Around 5 million American homeowners lose their houses each year to foreclosure, and one of the reasons this occurs is delinquent taxes.
If you don’t pay your taxes, you risk losing your house. Losing your home forces you to find somewhere else to live and harms your credit. It also robs you of your home’s equity.
So, what can you do when you owe taxes on your home that you can’t pay? The best option is to sell your house to a cash buyer.
Selling a home to a cash buyer is a fast and guaranteed way to pay off your mortgage, delinquent taxes, and other liens. Are you ready to learn more about this process? If so, read this guide to learn how this works.
The Effects of Delinquent Taxes on Your Home Title
Taxes are something that most people pay, even though no one likes paying them. For example, if you have a job, you must pay income taxes. Likewise, if you own a home, you must pay property taxes.
Most areas charge property taxes twice a year, and they’re accrued from the previous year. So if you don’t pay them, you end up with delinquent property taxes, which have consequences.
If you don’t pay your income taxes, you incur a tax debt that you’ll eventually have to pay.
Both types of taxes can affect your home title. When you fail to pay your taxes, the government has the legal right to place a lien on your home. A lien gives the government legal rights to the house.
A lien might not affect you for a while, but it will eventually catch up to you. For example, when you sell your home, you’ll be responsible for paying all the liens on your home title.
The first lien you’ll pay is your mortgage loan, which you owe to your lender. Next, you’ll pay the liens on the house, which might be there for delinquent property taxes or back taxes from your income tax returns.
These amounts reduce the check amount you’ll receive from your home sale. If you don’t sell your house while owing back taxes, you risk losing your home to foreclosure.
The Consequences You Face From Not Paying Your Taxes
So, what happens if you don’t pay your taxes and end up with a tax lien on your property? Several things can happen, including the following:
You Can Eliminate the Liens
If you can come up with the money needed to satisfy the tax liens, you can pay them off to eliminate them. If you do this, you won’t lose your home. But, unfortunately, you might not have the cash to pay the liens.
The County Will Sell Your Home
The second thing that might happen is the county could list your home for sale through a tax sale. If this occurs, you could lose your home. People can bid on your house through this sale, causing you to lose its title and deed.
Your Lender Pays Your Taxes
In many cases, lenders pay the property taxes that borrowers owe. They do this to eliminate the risk of a tax sale occurring. When lenders pay the taxes, they try to collect the money from the borrowers.
If the borrowers don’t satisfy these debts with their lenders, they will initiate the foreclosure process.
You Can Lose Your House to Foreclosure
You can lose your home to foreclosure from delinquent property taxes or federal tax liens. You can stop a foreclosure by paying your past-due balance to your lender or the government.
How to Sell Your House When You Owe Back Taxes
Now that you understand the consequences of taxes and liens, you might wonder how you can avoid losing your home to foreclosure. Of course, the best way is by selling your house.
When you sell your house, you pay the liens. Paying the liens satisfies them and prevents further consequences. Unfortunately, when you pay them, it cuts into the profit from your home sale.
One great solution to consider is selling your house to a cash buyer. For example, you could check out the FAQs from John Buys Houses Ohio. This business pays cash for homes, even if they have liens.
When you seek this option, the cash buyer offers you an amount for your house. Selling this way provides an instant way out of the foreclosure process and other consequences from tax liens.
The Benefits of Selling a House for Cash
As you can see, selling your house for cash is a great option if you have delinquent taxes or liens on your property. But, this option also provides other benefits. Here are a few:
You Don’t Incur Any Expenses
You probably realize that you must pay a real estate agent a commission if you hire one to sell your house. Fortunately, you won’t have this expense or others when selling to a cash buyer.
You Can Protect Your Credit
Next, selling to a cash buyer helps you protect your credit. A foreclosure stays on your credit report for many years, causing a poor credit score. You can protect your credit by avoiding foreclosure.
You Won’t Have to Invest Money
Additionally, selling to a cash buyer won’t require any investment. You won’t have to repair or modernize any part of your home, as they’ll take it as-is.
It’s Fast and Guaranteed
Finally, this method offers a fast and guaranteed way to sell a home. The buyer won’t void the deal, and you’ll close on it within weeks.
Ready to Sell Your House? Contact Us
Every homeowner pays property taxes on their houses. If you don’t pay them, they become delinquent taxes, which could cause you to lose your home.
You can prevent foreclosure when you owe taxes you can’t pay by selling your house for cash. Are you ready to ask for an offer?
If so, contact John Buys Houses Ohio. We can give you an offer for your property and a way to prevent foreclosure.