Remedies to selling property with high property taxes
Did you ever try selling a property with high property taxes? Was it a simple process? Were you able to sell the property quickly and tax-stress free?
In most cases, the answer to these questions is no. Selling a property with high property taxes is not fun, it is not fast, and it is not tax-stress free. Most of the time, the seller’s agent has to jump through hoops to get the property sold in the best-case scenario and in the worst-case scenario, the deal just falls apart during the due diligence period or during mortgage origination or potential buyers simply walk away without even giving an offer.
In situations like these, besides property taxes, the main reason why the deal falls apart is that neither the seller nor the buyer agents have enough information to analyze property taxes on the subject property and come up with a proper solution for their clients. Simply put it, neither agent knows whether it is possible to lower property taxes on the property before or after the closing, what that reduction may be in $ terms, what it will cost their clients and who has the best chance to initiate the appeal. Let’s faces, property taxes are not a simple thing to figure out, especially on the fly and at a minute notice.
At Property Tax Fox, we educate agents on how to sell properties with high property taxes properly to make the whole transaction property tax-stress free for clients using our Property Tax Analysis & Marketing platform. In our experience, it is good to be proactive rather than reactive when dealing with such properties. To accomplish this, realtor needs to analyze their client’s property taxes immediately after engaging them by running a sell-side or a buy-side analysis of the client’s property taxes early in the process. This will help them answer the following questions and be better prepared for questions from opposing side:
- Is my client overpaying their property taxes?
- How much is my client overpaying their property taxes by?
- Can the buyer appeal their property taxes after
the closing ? - How much can the buyer save with the appeal?
- Does it make sense for the client to appeal their
taxes before the closing?
The first two questions are very important. Answering them early in the process will help the seller’s agent respond to any agent who is trying to make taxes a central issue in any price negotiation with your client. If the seller’s taxes are fair or low, you can easily make taxes a non-starter in any conversation, by providing the other agent with a copy of our comprehensive property tax analysis report.
The next two questions are also very important because their answers can help you shift property tax appeal responsibility to the buyer. In all counties, the sales price of property sets the market value of the property that any assessor must use to calculate its property taxes. This means that if the property’s purchase price is lower than the market value set on the property by the County’s Assessor, the buyer has a perfect case to appeal their property taxes after the purchase if the property has been purchased as part of an arm’s length transaction. With that in mind, if the buy-side tax analysis for the property shows that the buyer can appeal property taxes after the closing and receive more savings than if the seller would after the appeal, the seller’s agent can simply attach our report to the MLS listing to signal all potential buyers that their taxes can easily be reduced after the closing and by how much.
Finally, having answers to the first 4 questions, will help both agents answer the main questions, which is who should appeal property taxes on the subject property? In most situations, if the buyer can appeal, it is always more beneficial for the buyer to do so then for the seller. If the buyer can not appeal, seller should appeal to save the transaction. Property taxes don’t have to cause you a transaction, you just need a way to make them work for you and not against you. If you have any questions, please don’t hesitate to contact us with any questions.
Contact us at info@propertytaxfox.com or call us at 630-869-0198 to schedule a demo for your real estate office or if you have any questions.