Buying home with lein (mortgage, mortgage, sale, insurance)
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Just a question. I am a first time home buyer and have found that the home that I'm in process of purchasing has a federal tax lien against it for 92,000.
The title company has told us that the lien is against all of the seller's properties and that they can have it removed as there are multiple properties. They told us that the worst case scenario is that the lien will take more time to remove and may delay our closing.
I'm skeptical and concerned. Is this something that's possible? Would the IRS remove the lien because they can still claim it on the other properties that the seller owns? If this is the case how long would it typically take to have the IRS remove the lien?
One never knows what the IRS will do. I contracted to buy a villa 3 months ago, has a IRS lien and another from the homeowners assoc. The IRS put a curing period on the lien, 90 days, so I am just sitting and waiting for the conclusion. All I know is that, the title company has to secure a clear title before there can be a closing.
If you are not hurry, just sit tight, if not, move on, this could take months to resolve.
-- The IRS lien is actually against the seller, not a piece of property; but, a lien can hardly be satisfied by an arm or leg, thus, the lien is placed against the seller's property. A lien doesn't transfer with the property ... to someone else, but, rather, must be satisfied out of the seller's proceeds from the sale of the property.
And the catch is the loan can't be paid off until the house is sold. And who would buy a house with a lien and have lender and title issues. but the lien would be paid off then the house is sold. And the catch is the loan can't be paid off until the house is sold.
I know of someone in this situation. An owner actually. And none of his properties are occupied, look liked they have changed hands and are falling into great disrepair.
Personally I'd be glad this was discovered before you bought and move on. Who knows what else the owners didn't do properly inside the home. I'd wonder what was let slide inside and what was a rigged repair or unapproved/unpermitted.
The seller is probably going to have to pay their tax lien from the proceeds of the sale. Then you'll need the title company handle that payoff and agree to indemnify your mortgage lender against the lien. This will be a huge pain in the rear, and that's assuming the seller agrees to pay the lien in full in the first place. Ugh!
If you don't get a clear answer about this soon, walk away.
If you do buy the property with the seller paying off their IRS debt, make sure to get an enhanced owner's title insurance policy. Make SURE the title company doesn't slip language in there creating an exception for that lien either!
The IRS will remove liens on property. You need to ask, they need to evaluate it and if the seller has multiple properties or other assets valued over what is owed, usually the IRS will release the lien. Contact the regional IRS office and ask them for the paperwork to request a release. You do need to know that if the seller is thumbing their nose at the IRS, the IRS will spread the liens out over all assets to tie them up and they generally will not release the liens on the property as a way to force the seller’s hand.
Never buy property with a federal lien of any type attached to it.
Never buy property with a federal lien of any type attached to it.
They will remove the lien so the house can be sold and they get the profits. It's done all the time.
The title company just needs to work on with the IRS. The IRS just wants MONEY if there is any.
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