How to sell properties fast when title shows IRS liens on owners w/comon names?If IRS buys bck prop how long til I get my $ bck?


#1

When I check with title to see if there are and IRS tax liens on the owners, I am finding that 9 out of 10 names are too common with liens attached to the name because I live in Los Angeles and there are so many people here. It seems to be almost impossible to find a property that is completely clear unless the name is really uncommon.

I have read many of the posts with great information and insights into IRS liens and the IRS right of redemption. It is clear that the IRS has the right to redemption within 120 days. And that this can and does cause issues with buyers getting title insurance. So, it is, a Risk that I could have my money tied up for that about of time. But it also seems that there are no reports on the forum of anyone with the experience of having a property bought at trustee’s sale redeemed by the IRS. I spoke with my title officer and he said it was a big issue because there will be equity. I know that the IRS would get a better price than was paid at the trustee’s auction. So one would think they would more than likely buy it back and I will loose a lot of time with my money being tied up.

My question is how are all these big investors doing this? I see a lot of people buying at auctions and closing escrow in less than 2 months. How are they not having title issues and having to wait the 120 days? Title told me that when I give them an address and the owner is John Smith and they find multiple John Simth?s (which is usually the case) they will not issue title until after the 120 days. Is this just part of the investing process I am unaware of? Should I just expect that all my properties I buy will take that long to sell?

Also if the IRS decides to buy back the property how long will it take them to return my money? I was told that they could decide on the 120th day that they want to buy it back. SO I could loose 120 days waiting for their answer. I am still unclear if that happens how much more time will I loose waiting for my money?

Thank you for helping me understand this.


#2

Sounds to me like you need a better title co.

First, the IRS rarely buys property back. Doesn’t matter how much equity, they have no budget and pretty much only redeem properties that they have a ready buyer for.

Second the lien may not apply to your owner. If you can prove it isn’t, you are all set. This used to be easier before they clamped down on social security numbers so hard a few years ago. Still if you can show the title co that each of the outstanding liens is NOT against your party then the 120 days won’t apply. This is likely how the other deals you’ve watched have gotten done in 2 months.

Even if you can’t get the title company to close early, I’ve closed escrow on a number of properties with IRS liens on the 121st day without a hitch. Just remember that if they did redeem they would not have to repay any improvements you made to the property so do those at your own risk.