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Yes, you can sell your house with delinquent property taxes. The usual thumb rule is to clear the taxes from the sale money as there is no obligation to pay them before listing the home. Instead, this approach may help you when you are going through a financial strain. Just make sure to get enough equity in the home to cover them when the sale goes through.<\/span><\/p>\n If you are not paying property taxes on time, the government is likely to place a lien on your home. In case the debt remains unpaid, the risk of foreclosure increases. A situation like this usually goes through several stages before it reaches foreclosure.\u00a0<\/span><\/p>\n Let\u2019s assume you owe $3000 in property taxes because you lost your job or due to financial constraints and you have stopped paying property taxes. In this case, the county may first add penalties and interest. If the debt remains unpaid, they will place a tax lien on your home.\u00a0<\/span><\/p>\n In some states, homeowners choose to sell their debt to a private investor. But then the investor will start collecting it from you, often with higher interest later. It is suggested to utilize the time to address unpaid taxes before foreclosure becomes a possibility.\u00a0<\/span><\/p>\n Yes, you can sell your house with unpaid property taxes even if it has a tax lien. You can list the home and find a suitable buyer. The title company or a real estate attorney (in some states) does a title search and finds the lien. Then the closing attorney contacts whoever holds the lien, gets the exact payoff number, and pays it from your proceeds right there. Buyers then get a clean title, and you get whatever is left after the lien. This may be a great way to protect your equity.\u00a0<\/span><\/p>\n In <\/span>Bell v. Pappas<\/span><\/a>, a federal court ruled that the country\u2019s tax sale system in Cook County was unconstitutional because homeowners were losing homes and all their equity over tax debts far smaller than what the home was worth. That\u2019s what happens when nothing gets done. Which is why acting before a foreclosure happens may help you preserve the value of your home.<\/span><\/p>\n Your goal shouldn\u2019t be only to sell your home but instead to sell it at a price where the tax payoff feels like a normal cost to you. Usually, well-listed homes that end up attracting strong offers can make even a $14,000 tax lien feel like a rounding error. Whereas, a poorly priced listing can make a $6000 lien feel like a crisis.<\/span><\/b><\/p>\n Know what you owe:<\/b><\/p>\n Focus on getting an official payoff statement before you price your home. This should include taxes, penalties, interest, and fees. This way, you\u2019ll know the minimum amount you need from the sale.\u00a0<\/span><\/p>\n <\/p>\n Price it Right<\/b><\/p>\n Do a little research and price your home based on recent comparable sales. Try not to overprice it because this may repel buyers, and in the end, you may have to settle for a lower price.<\/span><\/p>\n Improve Buyer Appeal<\/b> Even simple improvements can make a difference. Consider reviewing what should I consider before selling my house<\/a> to prepare for a successful sale.<\/p>\n Disclose the Lien to your agent<\/b> Choose the Right Timing<\/b> One thing to watch out for is if you\u2019re planning to buy another home at the same time you\u2019re selling your current house, bad timing can leave you stuck with two mortgages. Learn <\/span>how to avoid paying two mortgages when moving<\/span><\/a> in our guide, so you don\u2019t get caught in that situation.<\/span><\/p>\n Get the tax payoff in writing before you list your house.<\/span><\/p>\n Confirm who actually owns the house.<\/span><\/p>\n Ask whether you qualify for a payment plan.<\/span><\/p>\n Check if your state offers a tax deferral program.<\/span><\/p>\n Calculate your net proceeds before setting a price.<\/span><\/p>\n Get your property reviewed by a title company.<\/span><\/p>\n People try to sell their house before tax foreclosure because once it happens, it may take away your ability to decide how it gets sold and what you keep. Let\u2019s assume you are a retired couple in Florida and you fell behind on property taxes. You faced a tax deed sale and took the initiative to contact a real estate attorney early. Hence, you were able to list and sell the home, pay off the lien, and keep the remaining equity.<\/span><\/p>\n In case the foreclosure proceedings have already started, try acting quickly. Give your county\u2019s delinquent tax office a call, learn about hardship referrals or payment plans that may pause the process when you decide to sell your home. Try speaking with a real estate attorney who handles tax cases. In most states, a signed purchase agreement or completed sale can stop foreclosure. If you wait too long, it may limit your options and increase the amount you owe.<\/span><\/p>\n Your buyer would want a clean title especially, if they are using a mortgage. This is because their lender won\u2019t approve a loan with an unresolved lien. Sale proceedings usually help with paying off the lien at closings, and then the title company is able to handle the process.<\/span><\/p>\n Cash Buyers and investors are more comfortable with lien situations. They need to move fast with the process. However, prices can differ on the basis of their evaluation of the local market. Whether you sell your home to an investor or list it traditionally, the lien cannot be ignored. Thus, it requires your attention before the sale is completed.<\/span><\/p>\n
\n<\/span>Truth be told, it’s not just a handful of homeowners facing this challenge. In interesting statistics, the <\/span>National Tax Lien Association<\/span><\/a> highlighted Americans owe over $21 billion in unpaid property taxes every year. This includes regular homeowners, especially people who lost jobs, went through a divorce, had medical emergencies, or inherited a home they weren\u2019t ready for. Are you one of them and want to sell your property burdened by back taxes? You\u2019ve reached the right guide.\u00a0<\/span><\/p>\nSo what happens when you stop paying property taxes?<\/b><\/h2>\n
Good News is That a Tax Lien Doesn\u2019t Stop You From Selling Your Home!<\/b><\/h2>\n
Ways to price and list your home with delinquent property taxes<\/b><\/h2>\n
\n<\/span>Make your house appealing to the buyer. Focus on cleaning, decluttering, minor repairs, and the curb appeal of the house. Sometimes, a well-presented home may attract more buyers and get you stronger offers.<\/span><\/p>\n
\n<\/span>Transparency goes a long way. Thus, letting your agent know about the lien so that the sale is structured correctly is a good idea. You may not need to highlight it in the listing itself.<\/span>
\n<\/span><\/p>\n
\n<\/b>Try listing the house during peak buying seasons such as during spring or early summer. You\u2019d be happy to know that more buyer activity may lead to better offers and a faster sale.<\/span><\/b><\/p>\nPractical tips for homeowners with unpaid property taxes<\/b><\/h2>\n
What to do if tax foreclosure is happening?<\/b><\/h2>\n
What does the buyer do with back taxes?<\/b><\/h2>\n
Compare which Option best works for you<\/b><\/h2>\n