Tax Liens
Do you know what a tax lien is? If you are in the real estate industry you are probably quite familiar with tax liens and the implications that they have. But on the other hand if you have never become familiar with tax liens in the past, you may not know what they are, or how they can affect you. The bottom line is that you do not need to have tons of knowledge about tax liens, but a little bit can go a long way. This is particularly true if you plan on getting into the real estate business anytime in the near future, or if you own a home of your home.
So first thing first; you need to know what a tax lien is. Simply put, a tax lien is a lien that is put on a property by the law in order to ensure that the taxes get paid. There are many reasons that the law may decide to impose a tax lien in your property. First off, if you have back taxes that have not been paid, you are almost always going to get hit with a tax lien. This goes for real estate taxes that are past due. But at the same time, you may also have a tax lien imposed if you are behind on your income taxes or for that matter any other type. Most people are not familiar with this area of tax liens. They think that the only way a tax lien can be imposed is if you do not pay real estate taxes. This is not the truth!
You may be thinking, “What does this have to do with me buying real estate.” Well, that is an excellent question. Simply put, a tax lien on a piece of real estate is attached to the land. For this reason, if you buy a home that has a tax lien against it you will become responsible for it. Again, this is something that a lot of buyers are not aware of. But the fact of the matter is even if you did not do anything to incur the tax lien, it is your responsibility if you buy a home that has one. Now can you see why researching a home is important before buying it? You need to make absolutely sure that a home does not have a tax lien when you buy it. If you do not, you may end up with a property that you can do nothing with. And depending on the state in which the property lies, the owner may be personally liable to pay the back taxes. Surely this is not something that you want to get mixed up in.
Overall, knowing a bit about tax liens is very important before you buy a home. As mentioned above, you do not need to know everything, but basic details are a must.
Stay away from any property that has a tax lien against it. You will be glad that you did.
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