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Posted: 6/19/2014 10:05:27 AM EDT
So we are one week away from closing on our new home and my realtor calls to tell me the title company found out the IRS has a lien on the home for unpaid taxes. Anyone ever dealt with this? I was told it could take 1-4 weeks to settle. Should I prepare my anus?
Link Posted: 6/19/2014 10:07:48 AM EDT
Red Flag. If they just found this now --what else have they missed? And it seems like the seller is less than honest. If you still want this house make sure all the I's are dotted and all the T's are crossed.
Link Posted: 6/19/2014 10:07:52 AM EDT
unless I was in love with the place, I would resume my house shopping
Link Posted: 6/19/2014 10:09:01 AM EDT
[Last Edit: 6/19/2014 10:09:43 AM EDT by Happygobasher]
How much $?

Could Be one of those stupid five dollar nobody told the owner things that you hear about.

Link Posted: 6/19/2014 10:09:08 AM EDT
Seller must resolve this prior to closing or you will wait until they do. Unless the seller has the cash to pay it off...just walk away
Link Posted: 6/19/2014 10:10:42 AM EDT
Once they clear the lien, you should be GTG. Make 100% sure you have title insurance!!!
Link Posted: 6/19/2014 10:11:43 AM EDT
It's more than she will make selling the house. I was told she just had to set up a payment plan and then we can proceed. I'm just getting nervous and anxious.
Link Posted: 6/19/2014 10:12:22 AM EDT
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Originally Posted By defenderhome:
Once they clear the lien, you should be GTG. Make 100% sure you have title insurance!!!
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+87

I'm in the process of buying 18Ac. I made damn sure to have title insurance.
Link Posted: 6/19/2014 10:13:26 AM EDT
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Originally Posted By dwheeler78:
It's more than she will make selling the house. I was told she just had to set up a payment plan and then we can proceed. I'm just getting nervous and anxious.
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nightmare on elm street

find another property
Link Posted: 6/19/2014 10:15:47 AM EDT
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Originally Posted By dwheeler78:
It's more than she will make selling the house. I was told she just had to set up a payment plan and then we can proceed. I'm just getting nervous and anxious.
View Quote


The title company will not close without the lien release, so if this is the case, you should be GTG. If there is a mistake the title company is on the hook for the lien-if you have an owner's policy for title insurance.
Link Posted: 6/19/2014 10:15:50 AM EDT
Eject.
Link Posted: 6/19/2014 10:17:23 AM EDT
Hopefully you are using an attorney.
Link Posted: 6/19/2014 10:19:41 AM EDT
[Last Edit: 6/19/2014 10:20:41 AM EDT by 101_proof]
I had something similar happen, the guy I was buying from had bought his land on tax auction but didn't elect for title insurance (dumbass), when we went to purchase dude had a 2 million dollar lien against his 1 acre. We were not in a hurry to move and actually gave him several months to work it out but eventually we had to just walk away. I don't think he ever got it worked out.

Make sure you work with a good title company with good insurance and you should be fine. These things happen and generally aren't a big deal and can be resolved.
Link Posted: 6/19/2014 10:23:58 AM EDT
Title insurance. Title company we used just wrote a $4000 check for something they missed.
Link Posted: 6/19/2014 10:24:38 AM EDT
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Originally Posted By mcnielsen:


The title company will not close without the lien release, so if this is the case, you should be GTG. If there is a mistake the title company is on the hook for the lien-if you have an owner's policy for title insurance.
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Originally Posted By mcnielsen:
Originally Posted By dwheeler78:
It's more than she will make selling the house. I was told she just had to set up a payment plan and then we can proceed. I'm just getting nervous and anxious.


The title company will not close without the lien release, so if this is the case, you should be GTG. If there is a mistake the title company is on the hook for the lien-if you have an owner's policy for title insurance.

This... It's kinda hokey, but the title company is worried about their part just as much (if not more) that you are about your part in this.
Link Posted: 6/19/2014 10:29:03 AM EDT
[Last Edit: 6/19/2014 10:30:15 AM EDT by AeroE]
Link Posted: 6/19/2014 10:30:21 AM EDT
Maybe the computer will crash and loose the charges on the house. You know they have had a history of computer crashes lately!!
Link Posted: 6/19/2014 10:34:15 AM EDT
Keep it very, very, simple. Tell everyone that you can't buy the place until the lien is released.
The seller can set-up a payment plan, buy a pint of ice cream, or whatever, because that's his business. Not yours.

If you buy the place with a $1,000 lien intact, it could cost you $10,000+ in legal fees to get it released.
Link Posted: 6/19/2014 10:35:47 AM EDT
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Originally Posted By dex357:
unless I was in love with the place, I would resume my house shopping
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This.
Link Posted: 6/19/2014 10:45:40 AM EDT
[Last Edit: 6/19/2014 10:47:24 AM EDT by Lomshek]
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Originally Posted By Partisan:
Red Flag. If they just found this now --what else have they missed? And it seems like the seller is less than honest. If you still want this house make sure all the I's are dotted and all the T's are crossed.
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Originally Posted By Partisan:
Red Flag. If they just found this now --what else have they missed? And it seems like the seller is less than honest. If you still want this house make sure all the I's are dotted and all the T's are crossed.


GTF of that scammy deal OP. If you're determined hire a lawyer and a new title company to do an independent search.

eta - Just saw this below.

Originally Posted By dwheeler78:
It's more than she will make selling the house. I was told she just had to set up a payment plan and then we can proceed. I'm just getting nervous and anxious.


BULLSHIT!!! No way would I touch that deal.
Link Posted: 6/19/2014 3:09:27 PM EDT
But since our bank won't proceed until this is handled shouldn't we be in the clear. Once the lien is removed the house is mine to buy. I don't mind a few extra weeks wait. And I do have title insurance. So I won't be on the hook for shit.
Link Posted: 6/19/2014 3:18:51 PM EDT
And I'm not discounting the advice given here. I just trust my banker and agent. They have no interest in this particular house, so why lie to me that it will be ok? If things carry on over a month then we can reevaluate the situation.
Link Posted: 6/19/2014 3:22:18 PM EDT
[Last Edit: 6/19/2014 3:37:59 PM EDT by NoStockBikes]
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Originally Posted By dwheeler78:
But since our bank won't proceed until this is handled shouldn't we be in the clear. Once the lien is removed the house is mine to buy. I don't mind a few extra weeks wait. And I do have title insurance. So I won't be on the hook for shit.
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Exactly. It's a potential delay is all, and if the seller can't clear it, THEN the deal falls apart.

Posted Via AR15.Com Mobile
Link Posted: 6/19/2014 3:34:48 PM EDT
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Originally Posted By dwheeler78:
And I'm not discounting the advice given here. I just trust my banker and agent. They have no interest in this particular house, so why lie to me that it will be ok? If things carry on over a month then we can reevaluate the situation.
View Quote


Both your banker and your agent make money if the sale proceeds. They do have an interest.

I would move on to another property.
Link Posted: 6/19/2014 3:37:56 PM EDT
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Originally Posted By mcnielsen:
Seller must resolve this prior to closing or you will wait until they do. Unless the seller has the cash to pay it off...just walk away
View Quote

This and only this
Link Posted: 6/19/2014 3:38:33 PM EDT
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Originally Posted By mcnielsen:
Seller must resolve this prior to closing or you will wait until they do. Unless the seller has the cash to pay it off...just walk away
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Actually, money to satisfy the lien could be reserved in escrow from the purchase price to insure the lien is satisfied. That's one instance of what escrow accounts are for.
Link Posted: 6/19/2014 3:39:17 PM EDT
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Originally Posted By jon7400:
Eject.
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Why?
Link Posted: 6/19/2014 3:51:25 PM EDT
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Originally Posted By defenderhome:
Once they clear the lien, you should be GTG. Make 100% sure you have title insurance!!!
View Quote



Title insurance often won't cover things like this. Ask me how I know!!!! TI frequently only protects the lender and not the buyer!


GET A LAWYER! And hire one your self and don't use the one that the closing company of other party is using. You want one that will work FOR YOU and not just one that will make sure all the docs are prepared right. Buying a house is THE biggest investment that you'll ever make and requires a 30 year or more commitment to making payments so get a lawyer and make SURE that there aren't any got-cha's involved.

IMHO if the seller and his agent didn't disclose that there was a lien against the house, especially an IRS lien!!!, then I would walk, no, RUN away! The IRS can be brutal in their efforts to collect their money, and their fees, and their penalties, etc etc etc) and they don't care who gets in the way or if you were involved or not! You could be well and truely F*****D if you get involved with anything that has an IRS lien! I once saw the IRS seize EVERY car that was in the parking lot of a row of industrial buildings because the person the was leasing ONE unit owed them money!
Link Posted: 6/19/2014 4:00:55 PM EDT
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Originally Posted By redoubt:


Both your banker and your agent make money if the sale proceeds. They do have an interest.

I would move on to another property.
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Originally Posted By redoubt:
Originally Posted By dwheeler78:
And I'm not discounting the advice given here. I just trust my banker and agent. They have no interest in this particular house, so why lie to me that it will be ok? If things carry on over a month then we can reevaluate the situation.


Both your banker and your agent make money if the sale proceeds. They do have an interest.

I would move on to another property.




This. So much this!


A payment plan isn't going to clear a debt. At least not until ALL the payments are made and accepted by the IRS AND the IRS releases the lien. Even then they could still put on another lien if they decide that the missed something or that they want to add penalties against the owner. You REALLY should move on and find something free and clear! This has all the ear marks of being a financial disaster in the making! And it things do turn to S**T somewhere down the road, YOU will be left holding the bag! Not the seller or their agent or the bank or even your agent, Y O U!
Link Posted: 6/19/2014 4:07:41 PM EDT
You need a new house still
Link Posted: 6/19/2014 4:21:44 PM EDT
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Originally Posted By AeroE:


I bet that won't release the lien.

Eject.

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Originally Posted By AeroE:
Originally Posted By dwheeler78:
It's more than she will make selling the house. I was told she just had to set up a payment plan and then we can proceed. I'm just getting nervous and anxious.


I bet that won't release the lien.

Eject.



I'm with AeroE on this. The IRS isn't likely to release the lien just based on a payment plan. They don't accept IOUs very gracefully .

No lien release equals no sale.

I hope your closing attorney is on the ball. There might be other pitfalls awaiting you.

State taxes, for example.

Link Posted: 6/19/2014 4:24:13 PM EDT
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Originally Posted By dex357:




nightmare on elm street

find another property
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Originally Posted By dex357:
Originally Posted By dwheeler78:
It's more than she will make selling the house. I was told she just had to set up a payment plan and then we can proceed. I'm just getting nervous and anxious.




nightmare on elm street

find another property


This, the IRS will want to be made whole before the finance company that hold the lien right now.
Link Posted: 6/19/2014 4:28:40 PM EDT
Originally Posted By dwheeler78:
So we are one week away from closing on our new home and my realtor calls to tell me the title company found out the IRS has a lien on the home for unpaid taxes. Anyone ever dealt with this? I was told it could take 1-4 weeks to settle. Should I prepare my anus?
View Quote
Why did they wait until a week until closing? This is done with simple title search if the seller SOMEHOW didn't know the IRS was peppering his angus a while ago.

Anywho... If the seller has enough proceeds from the sale to cover the lien then stick it on the HUD-1 if they let you. There's no chance the IRS will subordinate to your lender so prepare to wait because getting the feds to hurry is a practice in futility.

Seriously, though. Ask the title company when they began the title search. A smart seller would start that before putting the house up for sale.
Link Posted: 6/19/2014 4:30:57 PM EDT
Link Posted: 6/19/2014 4:32:12 PM EDT
Talk about "inviting The Man into your life." An IRS lien?


Bottom line.... No My Problem (TM)

Want to sell me a property? Fine. Show me proof of it being lien-free, and we will start to talk.

Otherwise, you are wasting my time, and I am moving on.
Link Posted: 6/19/2014 4:35:46 PM EDT
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Originally Posted By Aimless:
What he said
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Originally Posted By Aimless:
Originally Posted By LePew:
Originally Posted By AeroE:
Originally Posted By dwheeler78:
It's more than she will make selling the house. I was told she just had to set up a payment plan and then we can proceed. I'm just getting nervous and anxious.


I bet that won't release the lien.

Eject.



I'm with AeroE on this. The IRS isn't likely to release the lien just based on a payment plan. They don't accept IOUs very gracefully .

No lien release equals no sale.

I hope your closing attorney is on the ball. There might be other pitfalls awaiting you.

State taxes, for example.

What he said
What he said with a heap of likelihood that there is other crap forthcoming. Restart home search.
Link Posted: 6/19/2014 4:37:17 PM EDT
oh they probably found it a while ago, just no one had bothered read the report till now.
Link Posted: 6/19/2014 4:39:08 PM EDT
Link Posted: 6/19/2014 4:45:25 PM EDT
Fuck that. There are other houses….
Link Posted: 6/19/2014 4:46:54 PM EDT
[Last Edit: 6/19/2014 4:52:22 PM EDT by familyman357]
Everybody except you stands to make money on the deal, but only if you go through with the sale. They are not really impartial. Keep that in mind.

I don't see how setting up a payment plan is any real help at all. If the seller stops paying, I have to believe that the IRS will come after the house - no matter who is occupying it.

I would be ready to walk away on this one, unless the seller can somehow satisfy the lien in a timely manner. Even then, I'd be uneasy. People who have trouble paying Uncle Sam usually have trouble paying other people too. Who knows who else might have a lien.

I closed on a house last fall. A few days before closing, the title company discovered that a bank had not released a lien on the house from a loan that the owner had paid back over 15 years earlier. It was a clerical mistake that the lien had never been released, but there was no way that the sale was going to continue without the release. They came through in time, albeit barely. It kinda makes you wonder just how thorough some of these title searches are.
Link Posted: 6/19/2014 4:46:56 PM EDT
[Last Edit: 6/19/2014 4:49:02 PM EDT by TStick]
Small IRS liens are not uncommon, and are easily resolved.

You said it was "more than she will make selling the house" - that isn't a number, and doesn't tell us anything.

Will she make 10 dollars selling the house and owes 50? Will she make 10,000 and owes 100,000?

The IRS may very well settle for what she will make on the house, or they may not; it depends on what the difference is. They will likely require an appraisal separate from the lending appraisal, and after that is completed will have to make a call on how to proceed.

1 week ain't gonna happen, 4 weeks is much more likely, but it could easily extend beyond that. ANNNND they could decide that the amount they would receive isn't enough, so they aren't going to release anything.

I know you said you could wait, but there are an awful lot of factors outside of your control here.
Link Posted: 6/19/2014 5:38:39 PM EDT
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Originally Posted By familyman357:
<snip>

I closed on a house last fall. A few days before closing, the title company discovered that a bank had not released a lien on the house from a loan that the owner had paid back over 15 years earlier. It was a clerical mistake that the lien had never been released, but there was no way that the sale was going to continue without the release. They came through in time, albeit barely. It kinda makes you wonder just how thorough some of these title searches are.
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As I understand it, that is exactly the sort of mistake that title insurance should cover. Whether it is to the benefit of the buyer or to the benefit of the lender is another question.

Since I'm looking to buy a house, does anyone in the industry have any advice as to how to tell if the title insurance policy covers the buyer?

What do I need to do to get a copy of the title insurance policy language up front (as in, days before the closing rather than day of closing).

Just ask for it?

Link Posted: 6/19/2014 5:41:44 PM EDT
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Originally Posted By defenderhome:
Once they clear the lien, you should be GTG. Make 100% sure you have title insurance!!!
View Quote



This. If you are getting a loan the bank will make sure everything is clear. A full title search isn't done until the process is very far along, because usually the buyer has the problems that hold things up. A delay yes, a game changer no.
Link Posted: 6/19/2014 5:44:01 PM EDT
I just bought a house that was subject to an IRS lien. Took about 4-5 months to clear the damn thing. And yeah, make sure you have title insurance.
Link Posted: 6/19/2014 5:45:58 PM EDT
If you are buying from a bank have them clear all liens.

If this a a private sale. It's FO time.
Link Posted: 6/19/2014 5:46:19 PM EDT
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Originally Posted By Surveyor75:



+87

I'm in the process of buying 18Ac. I made damn sure to have title insurance.
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Originally Posted By Surveyor75:
Originally Posted By defenderhome:
Once they clear the lien, you should be GTG. Make 100% sure you have title insurance!!!



+87

I'm in the process of buying 18Ac. I made damn sure to have title insurance.

This.

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