tax liens

I want to know if I plan to buy a property at auction, and if that property has federal and state tax lien on it, am I supposed to pay IRS for? the amount the previous owner owed?? Thanks.

Depends on whether the lien is junior or senior to the loan in question. If they are junior then they will be wiped out by the foreclosure auction and you will not have to pay them. The one exception that I’m aware of is that the IRS does have 120 days in which to redeem the property (buy it back from you at the price you paid) so you won’t be able to resell it with title insurance until that time is up.

Sean, to determine if the lien is junior or senior, you look at the original loan date or the auction sale date?? Thanks.

In addition to the last comment, I also like to ask if I already purchased the auction property, will IRS contact me or I should contact them to pay off any tax liens?? How should I contact them?? Why the new homeowner is responsible for the previous homeowner’s debts?? If there’re two names appeared on the auctioned loan, should I check both names in the county recorder just be sure about the lien amount?? What if this homeowners have multiple properties before?? Which new homeowner should be responsible for the tax liens?? Thanks.

Is it possible that the previous homeowner has other tax liens recorded in other county locations in the united states?? If I am the new homeowner, will I be responsible for other county’s record?? How can I make sure this property is clean before I buy?? How much would a title company charge for the service?? Thanks.

Date the lien was recorded and the document number. Though you also need to be aware of things like subordination agreements.

For the most part the new owner is only responsible for senior liens. No need to contact the IRS re:redemption. If they want to redeem they will contact you. ? NOTE: There are a lot of issues around title, lien priority, etc. You really need to be careful buying at auction unless you have a solid understanding of the property’s title and the affect of the foreclosure on the title.

To be lien against the property they need to be recorded in the county the property is located in. ? You should be able to get a preliminary title report that reviews these issues from a title company for around $350. Note that even title companies make mistakes, which is the reason there is title insurance. You can not currently get title insurance on an auction purchase - so there is always title related risk.

Sorry.? I want to make this clear to myself.? So determine if the tax lien is senior or junior, you compare the lien recorded date against the property?purchased date by the previous ownwer or against the auction date when you purchase the house?? Thanks.

For both junior and senior tax liens you don’t have to contact IRS, but wait for their redemption?or it only applies to junior liens?? How should you contact IRS for senior liens?? Thanks.

I have found several different types of liens during my searches, such as IRS, Franchise Tax, Child Support, etc. What I am confused about is that these seem to be recorded against the person and not the specific property. Is this true or is the property reference somewhere on the lien document? If the liens are recorded against the person, but apply any real property they own, what do I do about name changes? Certainly common with women but also appears to be common with others as well. I know when I have gone through escrow I usually get some questions about idenity. Mostly becuase there is a guy in Florida with my name who has done some bad things. So I suspec the title company is doing some sort of search to see if I am who I say I am and if I have bad stuff somewhere other than at the County of record. Is this just a risk we have to live with? I bought an REO earlier in the year and I got title insurance in that transaction.

I believe the lien has to be filed in the county the property is located in, in order to attach to the property. Name changes are definitely an issue. As is trying to figure out if a lien against John Smith, is against the John Smith that lives in the property in quesiton, or some other John Smith. ? Which is why title insurance is always a good idea. One of my first recommendations to folks who want to buy at auction is to get to know a title officer at their title company. Note this is NOT the same as the escrow officer. The title officer is responsible for staying current on these issues and for making the decisions on what the title company will, or will not, insure. They are a great risk for getting a handle on the actual risk associated with various transactions. I’ve gotten to the point where I rarely need to call, but things change over time so it is good to maintain the relationship.

Neither. You compare the date doc# of each loan/lien to the other. Ones recorded earlier are senior, later are junior.

You would have to pay off a senior IRS lien. Just call the contact information on the lien document itself. If you are reselling the property, the title company can also take care of it for you in escrow.

How can I tell if the document is subordination agreement by looking on the document title of the online county record?? Will it be labeled as subordination agreement?? Thanks.


Can I assume the following steps for a quick check of whether the title is clean?

  1. look who’re on the title of the property
  2. Use these people’s name as the index to search in county record to see any senior liens or subordination agreements
  3. If steps 1-2 is clean, contact title company to have quick check?on the title.
  4. To be sure, ask the title company to run a preliminary report to make sure. (If other people have the same names, do you think the preliminary report will distinguish that?? How about if the same people use different names?? Will the report show?)?
  5. Beside the liens, are there any debts or concern attached to the property?? Will all the liens show up if you only search the index by names and assume they never change their names?? When people record the liens, they always use their official name or it can be anything?? For example, can I assume Peter David and Peter David F. Jr. are two different people?? If people pay off the liens, how do they record it and make sure the liens are off from their property?? If the person sold another house to someone else before the property you are interested, can you assume all the senior liens have been taken care of by that transaction?? How?will you know?

That’s a big list. Unfortunately I’m going to have to cry “uncle”. I’d suggest finding a local “title abstractor” and seeing if you can’t pay them to teach you how to abstract title. You might also do a google search on abstracting title, you’ll likely find some courses as well.

I am curious if a lien has been paid off, how would it be recorded?? If a trustee sale has a senior lien, but the homeowner also sold another house in between the senior lien and the trustee sale,?would the senior lien be wiped out when title insurance is granted to that transaction?

I want to purchase a trustee sale at auction.? The trustee sale loan is recorded in March of 2008, but the owner has a fed tax lien recorded in Oct. of 2008 for the amount of 30K.? Is this a junior lien?? This amount is so big, do you think IRS will redeem the property?? There is also a mechanic lien filed against the same name, but at different address and was recorded before the loan, do you think I?can ignore it since it’s for?different address and there’s no way to verify if this is the same person??Thank you so much?for your advice.