Selling my condo in Sunnyvale via Short Sale, what are the ramifications of not paying my property tax bill this month?

Asked by Eric, Sunnyvale, CA Sat Apr 9, 2011

Will Santa Clara county notify either my lender or the credit agencies if I dont pay my property tax bill this month? If so, how soon will that happen?

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8
Brad Gill, Agent, San Jose, CA
Mon Apr 11, 2011
Hi Eric…This is a great conversation to have with the real estate agent helping you with your short sale. Unfortunately this (as in the Trulia forum) may not be the best place to receive a specific answer to your question…but it is a great source of feedback which can provide you with some really good insights into your upcoming short sale.

Speaking from experience with multiple short sales transactions, as well as from extended short sale based training (CDPE & SFR), paying or not paying your property taxes is NOT likely to be the determining factor of successfully completing your short sale. But, If you decide not to pay your property taxes then possible ramifications could be increased penalties and late fees charged by the tax collector which are then added to your total debt owed your lender(s).

The Santa Clara County tax assessor's ofice will notify your lender and you will most likely be contacted by them demanding payment of the outstanding balance. How you handle the situation when it arises is between you and your listing agent and/or real estate attorney.

When selling a property subject to an HOA, more important that staying current on property taxes is staying current on HOA dues...both for the ease of negotiating a short payoff with your lenders as well as helping the HOA's delinquncy rate so that prospective buyers will be able to qualify for purchase financing.

I hope this helps...feel free to contact me for further details.

So be sure to fully discuss your options and qualifications for a short sale before you skip your payment.
1 vote
Kamal Randha…, Agent, El Sobrante, CA
Sat Apr 9, 2011
Hello Eric,

I suggest you pay the taxes if possible but if now, not much you can do. I believe with my fellow realtor below on the ramifications
1 vote
Richard Murp…, Agent, Eureka, CA
Sun Apr 10, 2011
The truth about your property Tax is you have 3 to 5 years before you lose your property at a Tax sale.
If you are having problems it is up to you not some agent that is trying to make you do the right thing because that is what they think.
If I was having problems I would evaluate the needs of my Family first.
0 votes
Andrea Wince…, Agent, Milpitas, CA
Sun Apr 10, 2011
If you are able, it is best to pay them to avoid a possible problem in the future (and $ penalties for not paying). What problems entail depends on how your lender responds to your short sale offers and yes, they will find out.
0 votes
Marcy Moyer, Agent, Palo Alto, CA
Sat Apr 9, 2011
Eric,
The investor who holds the note will determine how much they want to net from the sale. If there are unpaid taxes and you do not get an offer high enough to net what the investor wants then they may ask for a contribution from you to approve the sale. The home can not be transferred to the new buyer until the property taxes have been paid by someone, whether that is you or your lender.
Marcy Moyer
DRE 01191194
0 votes
Arn Cenedella, Agent, Greenville, SC
Sat Apr 9, 2011
Eric
There is a 10% penalty if taxes not paid by April 10.
Typically in a short sale the property taxes gets paid out of purchase price reducing the lenders proceeds. In a short sale, the seller never gets cash out of sale so it kind of does not matter to you, whether you pay them or not, any funds generated from sale go to your lender. Yes the County will eventually notify the lender.
Let me know if I can help you with process. Arn
0 votes
Bart Marchio…, Agent, Mountain View, CA
Sat Apr 9, 2011
Experience shows that lenders will pay delinquent property taxes as part of the overall closing costs in a short sale.
-Bart
Web Reference:  http://moreconsultants.com
0 votes
Terri Vellios, Agent, Campbell, CA
Sat Apr 9, 2011
This question is best addressed with your agent and real estate attorney. Here are some things to consider;
Your tax bill becomes a lien and if not paid on time there are late fees associated with it.
In a short sale the lender may not cover the taxes and penalties so either you or the buyer may have to do it.
Your note with your lender states that you will maintain your home and pay taxes. By not doing so you may be waiving certain anti deficiencies within the note.

Your lender will receive notification when you fail to pay taxes and insurance.

All the best to you.
Web Reference:  http://terrivellios.com
0 votes
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