Do you have unpaid property taxes? If so, the consequences can be very difficult to deal with. We are homebuyers in Metro Detroit and in our latest post, we will help you learn more about what’s at risk and the solutions available to you!
Property taxes can quickly spiral out of control, especially depending on where you live and the size and value of your home. What might seem manageable at first can soon turn into a huge burden, especially if you fall behind. Once that happens, penalties, fees, and interest start piling up, and suddenly, you’re looking at a much bigger bill than you initially expected. The longer it takes to address, the deeper the hole gets, making it increasingly difficult to catch up and stay current.
In situations like these, it’s crucial to take action early. Ignoring the problem only allows the debt to grow, and could eventually put your property at risk of tax foreclosure. Whether it means working out a payment plan with the tax office or considering selling your home to avoid further complications, addressing property tax issues as soon as possible is the key to stopping the cycle before it becomes unmanageable.
The Consequences of Unpaid Property Taxes
What Can Happen In Your Home?
The worst-case scenario? You could lose your home. You will likely incur penalties, fines and interest should someone buy the tax lien on your home.
When you fail to pay your property taxes, the government places a tax lien on your property as a way to secure the debt. This lien acts as a legal claim, preventing you from selling or refinancing the property until the back taxes are paid. If the debt remains unpaid for too long, the situation escalates, and the city may auction off the lien to the highest bidder in what is known as a tax lien sale.
At this point, things become more complicated. The person or entity that buys the lien now holds the right to collect the debt. You are no longer just paying back taxes to the city—you have to pay off the lien holder. This includes the original tax amount, plus additional fees, penalties, and interest, which is often decided by the lien holder. If the lien remains unpaid, the buyer of the tax lien could potentially move to foreclose on your property, so it’s important to act quickly to resolve the situation before it gets to that point.
If the back taxes, fees, and penalties are not paid within the agreed-upon timeframe, the lien holder has the legal right to foreclose on your house. This means they can take ownership of your property for the amount of the unpaid taxes, which can be far less than the home’s market value. There are people and investors who specialize in purchasing tax liens, knowing that if the homeowner can’t repay the debt, they can acquire the property at a significant discount.
This situation can feel overwhelming and scary, especially when you’re facing the possibility of losing your home. The best way to avoid this is to take immediate action as soon as you receive notice of a tax lien. You might be able to negotiate a payment plan, find a way to pay off the debt, or even sell the property before it gets to the point of foreclosure.
What Can You Do When Your Taxes are Late?
There are a few things you can do when you are faced with unpaid property taxes. You can pay them, have them lowered or work with a buyer who is willing to help you out of the hole you are in. Nobody wants to lose their home, especially to a complete stranger. Before your unpaid property taxes get out of hand, do everything you can to resolve the situation.
1. Pay Off The Taxes
One way to handle unpaid property taxes is by taking out a loan to pay off the debt. While it may seem like you’re simply swapping one debt for another, this approach can provide peace of mind by ensuring you won’t lose your home. It allows you to eliminate the immediate threat of foreclosure and gives you more time to handle your finances.
However, it’s important to remember that you’re not just paying off the original tax amount. The total you owe will also include penalties, interest, and any additional fees that have accrued since the tax lien was placed on your property. All of these charges must be settled in full for the county to remove the lien. It’s crucial to fully understand the terms of any loan you take out to make sure it’s a manageable solution for your long-term financial situation.
2. Try To Get Your Property Assessment Reduced
Another option to consider when dealing with high property taxes is reaching out to your local property appraiser to request a reassessment. If you believe your home has been overvalued or that there are inaccuracies in the details they have on record—such as square footage, property condition, or improvements—you may have grounds to contest the current assessed value.
To strengthen your case, examine your current tax bill and compare your home’s assessed value to those of similar properties in your neighborhood. You’ll want to gather recent sales data and any other evidence that supports a lower valuation. Keep in mind, however, that getting your property taxes lowered can be a challenging process. It’s important to be well-prepared with accurate and up-to-date information to present a solid argument.
By having your property reassessed, you could potentially reduce your property tax burden, providing some much-needed relief. However, it’s important to note that not all reassessment requests result in lower taxes, so it’s worth weighing the effort against the potential benefits before moving forward.
3. Sell Your Home Directly
Property tax problems do not have to mean that you will lose your home. There is a way out! And a great way to get away from the burdens and consequences of unpaid property taxes is to work with a buyer who will help you to resolve the lien.
We Buy Houses In Metro Detroit
The team at Metro Detroit Homebuyer will help you evaluate your situation and the solutions available to you. Often times, we are able to help you take care of the lien when purchasing the home. This will allow you to sell the property and walk away unscathed.
Are you ready to sell a Metro Detroit house? We can help! Send us a message or give us a call today! (313) 246-4551