Tax Lien on Short Sale?
I am in the process of buying a short sale. Unfortunately for me there is a personal income tax lien on the property. The bank approved the short sale which makes no sense because this tax lien has been on the property for 3 months before the bank approved the short sale. I am questioning how the bank could approve the short sale with a tax lien on the title. Anyway, my lender believes that this can be cleared up by showing the IRS there is no value in the property that the IRS has the lien on. Has anyone had any experience in something like this? Is it still possible for this sale to go through?
There is a tax attorney on this problem. The bank approval specifically states the seller gets no money from this house sale.
Must be a lot of idiots on yahoo answers! I just found this.
http://activerain.com/blogsview/1278949/short-sale-removing-an-irs-tax-lien-from-a-property
The IRS is not going to lift the lien, not until hell freezes over.
The lien has to be paid or their is no closing. Period. There is no way around it. The seller has to pay it or they are not sellling.
5 Responses to “Tax Lien on Short Sale?”
Forget it. That IRS tax lien must be paid. Your option is to Lend the cash to the seller so he can pay it or walk away and find another property
Comment made on March 30th, 2010 at 11:39 amReferences :
Mortgagees (lenders) don’t do a title search before approving a short sale. The seller, not the mortgagee, needs to get the lien released and since the seller won’t be receiving any money at closing, it’s going to be difficult to get the property released from the lien, especially if the seller has nothing else of value. Now your lender says the matter can be cleared up by showing the property has no value. Think about it, you are paying $X for the property, how can someone say there is no value? You need to talk to an attorney because if your contract is "as is, where is" this may include tax liens. You definately don’t want pursue the purchase if the lien can’t be released.
realtor.sailor
Comment made on March 30th, 2010 at 12:00 pmReferences :
I’m a Realtor
The IRS is not going to lift the lien, not until hell freezes over.
The lien has to be paid or their is no closing. Period. There is no way around it. The seller has to pay it or they are not sellling.
Comment made on March 30th, 2010 at 12:27 pmReferences :
Your lender is an idiot. Tax liens take first place. It will have to be paid off at closing or before.
Comment made on March 30th, 2010 at 12:52 pmReferences :
The lien will have to be paid, because the title has to be given to you free and clear (any liens on the property must be paid before you get the title). Usually the lien is paid from proceeds at closing, which means if the seller is not getting any proceeds then the lien will have to be paid from the bank’s proceeds. If the bank agrees to pay off the lien from their proceeds you shouldn’t have any problem. You should have your realtor call the listing agent to find out what will happen.
Comment made on March 30th, 2010 at 1:06 pmReferences :
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