Q: When buying a home on a “short sale,” is the buyer liable for any past-due real estate 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 attorney) 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 agent, settlement agent or title company 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 foreclosure, 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.
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