Posted by Becky IL on July 25, 2001 at 13:56:09:
I have my sellers sign an addendum whereas the balance of the escrow gets transferred to us.
subject to and property taxes - Posted by vladimir IL
Posted by vladimir IL on July 25, 2001 at 12:31:03:
It is my understanding that sellers have to pay their taxes when they sell their property conventional way. How are their taxes handled when the property is taken over subject to?
I’m meeting with a motivated seller tomorrow. He has a house in a decent area I’m familiar with. Seller tried to sell through a realtor without any luck for three months. The realtor had the property listed for $179K. On the phone, seller was originally asking $159K FSBO.
After letting the seller talk for some more, I learned that this guy is making 2 mortgage payments. He does not want to be on the loan and the house anymore. After further discussion, I also learned that the seller has a 142K mortgage and is willing to just give me the house provided I pay him 2K for his equity and pay his taxes. (my total price would be approx. $150K)
Which bring me to my subject question–what happens to property taxes at subject to closing?
I think that ‘subject to’ may not be an option here (since loan stays in seller’s name) but Lease Purchase will definatelly be an option.
I will meet with the seller tomorrow at 5:30PM.
Vladimir IL
Re: subject to and property taxes - Posted by Mike Schmidt (IL)
Posted by Mike Schmidt (IL) on July 25, 2001 at 13:19:24:
If taxes are in a escrow account, then the seller would get what ever is left in escrow normally, this is money he paid over and above his current mortgage. Its my understanding that taxes only have to get paid when they are due. So if they are paid for the year, then they are paid. If a payment is due say next month and you close today, then you will need to pay the next tax bill. If your going to do a L/O purchase, then the seller is still responsible for the tax bill since he still has deed to the property.
Someone correct me if I am wrong.