Home Buying in Newark>Question Details

Sam, Both Buyer and Seller in Chicago, IL

i am looking at an REO which is priced way below maket in Newark,CA. The only problem is the property tax is

Asked by Sam, Chicago, IL Mon Mar 31, 2008

very high. If i put in an offer and if it does get accepted, can i get the property re-appriased to the new value so as to lower the tax?

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The first issue you will have to address is the "way below market" part in Newark. The Listing price to Sales price comps are showing anywhere from 98% to 102%.. That means that you will most likely be in the middle of a multi-offer situation. That in itself is going to raise the price. Not to mention, the bank is not going to undercut what they need out of it. They are intentionally creating bidding wars to draw interest and boost the sales price up.
To answer the tax question - the tax base will be set on the sale price of the home. If the state does not automatically reset the price then you can contact the tax board to have them do it.
0 votes Thank Flag Link Wed Oct 20, 2010
Hello Sam,

When you purchase a property and close an escrow, you will be paying the property for the remainder of the tax period, per the previous home owner’s tax base.

Home owners are not taxed based on what was the contract price or sales price was or what the tax was for the previous home owner. When a home ownership changes, County Assessor’s office will have a field review done, for evaluation of the price of the property for the purpose of the tax calculation. What ever the Assessor’s office appraises the property at that will be your new tax base.

If you buy a property in today’s market, you may end up getting a tax rebate instead of tax supplement bill to pay.

So you will not have to re-appraise the property, it will be done for you by county assessor’s office. If you think the amount they computed was incorrect you can always
call or write them with the current comparable market analysis and request them to correct it.

Go ahead and buy a REO without property tax fear. You will only be paying taxes per the current market value of the property.

If you need assistant with locating REO please go to my website at
http://www.HomesByCharo.com and n left click on Bank owned properties.
I am known as a great negotiator. Feel free to call me at 510-381-2105
I will be happy to help you realize your dream of investment property

I wish you good luck

Charo Bhatt
Web Reference: http://www.HomesByCharo.com
0 votes Thank Flag Link Sat Jul 5, 2008
Sam,
These are great concerns and questions that most first time REO buyers ask. Carl is correct the bank needs to transfer to you clear title and any back property tax could very well have not been paid by the previous owners. The new tax amount for Alameda county is always 1.25% of the purchase price or $1.25 per $1,000.00 purchased so buying REO property makes sense. You should be getting the property below market value and only paying tax on the new purchase price. Now if you lived in the neighborhood where a lot of REO property is being sold and below what you paid for the home say even 1 year ago you can request a reassessment of your current property tax based on the declining value of property in your area. The property tax issue is always the big question in a buyers mind when thinking about buying a new home but remember these tax are deductable on your tax return each year.
0 votes Thank Flag Link Fri Jul 4, 2008
Sam:

There are a couple of issues here. First of all, for REOs in this area, the unpaid property taxes that may be showing as a lien on the property will be paid by the bank upon close of escrow. An REO will be delivered to you with a totally clear title.

Secondly, when you get the preliminary title report or examine the public tax records, the property tax amount shown is for the PREVIOUS purchase price. In this area, the annual property taxes are always $1.25 per thousand dollars of purchase price. As an example, your annual property tax bill for a home costing $400,000.00 will be $5,000.00. Property taxes are automatically re-assessed at the point of sale.

Unfortunately, the previous property tax dollar amount is the number that will be used to computer the closing costs. HOWEVER, your property will be reassessed and in a few months you will get a supplemental tax bill reflecting the lower taxes. In previous years, as property prices were rapidly increasing, the supplemental tax bill came as a shock to many home owners who did not understand why they had to pay “more” taxes. In fact, they were initialed billed at the previous rate, and the supplemental tax bill caught them up to where they should be.

Because of the current decreases in property value, you will probably get a refund when your supplemental tax bill shows up. Bottom line, you will ultimately not pay more than your should for property taxes. You will only pay from the time you occupy the property and the rate will always be $1.25 per thousand dollars of purchase price.
0 votes Thank Flag Link Wed Jun 18, 2008
Yes, you'll need to get the tax assessor to reassess the value. Check the county tax assessor web site for your area.
0 votes Thank Flag Link Mon Mar 31, 2008
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