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Dont Let A Tax Lien Spoil Your Sale
Nothing is more intimidating than reading LIEN on a title report, especially when your buyers have found their dream home. Often, it's not until you're in escrow and you receive the preliminary title report that you even know of liens on the property. (A quick aside, lien is a cloud on title. It could be due to unpaid taxes, contractor's fees, child support, the list goes on.) If you're an agent, it's inevitable you'll come across a lien at some point in your real estate career, if you haven't already. If you're a buyer, you may never come across this dreaded word, but if you do, you may not need to fear. Just because there is a cloud on title for the current homeowner, does not mean that cloud will affect you. Liens can be cleared.
As you know, property taxes are collected by the government to fund a variety of public services. If a homeowner fails to pay their property taxes, a lien is placed on the property and that lien must first be paid before the home can be sold. While this may sound like it denies a buyer any opportunity at purchasing a home with a tax lien, the truth is, many sellers have more equity in their home than the value of their tax lien. As long as this is the case, the lien can be paid with the proceeds from the house.
The situation to be avoided at all costs would be a tax lien or liens that, combined with the mortgage, exceed the sales price. If this is the case, then you may be looking at a short sale which can be more problematic for buyers. This is why title insurance is of the utmost importance. Buyers need to remember that, just because they may not see a cloud on title now, does not mean one can't arise at a later date. A great example of this would be a contractor that was never paid by the sellers for the repairs they made on the home while in escrow and he then files a mechanic's lien. Without title insurance, that lien could then become your responsibility as the new owner of that property.
Distinctive Strategies that Deliver Record-Setting Results When you combine Kurt’s passion and knowledge of the real estate market, you really gain an appreciation for what makes Kurt different. Bu....
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