Monday, August 27, 2007

Why tax liens must be paid off...

I saw this letter on

DEAR BOB: We are buying an out-of-state house. The closing is scheduled for about two weeks from now. It is a "for sale by owner," and the sellers aren't too knowledgeable about the sales process. We just received a document from the title company listing the recorded liens against the sellers. The list includes a lien from the state's Bureau of Child Support for more than $12,000 and deferred property taxes for about $2,000. None of these liens were previously disclosed to us. If the sellers are unable to pay these liens at or before the closing, what are our options? We don't want to be homeless when we arrive in our new city if something goes wrong with the closing. --Rebecca L.

Tax liens are public record and the title company easily saw the problem before closing. Before the deal can move any further, the tax liens must be paid off. This is typical around America, properties that may have old liens against it. In a traditional closing, those liens will need to be removed -- which is fortunate for you, the tax lien investor.

Tax liens are one of the safest investment vehicles out there, especially on homestead properties. The last part of the letter explains it all, "We don't want to be homeless..."

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