able to sort out a simultaneous closing and statisfaction of the  added tax lien or sold note .  This is not rocket science or uncommon but it requires several hours of work to get it right and the attorney deserves to get paid for his or her time at his or her prevailing rate--hint-discuss/agree to rate/bill  up front .

    2.Some of this redemption stuff has a time limit or there are ways to resell the tax note and jack it way up (in some states anyway)  --so pay attention and clean it up before it gets out of hand. The buyer of the tax note may be most anxious for you to fail to redeem it in time

    3.Keep your mouth shut and the tenants out of the loop ---if the tenants get wind of your financial issues they may be able to leverage your problems into an even lower price.

      3.1 Many a tenant who buys has weak financials and relies upon owner financing  and that can be high risk for the seller/owner ---think hard before you get into owner finance  ---if you do, I's suggest you use same attorney as above to draft the deal on your behalf with as many practical protections as the  law allows for you---I still don't like it for most situations--absent a whopper downpayment



  • 04-04-2012 8:23 AM In reply to

    Re: selling a home with a tax lien on it

    urbaneve6171:
    the house went for tax sale in oct 2011

    Are you sure you still own it?

     

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  • 04-04-2012 9:40 AM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on 03-30-2000
    • PA
    • Posts 49,591

    Re: selling a home with a tax lien on it

    Well--probably --Indiana does provide for a 1 year redemption period -but the note buyer can start the wheels rolling before end of year and could move pretty fast at year end --so its critical to pay attention.

    The interest rates allowed are high like 10-15 % plus fees ---but the one posted seems wacky high --does not add up?

    Yes, apparently if you own a property worth say $200,000 outright  but bungle a tax sale redemption you could loose it all for a pittance.

    You and your Aunt better wise up and find the money!

    I'm not sure if you alone bail it out it that means you alone own it --but thats a moot point if you lose it entirely?



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