Hluuci, Home Buyer in 92646

Buying an REO. Prelim title shows unpaid property taxes. Is the bank responsible for this before closing? Which documents should I look at?

Asked by Hluuci, 92646 Fri Apr 8, 2011

Is there some verbage in the purchase contract that would show it's sellers responsibility to pay for previous liens and unpaid taxes?

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If you are represented by an agent, get all your questions answered from him/her. if not, the escrow company will answer your questions and get yourself a professional to assist you.
1 vote Thank Flag Link Fri Apr 8, 2011
Hello Hlucci, Surprised you are not talking with your agent who is representing you in buying the home.. That is the first person you should be talking with or you can talk to the escrow company.. Typically the bank would be paying for them. The bank should and would have sent you forms to read and sign in order to buy the bank owned property. Ingrid Ski Realtor 949-874-0432 IngridSki2@yahoo.com
1 vote Thank Flag Link Fri Apr 8, 2011

I agree with Karen, but here is a link for you to check and see if they have been paid or not.


Good luck,

0 votes Thank Flag Link Mon May 9, 2011

The bottom line is that the taxes will need to be paid before the home can transfer title. If this is an actual bank-owned (not a short sale), You can expect the bank to pay this when it closes. This is typically a seller cost.

On a short sale this can go either way.

Regardless, get a copy of the HUD1 which shows the allocation of costs and you can talk to escrow if you have any questions or concerns.

0 votes Thank Flag Link Mon Apr 11, 2011
Yes they are responsible.  Look at the estimated closing statement or HUD-1 for prorations.
Rwomei Chang
0 votes Thank Flag Link Sat Apr 9, 2011
Hi Hluuci;
Buying REO, is like buying any other regular property with exception of some disclosures that the owner lender does not have to provide you with. Also REOs are coming with another agreement on top of the regular purchase agreement. Make sure to read that and pay attention to the detail of that agreement. Most of the time if you buy a REO and apply for a loan, your mortgage lender will have to have the clear title before grant you that loan. Meaning, once the prilim title report showes unpaid property taxes, the owner/bank must pay it before closing (unless otherwise stated on that supplemental agreement). The rest is almost the same as any other transaction. I would suggest to work with a professional when you want to buy a REO property or any property. You should not go into any real estate transaction by yourself.
Good luck
Shadi Kian- Broker
DeltaMax Mortgage/Realty
0 votes Thank Flag Link Sat Apr 9, 2011
I did try with OCWEN but remember - the supplementals were not known (did not show up on records against the property) until AFTER I had closed escrow.
0 votes Thank Flag Link Sat Apr 9, 2011
Hluuci, Typically, the seller is responsible for those taxes, but it also depends upon the agreement that you signed. I've had several banks on REOs try to push those off on me, and I countered with a commensurate price reduction or balked. Check with that bank to make sure you're clear on what they plan to do.

Margaret, since you didn't call OCWEN on the carpet to pay for those back taxes, you'll most likely end up paying them if you decide to sell--unless you can negotiate something with your buyer.
0 votes Thank Flag Link Sat Apr 9, 2011
I bought an REO from OCWEN over 3 years ago. An unpaid supplementary still shows against the property from BEFORE I bought it (pursuant to the foreclosure). The County Assessors office has confirmed that it is not my responsibility - but also that they cannot remove it. So it is just sitting there - probably forever or until I sell the property. At which time, in order to get clear title for that transaction, I suspect that the buyer will require it to be cleared. In that case, my gut feel is that I'll end up paying for it. I never saw this bill until after the close of the HUD/my purchase. And I doubt that anyone would unless the home stays an un-resold REO for long enough that the supplemental taxes show up....which can be a long time. And an agent represented both buyer/seller. I doubt if the bank/REO seller would know of, nor tell the buyer of, the $ of supplemental taxes either - partly because of the time it takes the County to bill them and partly because it is not their responsibility. I think this is probably just another one of the possible $ exposure items every buyer needs to be aware of (and be prepared for) when buying an REO.
0 votes Thank Flag Link Sat Apr 9, 2011
When purchasing a bank owned property, it will most likely come with a clean title. A clean title allows the buyer to avoid having to worry about any liens placed against the property, back taxes, or any other outstanding fees. Prior to removing contingencies, it is important though to treat REOs like buying any other property and to get a fully insured title search done to ensure that title is clean. And if you should have any further questions, please just ask! There are no dumb questions, only dumb answers!!!
Good luck,
0 votes Thank Flag Link Fri Apr 8, 2011

There should be verbiage in the contract that says that the seller is responsible for prorated taxes up to the date escrow closes. This may be in the original contract likely the California Association of Realtors form Residential Purchase Agreement (RPA) or in the addendum/contract the bank asked you to sign.

You should speak with your real estate agent to confirm this and/or talk to escrow and review your estimated HUD1 which is your estimated settlement statement.

Christine Donovan
Web Reference: http://www.donovanblatt.com
0 votes Thank Flag Link Fri Apr 8, 2011
Yes, typically the seller is responsible for their share of the taxes prorated through the closing date. The person to ask is the escrow officer handling the closing. Your purchase contract should have the language clarifying who is responsible for what costs related to the sale and transfer of the property.
Web Reference: http://www.jameswehner.com
0 votes Thank Flag Link Fri Apr 8, 2011
Yes. In MOST circumstances at least. Ask escrow. They will be able to tell you if the bank is paying for it; or review your HUD and look for a credit to you. Have you submitted your offer? You can also state that in the purchase agreement. Also, double check your purchase agreement to on page 2 where it states if the buyer/seller pays for it and make sure your agent checked seller's pay for unpaid property taxes. You shouldn't be responsible for it . Best of luck.
0 votes Thank Flag Link Fri Apr 8, 2011
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