Annual property tax bills are coming up. There is an anticipated rise in more creative types of real estate financing as the economy rotates. Who pays these taxes when you obtain private financing from a seller?
Rents are incredibly high, but traditional mortgages may not be very easy to obtain this year. On top of this many sellers may find it more challenging to find buyers for their homes as fast as last year.
This typically gives birth to more owner financing, seller held mortgage, and lease option type deals.
Who Pays The Bills?
There are a variety of different monthly and annual costs associated with buying a home. Beyond your base house payment, this can include insurances, maintenance, association dues, utilities, and taxes.
These are almost always negotiable. Be sure to check your paperwork to see who is expected to pay what, and who is responsible for these different costs.
Seller Vs. Buyer Paid Property Taxes
What typically may depend mostly on the type of structure you are using to purchase a home. If you are taking ownership, with a seller held mortgage, then it is usually all up to you. Unless they force you to escrow tax and insurance costs on a monthly basis.
If the owner holds title to the property, then they may either give you the option to pay the taxes directly online, and send them a receipt. Or they may collect the money from you and pay the taxes to the county.
Both options have their pros and cons. If you are having the other party pay the taxes, you need to follow up and ensure they were paid to the county on time, and no outstanding fees, interest, or other amounts are still due.
How To Get Your Property Tax Lowered
Property taxes on Long Island notoriously always go up. This year five (or around 30%) of Long Island school districts already claim to be under financial stress. Making it very likely they will break property tax caps, and hike tax bills.
The owner needs to be the one to appeal property tax bills and get them lowered. This is always worthwhile. Even if it doesn’t directly save the owner money, it makes payments more affordable for the buyer, and greatly increases the likelihood that they won’t default.