Q: When buying a home on a “short sale,” is the buyer liable for any past-due real estateReal Estate is land and anything permanently attached to it, such as buildings and improvements. taxes?
A: The buyer of a short sale property might not only be responsible for unpaid real estate taxes, but might be required to pay off other liens that are attached to the property.
That’s why you (or a real estate attorneyA Real Estate Attorney is an attorney who specializes in the purchase and sale of real estate.) should do some digging and make sure you check out any possible liens before you close (and preferably, before you negotiate the price).
Depending on the terms of the short sale, you might buy the home subject to the liens.
For most home buyers buying in a short sale situation, the home buyer will treat the purchase in the same manner as any other purchase. Typically, a home buyer will only close on a property if all liens and real estate taxes have been paid in full at or before the settlement or closing.
With a short sale, you must take extra precautions to make sure that everything is paid in full before closing. You should also make sure that the closing agentAn Agent is an individual who acts on behalf of a consumer. A real estate agent represents a buyer or a seller in the purchase or sale of a home. Licensed by the state, a real estate agent must work for a broker or a brokerage firm. An insurance agent helps a consumer purchase an insurance policy. Insurance agents are also licensed by the state., settlement agent or titleTitle refers to the ownershipOwnership is the absolute right to use, enjoy, and dispose of property. You own it! of a particular piece of property. companyA Title Company is the corporation or company that insures the status of title on real estate (called title insuranceTitle Insurance is insurance that protects the lenderA Lender is a person, company, corporation, or entity that lends money for the purchase of real estate. and the property owner against losses arising from undisclosed defects or problems with the title to property.) at a closing, and may handle other aspects of the real estate closing. working with you to close the transaction gives you title insurance coverage over those liens or other matters that might not have been paid by the seller.
In a foreclosureForeclosure is the legal action taken to extinguish a home owner's right and interestInterest is money charged for the use of borrowed funds. Usually expressed as an interest rate, it is the percentage of the total loan charged annually for the use of the funds. in a property, so that the property can be sold in a foreclosure sale to satisfy a debt., the liens are typically settled through the court process, but in condominium associations there may be some lingering issues with association fees and dues. While it may be safer to buy a home that has already been foreclosed upon than buy one in a short sale, you still have to be vigilant about these issues and all the other issues that can hurt you if you don’t know much about buying real estate.