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Unread 2016-08-27, 06:51 AM   #1
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Default Home buying question/issue

I'm nearing the end of the home buying process, but am facing an issue I'd like some advice on. We're supposed to close this Tuesday, but the seller of the house is saying that he can't come up with his property taxes to cover his end of closing. So it appears it will be on me to cover this for him if we don't want to delay closing.

My biggest issue with paying it for him, aside from the fact that it's his responsibility, is that it's my understanding that he will be refunded this payment as the taxes should've already been coming out of his existing mortgage payment. He says otherwise, even after a conversation with my mortgage lender.

What advice can you guys offer? Am I correct in my thinking? If so, is there any means of getting reimbursed for tax payments made on his behalf once he receives his refund?
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Unread 2016-08-27, 06:53 AM   #2
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Just have him deduct it from the sale price.
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Unread 2016-08-27, 07:50 AM   #3
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Just have him deduct it from the sale price.
1. To change the amount of the loan would delay closing, which everyone is trying to avoid.

2. The seller is stuck in the fairy tale that we are getting a bargain for this house when, in fact, we are getting a fair price at best. Therefore he is unwilling to budge on price.
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Unread 2016-08-27, 08:16 AM   #4
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I'm pretty sure you're stuck, then.
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Unread 2016-08-27, 12:36 PM   #5
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I would either delay closing or walk away

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Unread 2016-08-27, 01:13 PM   #6
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I would either delay closing or walk away
Im with BuddyLee on this one. I would delay or walk as well. Dont take the hit just because you want the house.

How much money in tax are we talkin here?

Best of luck to you.
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Unread 2016-08-27, 05:27 PM   #7
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Walk. Sounds like a real jerk to be honest.
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Unread 2016-08-27, 08:02 PM   #8
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What's the motivation for not being able to delay closing? Do you have rent that you'll have to pay or some sort of penalty? Weight those costs with the cost of paying this person's taxes and if it doesn't make sense, delay.
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Unread 2016-08-27, 08:10 PM   #9
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Sounds like he might be upside down, otherwise i thought they would just take taxes out of what he receives at closing?
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Unread 2016-08-28, 08:22 PM   #10
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Sounds like he might be upside down, otherwise i thought they would just take taxes out of what he receives at closing?
After doing a little digging, it sounds like he may indeed be upside down or in a very tight position with the house. His ex brother-in-law is the neighbor, so information was pretty easy to come by.

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Walk. Sounds like a real jerk to be honest.
He has been a real jerk through this whole process. Especially towards the end. I've never heard business professionals at a bank use such colorful words to describe a person.

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What's the motivation for not being able to delay closing? Do you have rent that you'll have to pay or some sort of penalty? Weight those costs with the cost of paying this person's taxes and if it doesn't make sense, delay.
Weighing all costs is basically what we've done. And I personally don't want to roll into another month of prorated rent.

We've been renting this property for the last 3 years, and finally decided to purchase the property from the landlord. From the beginning the seller said he didn't want to pay for anything. And, at the time, it seemed like we were getting the house cheap enough for it to still be worth it. To get the house to pass inspection it needed to be repainted, which was $2,000 out of our pocket. Once we weighed that with the costs we will still incur if the sale of the house falls through, we decided to take care of the taxes in question. And those taxes total $1,292. Thankfully, the title company we are using has waived the seller's portions of the fees in an attempt to end this nightmare of a transaction.

The most infuriating part of this was hearing that he only has $224 to his name. Had something broken in the house my family would have been SOL...

Edit: In addition, our lease is up at the end of November. That would have left us 3 months to find another house. We're looking in 64155, and the next comparable house was $20,000 more than we are buying this one for.
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Unread 2016-08-29, 08:16 AM   #11
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Originally Posted by slownlow43 View Post
After doing a little digging, it sounds like he may indeed be upside down or in a very tight position with the house. His ex brother-in-law is the neighbor, so information was pretty easy to come by.



He has been a real jerk through this whole process. Especially towards the end. I've never heard business professionals at a bank use such colorful words to describe a person.



Weighing all costs is basically what we've done. And I personally don't want to roll into another month of prorated rent.

We've been renting this property for the last 3 years, and finally decided to purchase the property from the landlord. From the beginning the seller said he didn't want to pay for anything. And, at the time, it seemed like we were getting the house cheap enough for it to still be worth it. To get the house to pass inspection it needed to be repainted, which was $2,000 out of our pocket. Once we weighed that with the costs we will still incur if the sale of the house falls through, we decided to take care of the taxes in question. And those taxes total $1,292. Thankfully, the title company we are using has waived the seller's portions of the fees in an attempt to end this nightmare of a transaction.

The most infuriating part of this was hearing that he only has $224 to his name. Had something broken in the house my family would have been SOL...

Edit: In addition, our lease is up at the end of November. That would have left us 3 months to find another house. We're looking in 64155, and the next comparable house was $20,000 more than we are buying this one for.
Wait, you've already sunk money into the sellers property so that it would pass an inspection? He took that off if the asking price right?its the seller who has to take care of things. You're making bad decision after bad decision on this sale. Don't keep making them brother.
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Unread 2016-08-29, 09:18 AM   #12
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The only way that I could see this being acceptable in the least, is if he is upside down on the property - in that case, he would receive nothing at closing, so there would be nothing to deduct the taxes from. Does your realtor have any advice?

If it is what it is, there is no way to get around it, and you really want the house, you may just have to nut up and pay it. It sucks, but you can't get money that isn't there.
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Unread 2016-08-29, 10:30 AM   #13
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If he has a note, why is the money not in escrow?
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Unread 2016-08-29, 04:53 PM   #14
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It might be in escrow however the loan company wont release the escrow for so many days after the close of the sale, however the taxes have to be pro rated at the date of closing. If he is upside down or super close on the property then that can cause a cash flow issue.

I am currently trying to sell my house, on my estimated statement the 3,500 in taxes will be deducted from my sales price, but I will get my escrow account refunded in 30-45 days per my lender.

At this point I am guessing its you pay it or try to find another house in 3 months.
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Unread 2016-08-30, 05:09 AM   #15
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I finally got the whole story. Apparently he owes the IRS money that is coming out of the the sale of the house. And when he contacted the title company it was his understanding that he would have to come up with the property tax to close out of pocket, which was incorrect. Because of the money owed to the IRS he is basically breaking even on the house. Neither of us used a realtor, as this was supposed to be an easy process. Had I been aware of his financial issues I would have used a realtor, and insisted he used one too.


Long story short, he misunderstood them and couldn't get it through his thick head to hear the truth and caused a whole lot of stress in the process. He doesn't have to pay anything additional, I don't have to pay for anything I shouldn't have to, and he will be closing at 2:30 today. Thanks for all the responses.
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