Over the past few years short sales have become a large part of the real estate market & sales business in Santa Clarita where I practice. While in reality there are millions of home owners staring foreclosure in the face, it seems only a small percentage of them actually reach out for help. Nevertheless, short sales have become fastest growing alternative to foreclosure over other available options because of the advantages they offer with respect to foreclosure. Entering the Short sale territory brings about complicated questions for homeowners who seek to obtain answers from no one else, but their Real Estate Agent.
If you are consulting a Real Estate Agent for help you need to understand that we as Agents are unable to provide Tax and/or Legal Advise. It is very important for you to consult your CPA, and Attorney for Legal based questions. Regardless, one of the questions that continually arise are regarding property taxes. I received a question this week that I wanted to share with you and hopefully provide some insight: “I was told by someone that I don’t pay property taxes since we are trying to short sale the property. Is this true?”
While I cannot advise whether to pay/not to pay property taxes, my response to this question would be, During the short sale we ask the bank(s) to allocate funds for Property Taxes, and usually the bank clears them. However, we are unable to advise you not to pay your taxes, and you need to consult your Attorney to understand the ramifications if you decide not to pay. Nevertheless, if the bank forecloses on property the taxes would have to be cleared the so it’s not unusual for them to allocate funds to pay them off through the short sale.