Jun
26

How will property purchased on a short sale be taxed by the assessor?

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When a buyer is thinking about buying a home that is being sold as a short sale, they will always have questions that need to be answered. A short sale does have some things that are different than a typical sale, and every buyer wants to understand the difference.

One question that a buyer might have with regard to a short sale is the following:

If I purchase a house under a short sale and the bank agrees to accept my offer that is several hundred thousand less than the property value, will I pay property taxes on my purchase price or will the house be reassessed at the real value.

When you think about buying a short sale, you need to look at the purchase price of the home. You put a contract in to purchase a piece of property that is being sold as a short sale, and that is the price you are willing to pay for the home.

When the bank considers a short sale, they want to know what the home is worth now, in today’s real estate market. The bank already understands that in most areas, the property is not worth what is owed to the bank. When a home owner can no longer afford to pay the mortgage, and needs to sell the bank wants to do a short sale, vs a foreclosure.

The bank will come back with a value for the home, after they have a BPO done on the home. A BPO is a Broker Price Opinion.

If the bank gets, typically 80% of the current market value for the home, they will usually accept the contract and complete the short sale.

The price you pay for the home, as a buyer of a short sale, is the current market value of the home, or close to it.  If you are getting financing on your purchase, you will not be paying more than the current market value for the home, unless you are paying the difference.

With regard to the taxes you will pay for the property, the county assessors office will determine the value of the property, and it has little or nothing to do with what was owed to the bank prior to the short sale.

If you check, you will find that even when their is no sale involved, the county does regular assessments for property, and the taxes are assessed according to value, not what a person owes, or does not owe on the property.

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