What Happens to Property Taxes When You Sell Your House to a Cash Buyer in Birmingham?
If you’re thinking of selling your home in Birmingham to a cash buyer, you probably have a lot of questions especially when it comes to what happens with property taxes. Who pays them? Are you responsible for the full year even if you move out mid-year? What if you’re behind on payments? These are all fair concerns, and the good news is, the answers are simpler than you might think.
Let’s break it down, step-by-step, so you know exactly what to expect when working with home buyers who offer cash, especially in the Birmingham market.
Understanding Property Tax Basics in Birmingham
When you own a home in Birmingham, you’re responsible for paying property taxes annually. These taxes fund local services like schools, parks, and emergency services. In Alabama, property tax depends on assessed home value, which your county’s revenue commissioner determines. Your county (Jefferson, Shelby, etc.) handles billing and collection.
What’s important: property taxes cover a specific period, usually one calendar year. If you sell your house partway through the year, the tax responsibility gets prorated. That means both you and your buyer pay only for the portion of the year you each owned the home.
When You Sell to a Cash Buyer, Who Pays the Property Taxes?
This is one of the most common questions and the answer depends on timing. When you sell a home, the property taxes are prorated between you (the seller) and the buyer based on how many days each of you owned the property during the year. This is true even when selling to cash home buyers.
Let’s say you close on your home on July 1. You’ll owe property taxes from January 1 through June 30. The buyer is responsible for the remainder of the year. During closing, your share of the taxes is usually deducted from your proceeds and sent to the county by the title company, or credited to the buyer if the taxes haven’t been billed yet.
This proration process happens automatically during closing—so you won’t need to write a separate check or go to the courthouse. It’s all handled by the closing attorney or title company.
What If You Owe Back Property Taxes?
If you’re behind on your property taxes, that amount becomes a lien on your property. You can’t sell the house without settling that debt but don’t panic. This is where selling to a cash buyer can really help.
Many cash home buyers in Birmingham are used to dealing with properties that have outstanding tax balances. In fact, they often specialize in buying homes that have legal or financial hurdles like this.
- The buyer makes you a cash offer.
- The closing attorney pulls a title report and finds the tax lien.
- The buyer agrees to pay off the lien at closing using part of the purchase price.
- The remaining funds go to you.
That way, you’re not coming out of pocket to pay off old taxes before you can sell.
Selling As-Is Doesn’t Mean Skipping Property Taxes
A common myth is that if you sell a house “as-is,” you don’t have to worry about any of the outstanding bills attached to it including property taxes. That’s not true.
“As-is” simply means the buyer accepts the home in its current condition—no repairs, no cleaning, no upgrades. But it doesn’t wipe out your financial obligations. You’ll still need to settle taxes and any other liens at closing.
The good news is that cash buyers are typically more flexible in helping you navigate those obligations. Traditional buyers using bank loans may walk away if they see unpaid taxes. But cash buyers usually build that into the offer, so the process keeps moving.
How Cash Buyers Make the Process Easier
There are several reasons why working with cash buyers is less stressful when property taxes are involved:
- No waiting on bank approvals: Traditional sales can be delayed or fall through, because of lender requirements. Cash buyers pay out of pocket, so the deal isn’t slowed down by underwriting.
- Faster closings: Most cash buyers can close in a week or two. That gives you peace of mind and helps avoid late fees or tax sales if you’re behind.
- Flexible offers: Cash buyers often agree to cover your back taxes from the proceeds. That’s especially helpful if you’re strapped for cash or facing foreclosure.
- Simplified paperwork: Selling to a cash buyer means less red tape. You won’t have to deal with a realtor, appraisals, or multiple showings.
Will Property Taxes Delay My Closing?
In most cases, no. Even if you owe property taxes, that won’t stop you from closing on the house. The title company or closing attorney will include the tax amount in the settlement statement, and it will be paid out of your proceeds.
However, if the tax lien is large enough that it eats up all your equity and then it may be a dealbreaker unless the buyer is willing to absorb the loss. This is where transparency matters. Be upfront with your buyer about any debts attached to the home.
Many companies that say “we buy homes” will work with you to come up with a solution. They’ve seen it all, tax liens, code violations, inheritance issues and often have a plan in place to handle it.
Can You Sell a House With a Tax Sale Pending?
If your home is at risk of being auctioned off due to unpaid property taxes, time is critical. In Alabama, counties can initiate a tax sale if property taxes are unpaid after two years. Once the sale occurs, it becomes much harder to sell your house through a traditional process.
However, some cash buyers are familiar with tax sale timelines and can act quickly. If you’re in this situation, don’t wait. Find a buyer immediately and disclose everything. The right home buyers will work fast and have legal resources to stop the sale if necessary.
Selling a home in Birmingham comes with its fair share of challenges—especially when property taxes are involved. But the process doesn’t have to be overwhelming. When you work with experienced cash buyers, the stress of dealing with back taxes, prorations, and legal paperwork can be lifted from your shoulders.
The key is to be open about your situation and find a buyer who’s seen it all. That’s what makes working with companies that say “we buy homes” or “we buy houses in any condition” so helpful, they’re used to these hurdles and know how to handle them.
If you’re behind on taxes or just want a clean break, selling your home to a cash buyer can be the most straightforward and stress-free path forward. Call We Buy Houses Birmingham at (702) 850-8001 to get a fair cash offer on your Birmingham property—no commissions, no delays, and no tax headaches.