Buying foreclosed homes in North Carolina: tax issues to consider

If you are considering buying foreclosed homes in North Carolina, tax issues can be positive and negative

Foreclosure listings can provide you with a viable option for buying a new home or an investment property in North Carolina. The biggest advantage of foreclosure sales is probably the low price. However, buying foreclosed North Carolina with homes tax issues can cause more costs than savings.

Tax issues of foreclosed North Carolina homes can be both positive and negative. Buying a foreclosed home has the same perks as buying any property. Your down payment, property taxes, interest portion of the mortgage and the Personal Mortgage Insurance (PMI) are all tax deductions.

The possible tax consequences of buying foreclosed North Carolina homes are that the home may have liens that you will inherit when you become the homeowner. A foreclosed home could have additional liens from second lenders, unpaid property taxes, homeowner’s associations and other sources. It's important to learn as much as about the home’s title history as possible. If you are working with a real estate agent, he or she can help you check the property title. Otherwise, a title clerk or county clerk can help you do the research yourself.

This is especially important if you are buying a home at an auction. Tax issues when buying a North Carolina foreclosed home aren't always disclosed before the auction, so you could buy a financial problem. Before you go to an auction, research the titles of each property you may bid on and make sure they are clear.

Whether the home will be for personal use or as an investment, buying a foreclosed home is a good way to launch a real estate portfolio. RealtyNow has foreclosure listings of all types of properties near you if you are ready to shop now. Once you find homes of interest, do the little research or hire an agent to help you.