Help--Deal With Tax Leins--Don't Know What To Do!!!
Okay-I really need everyone's help on this one. This is the first time that I have ever had to deal with tax liens.
I want to wholesale a house that recently went through foreclosure. The owner tells me that a company bought the tax liens on the property and it will cost 12,000 to clear the liens(and the title will be clear) The title is still in the seller's name. My questions are as follows:
DO I need to contact the company who owns the tax liens and have them come to closing or will the closing attorney just subtract their proceeds from the seller's check at closing?
Does the company who owns the tax liens have to sign a release or anything at this time to permit me to sign a contract with the seller?
If I am confusing everyone--please let me know but I am clearly out of my league here!!!!!
Sorry---I think I posted this in the wrong forum!!! Will try to re-post in tax lien forum. However, any help would be appreciated.
It occurs to me that the forecosure may have eliminated those liens, but there's an easy way for you to find out what's currently outstanding, in way of liens and encumbrances, against the property.
Find and discuss this with a local title co. officer and see what they're going to require for you to be able to SELL this RE...then you'll know what you want done or will have to personally do when you buy it.
Good luck.
John Merchant
In Ohio all tax leins are removed at foreclosure. If there is an IRS tax lein, they have 120 days to redeem the property which means they can buy it from you at your purchase price.
I am under the impression that tax leins can only be placed by gov bodies, that being the case, it is unlikely that it was "Purchased" by a private company.
If you have an IRS lean, you may be able to settle it for pennies on the dollar. Recently I purchased a property that had over 400k in irs tax leins. I didn't want to wait the 120 days or risk them redeeming the property ( this is a big dollar property with large profit) so I offered them 10k which they gladly accepted, and everyone walked away happy.
Check the mortgage foreclosue paperwork filed with the court. It will name as defendants the holders of any leins that are being released by the proceeding.
Hope this helps.
Tax liens can be placed by any one. i do this all the time i buy the tax not meaning if you owe 1300.00 in property tax and its in default i can pay that amount and charge you upto 25 percent interest a year so no in a forclosure my tax liens are not removed you must pay them before the home can be sold or be paid at settelment out of the sellers check
Perfect...that is exactely what I needed to know. Looks like the tax liens will be paid at the closing table out of the seller's proceeds. My title search will give me more info, I just needed to see if this deal was going to be too confusing or too much of a hassle to handle. THanks for all your help
Also be aware that there may be difficulty in getting title insurance on any property that has had a tax lien.
I have been advised that if the property was acquired with (or via) tax liens that it may take 1 - 3 years before title insurance companies are willing to offer title insurance. That can be a hinderance to getting a mortage....
Has anyone out there actually experienced this problem?
[addsig]
Tax liens stay on the property until it gets redeemed or if the redemption period runs out, they own the property free and clear. You must make sure that you get title insurance,and the title company will make sure that it gets removed by having it redeemed, i.e. paid off. There is no other way of removing it. If you don't remove it, it will own the property once the redemption period is over. This is obviously, as you have stated, not an IRS lien, as someone has spoken about, or any other kind of lien that can be negotiated and/or removed. Good luck!
Richard
results_one----------------
First, you should always specify the state when you talk about foreclosures or tax sales. Every state has different laws.
Next, in most states that have tax liens, you just pay the delinquent property taxes to the county treasurer/tax collector. They pass it on to the investor that owns the lien.
In the state with which I am familar, the foreclosures of loans secured by the property DO NOT wipe out the property taxes, which are a superior lien. However, if it is so, it is probably only in states where the foreclosure is a judicial foreclosure.
Don't worry about that matter of title insurance, the poster did not clearly understand your situation. The poster was referring to the difficulty or impossibility of getting title insurance on properties bought through the delinquent property tax collection process. This property did not go that route, so there is no issue about title insurance, probably.
Good Investing********Ron Starr***********
REF TO TAX LIENS ,,BARNS & NOBLE,,PROFIT BY INVESTING IN REAL ESTATE TAX LIENS,,BY LARRY B LOFTIS Esq.,,WILL TELL YOU ALL LYOU NEED TO KNOW ABOUT TAX LIENS,STATE BY STATE...IT WILL GET YOU STARTED...$20.00...IT BEATS $10,000
chash98
Quote:
On 2003-11-03 10:39, results_one wrote:
Okay-I really need everyone's help on this one. This is the first time that I have ever had to deal with tax liens.
I want to wholesale a house that recently went through foreclosure. The owner tells me that a company bought the tax liens on the property and it will cost 12,000 to clear the liens(and the title will be clear) The title is still in the seller's name. My questions are as follows:
DO I need to contact the company who owns the tax liens and have them come to closing or will the closing attorney just subtract their proceeds from the seller's check at closing?
Does the company who owns the tax liens have to sign a release or anything at this time to permit me to sign a contract with the seller?
If I am confusing everyone--please let me know but I am clearly out of my league here!!!!!
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Hello results_one
Since this is your first time dealing with tax liens - you did, research and study up before you jumped did you not?
If the house was foreclosed on why are you dealing with the previous owner as, they have no rights to the property short of any redemption! Are you dealing with redemption?
If the property was foreclosed on and the subject liens are not superior to the foreclosing, party they are no longer attached to the subject property. Are the liens not superior?
If the liens are related to Local City, county and or township tax related liens it becomes the responsibility of the purchasing party to pay them.
I have a real big question since the property has been foreclosed on and you are dealing with the property owner do you know what the property sold for at foreclosure?
If you are dealing with a redemption issue your offer better cover the high bidder, fees, interest and any penalty that may apply or you will not have a deal.
I have also bought out at a discount on tax liens that where purchased by third parties.
[addsig]