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socrateaser
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 37970
Experience:  Attorney and Real Estate broker -- Retired (mostly)
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Well I wanted to sell my home quickly. I contacted a company

Customer Question

well I wanted to sell my home quickly. I contacted a company that buys homes and they wanted to purchase but I am not sure about the contract because they said that I would not pay the taxes for this year even though I have lived in my home all year. And that at closing the bank would have to return the money in the escrow account back to me. Is that right or is there something wrong about that?
JA: Because real estate law varies from place to place, can you tell me what state this is in?
Customer: texas
JA: Has any paperwork been filed?
Customer: we had signed a contract to sell but he said that I could get advice from a lawyer.
JA: Anything else you want the lawyer to know before I connect you?
Customer: Well I just wanted to make sure that I am not being taken advantage of. the pay off is 110.765.258 but there is almost 4,000 in the escrow account. They said they would pay 107 and that the bank would give back the money in the escrow account. I am not sure about that. I have never sold a house before
Submitted: 2 months ago.
Category: Real Estate Law
Expert:  legalgems replied 2 months ago.

Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

Expert:  legalgems replied 2 months ago.

In which state is the property located please?

Customer: replied 2 months ago.
texas
Customer: replied 2 months ago.
this is the contract
Expert:  legalgems replied 2 months ago.

I'm sorry; I'm not able to assist at the moment; I will opt out so another person can assist; please don't respond until someone responds to you as that will create a delay in allowing them to access your question. Thank you!

Expert:  socrateaser replied 2 months ago.

Hello,

Different contributor here. Please give me a few minutes to review the document.

Expert:  socrateaser replied 2 months ago.

Okay, I'm back. Thanks for your patience.

Section 13 of the contract provides: "Taxes for the current year, interest, maintenance fees, assessments, dues and rents will be prorated through the Closing Date." So, you absolutely will be liable for your share of these charges, regardless of what the buyer stated, unless he expressly waives his rights to Section 13 of the contract, and agrees to relieve you of the liability for the pro rata taxes.

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer (click 3, 4 or 5 stars) -- otherwise, I receive nothing for my efforts in your behalf.

Thanks again for using Justanswer!

Expert:  socrateaser replied 2 months ago.

Questions?

Customer: replied 2 months ago.
in that section ...the last line says if taxes are not paid at or prior to closing, Buyer shall pay taxes for the current year. Also would I not be able to claim the house on my taxes for this year?
Expert:  socrateaser replied 2 months ago.

The last sentence makes the buyer liable for taxes which may not be properly computed by the closing attorney or escrow agent. It does not change the buyer's and seller's respective liability for the pro rata taxes that are actually accounted for on the closing statement.

Concerning your claiming a tax deduction for the house, you are entitled to claim the property taxes that you actually pay during the year of payment. There is no other deduction available -- however, there is a capital gains exclusion of up to $250,000, if you reside in the property for at least 2 of the 5 years immediately prior to sale (i.e., 730 total days).

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer (click 3, 4 or 5 stars) -- otherwise, I receive nothing for my efforts in your behalf.

Thanks again for using Justanswer!

Expert:  socrateaser replied 2 months ago.

Hello again,

I see that you have reviewed my answer, but that you have not provided a rating. Do you need any further clarification concerning my answer, or is everything satisfactory?

If you need further clarification, concerning this matter, please feel free to ask. If not, I would greatly appreciate a positive feedback rating for my answer (click 3, 4 or 5 stars) – otherwise, I receive nothing for my efforts in your behalf.
Thanks again for using Justanswer!

Customer: replied 2 months ago.
if I am not sure about moving forward with the contract,, what are my options and what ramifications will occur?
Expert:  socrateaser replied 2 months ago.

If you don't sell the property as per the agreement, the buyer can sue for breach of contract and "specific performance" to force you to transfer title. If the buyer is successful, you would also have to pay the buyer's legal expenses, which may be quite large ($25,000 or more).

You would have to prove that the buyer promised that you would have no tax liability on the transaction. If that promise was oral, then the written contract supersedes the oral promise, and you would lose that claim.

In sum, and based only on the very limited information that I have about your transaction, I do not see any easy means by which you could back out of the contract.

Doesn't seem worth it to me. Probably easier to just sell the property and move on -- unless you have some "smoking gun" evidence of the buyer's fraudulent representations that you could use to leverage your way out of the deal.

I realize that my answer may not be exactly what you were hoping to read. However, under the circumstances, the best that I can do is to explain what the law is and is not, so that you can avoid expending valuable resources looking for answers that do not exist, and concentrate on the options that are actually available.

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer (click 3, 4 or 5 stars) -- otherwise, I receive nothing for my efforts in your behalf.

Thanks again for using Justanswer!

Expert:  socrateaser replied 2 months ago.

Hello again,

I see that you have reviewed my answer, but that you have not provided a rating. Do you need any further clarification concerning my answer, or is everything satisfactory?

If you need further clarification, concerning this matter, please feel free to ask. If not, I would greatly appreciate a positive feedback rating for my answer (click 3, 4 or 5 stars) – otherwise, I receive nothing for my efforts in your behalf.
Thanks again for using Justanswer!

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