federal lien

[lexilady]

What is the name of your state? Missouri

My husband and I are buying a house. We are getting an FHA loan and have satisfied all of our obligations. The seller has agreed to paint the outside of the house to meet FHA appraisal guidelines but has not done it yet. The big issue is that the owner neglected to tell his realtor or the title company that there is a $19,000 federal lein on the house (apparently the seller hasn't paid his taxes in a few years). Our title company thinks that this will not be taken care of by closing on April 1, 2004. We have to be out of our apartment by April 4. Can we sue the seller to make him pay for our expenses and not being able to move in. Pain and suffering or something like that?

 

[BrokerRE]

Federal Lien

The Lien should be able to be paid by having the Title Company withhold the amount of the Lien from the Seller's proceeds. This shouldn't hold up a closing in most cases unless the Feds are unable to provide an exact payoff in a timely manner, or if the Seller's proceeds aren't nearly enough to cover the debt.

You can certainly sue anyone for anything, but I think the question you wanted to ask was, "would I be successful if I sued for expenses connected with the extra wait?"

The only thing I can say is that in the thousands of closings I have been involved with, not once have I ever seen a buyer successfully sue a seller for extra living expenses.

I have however, seen a buyer re-negotiate a little something extra through their Realtor. This may be a better avenue for you. It all depends if the seller is more motivated to sell, than you are to buy.

 

[lexilady]

lien

I am the real esate agent acting on our behalf. The proceeds of the sale are not going to cover the lien. I have never dealt with a problem like this before. The seller is not willing to negotiate anything with us and has been very difficult throughout the whole process and we are paying him his full asking price. We are considering not renewing the contract if we do not close on time but will be out the money for the appraisal, inspections and bank fees we've paid up front. I think the seller should be responsible to pay for this because he is the one who neglected to get this taken care of in a timely manner. Is this something we might be able to get from him in court or if we sue him and he still owes the government money can we get anything? Or is it basically a second lien filed against the house in our name?

 

[I AM ALWAYS LIABLE]

My response:

This sounds like it's more trouble than it's worth. Is this house the do-all, and the end-all, to your house hunting? If not, move on to the next house and do a little more research on the title for liens before you invest your costs, like you did with this house.

Why don't you tell the owner that you'll merely buy the house at the lien sale. That way, you'll get the house at a bargain, and he'll be stuck with the "short sale".

Leverage.

IAAL

 

[nextwife]

MY experience has been that generally the Feds want what they can get and will often agree to take whatever proceeds there are for them and release the REAL ESTATE from the lien. Someone needs to arrange this with the lienholder. It is done. I 've seen IRS officers come to closing to take a check and exchange the release for it. They will often allow the title company to hold the release in trust in exchange for their check. Owner will still owe any balance.

But the Feds will not generally stop a closing if there is not enough equity to pay them in full. They want what they can get and have a history of agreeing to release RE from liens when there is an equity shortfall to cover their lien.

 

[BrokerRE]

let the house go,

but sue for the commission.

The listing agreement probably has language which says, "if a ready willing and able buyer at full price and terms is brought to the seller, regardless of whether the sale is consummated a commission is owed".

However, if this guy has a large tax lien, he's probably uncollectable.

 

[nextwife]

Before walking from the deal, at least make some phone calls (as the broker) and at least SEE if the feds will agree to release the RE from lien if they are paid as much equity as there is left for them after the other payoffs. I've seen this done in a matter of days to get a deal closed. They fax the escrow/title company the agreement terms and the escrow/title company complies at closing. One day of phone calls isn't worth your prepaid expenses before bailing?

 

[HomeGuru]

Good idea.