Wholesaling Snag

Bird Dogs, Wholesaling
1

Hi all …

Looking forward to receiving much needed insight and guidance. I found two homes owned by the same individual who lives out of state.

I was about to put both under contract but already found out via tax records online that he owes back taxes to the tune of about $6K between both properties.

What should I do? Should I abandon this deal and move on? Or could I still go ahead and put them under contract, get a title search done, and include the back taxes in the purchase price and have an addendum in the contract that the taxes be paid out of the proceeds at closing?

I’m in the state of GA by the way if that helps.

Thanks in advance for the advice. :help

2

Hi,

When you and I buy property the seller is required to turn over free and clear title, the escrow or title company does a title search and provides title insurance to guarantee title! In escrow the back taxes are taken from the sellers net and paid at closing so you have clean title!

As long as the properties are not upside down the money for taxes are paid at closing, if a bank owns the property even if it’s upside down provided the bank agree’s to the sale price, the money for back taxes is pulled and paid with buyers money paid to seller and the selling bank pays taxes through escrow and gets less net dollars!

          GR
3

Hi Gold River!!!

MUUUUUCH appreciated! I do have one other question. Is this paying of the back taxes an automatic thing in RE transactions? Or do I need to put an addendum in the contract that the monies owed for back taxes will be taken out from the seller’s net?

Thanks again. Wish you were here in GA w/ me! LOL

4

I assume your contract requires the seller to provide you with clear and usually insurable title. Back taxes mean no clear title. No need for a separate clause.

5

Thanks jmd_forest for answering that question. Appreciate the input very much!