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It is just possible, with the Mechanics lien, mortgage he is paying and all other costs to close he would have to come up with some money he does not have to close.
It is possible he thought he could sell, and that would cancel the mechanics lien, if he sold the property, and he would have some money coming to him.
Put those two together, and it would be impossible to close. It sounds like he is trying to negotiate (unsuccessfully so far) the mechanics lien so it would be possible to close. This is a problem I have seen in the past, so what is happening to you is not unusual, but happens because a lot of people do not understand having liens such as on that property and how it effects their property if they want to sell.
You have two choices to choose between. 1: Cancel the purchase, and get your deposit back and walk away, then buy another property. 2: Wait a couple of weeks, to see if he can get things so he can close. That is about all you can due because of the circumstances.
It is just possible, with the Mechanics lien, mortgage he is paying and all other costs to close he would have to come up with some money he does not have to close.
It is possible he thought he could sell, and that would cancel the mechanics lien, if he sold the property, and he would have some money coming to him.
Put those two together, and it would be impossible to close. It sounds like he is trying to negotiate (unsuccessfully so far) the mechanics lien so it would be possible to close. This is a problem I have seen in the past, so what is happening to you is not unusual, but happens because a lot of people do not understand having liens such as on that property and how it effects their property if they want to sell.
You have two choices to choose between. 1: Cancel the purchase, and get your deposit back and walk away, then buy another property. 2: Wait a couple of weeks, to see if he can get things so he can close. That is about all you can due because of the circumstances.
If they really want this specific property they should verify with him the lien is actually enforceable.
Contractors will throw a lien on to pressure to get paid. It varies by state, but in mine at least it doesn't stop there. They have to take further action, otherwise the lien doesn't mean anything but still shows up.
I personally would have to be pretty attached to the house to continue and not just walk. I'm not really picky though. I live somewhere a couple years then move.
It is very common to list encumbered properties.
The contract should indicate that all liens will be cleared prior to closing.
A mortgage is a lien, for example.
A furnace or AC unit with a loan financed through a utility company is a common lien
The seller is just playing stupid games, from the OP's description.
This....
Similar language is likely to be found in the contract between you and the seller. It also might be found in the listing contract used by agents in your area as an agreement between the seller and the agent that the seller will clear up all liens to facilitate a sale. Ask you agent.
If you sell a property, you have to deliver clear title. That is one big reason why liens are filed against properties. If there is a dispute as to the validity of the lien that's between the owner and the lien holder and it would need to be taken care of in a separate legal proceeding. One way or another, the seller has to give clean title. (A buyer could, I suppose, agree to purchase a property subject to a lien, although they would have to be paying cash, and I don't know why they would do this.)
But the lien has to go away. A mortgage company won't grant a mortgage without being the first lien holder.
All I know is that is was for some repair work (about $15k worth). Apparently he hasn’t paid any of it, and the lien was first placed about 15 months ago. My point is that he’s known about it for a while, so if he disputed the validity of the claim, he should have resolved it before putting the property on the market... and actively negotiating a sale. As I understand it, the contractor would have had to satisfy a judge (or some other authority) that it was a valid debt to get the lein in the first place
Geezus, $15K??? I would certainly want to know what the repair was!!! And if it wasn't done properly, you are now stuck with it? Didn't this come up during the home inspection? I don't think you're doing your due diligence here.
So you think it's just that the seller didn't realize he's got to cough up $15K out of his profit/funds to pay off the lien before it closes? He sounds dumb if he didn't know that going in.
However, given the high price of whatever work was done, it sounds like it was something important. I would not go forward without knowing what it was all about....and probably, I wouldn't want to get involved.
Mainly home inspection. Not sure about other costs yet (i.e. appraisal, Title Insurance , etc.). Those probably will not be incurred. I’m really pissed we didn’t walk last week, but figure we probably don’t have much of a leg to stand on. It’s a sh***y way to conduct business, but there are no rules against being a sleeze.
We are trying to do a 1031 Exchange, so we need to the something suitable fairly quickly.
None of those things are investments. That’s just some of the costs incurred to purchasing a house. I’ve had a few houses fall out and I was already past inspection and after appraisal and the seller went sideways because of some emotional or personal issue.
You’re right, it’s a s****y way to conduct business. But plenty of people do it. Imo that’s really the only reason you need realtors. It’s not the paperwork in most cases. It’s to keep insane buyers and whacked out sellers from ever meeting.
If he didn't sign the contract there is nothing there. I verbally accepted an offer on my home they had an inspection and I bailed 4 days later due to an all cash no contingency offer of 40k more. I refunded there home inspection cost(not legally required) since it's not there fault so why should they pay. It sucked for the prospected buyer, the seller has to do what's best for them. Until the contract is executed it's fair game for all.
If he didn't sign the contract there is nothing there. I verbally accepted an offer on my home they had an inspection and I bailed 4 days later due to an all cash no contingency offer of 40k more. I refunded there home inspection cost(not legally required) since it's not there fault so why should they pay. It sucked for the prospected buyer, the seller has to do what's best for them. Until the contract is executed it's fair game for all.
That was generous of you to refund their inspection costs.
Back to OP, $15 worth of repair work should be disclosed to buyers. From what you write, it sounds like only the lien but not the actual nature of the repair was disclosed.
That - and how it appears the seller is dealing with the contractor and stalling on the close - indicates it might be best to walk away. This may be only the beginning.
Or wait and see, understanding that you are at the seller's whims on this.
Thanks for the clarification. Never thought of those as liens. I tend to think of contractor liens.
Even at that, listing a house with a tax lien, back property taxes, mechanic's liens, judgements, is all fair game.
As long as the seller will clear all liens and deliver marketable and insurable title, if that is what the contract says.
Sometimes, tapping seller's equity is the only way to get it done.
If the seller the OP is dealing with has no intent, or no cash or equity, to clear the title at closing, he is a goofball or a snake, or both.
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