I understand that you are still responsible for IRS liens,? but assume you can find out what is the IRS lien amount and it is not a big amount, why do you still want to pay for title search?
Please advice.
Thanks.
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why pay for title search if you are sure you are buy from the 1st loan and know the IRS lien amount?
You are typically NOT responsible for IRS liens as long as they are junior, though the IRS would still have a 120 day right to buy the property back from you for the price you paid (redeem).
IRS liens are not the only thing a good title search can uncover. How can you be sure its a “first” without a search. Note that I have purchased foreclosures that everyone thought was a third, which wiped out what everyone else standing on the steps was a first. Pretty darn rare, but you do increase your risk by making assumptions.
Sean,Thanks for the kindly reply. So does that mean I will have to run full title report on all the property I am interested? from another post, 3rd party will have to look at 22 properties before buying one at the auction, my title search cost alone would be 22 * $145? do you always run the full title report or just preliminary? some web site sell full title report for only $145, how trustworthy are those? or you just go for a local title company? Thanks again for you expert advice.
That’s a great question and it really comes down to your tolerance for risk, and your ability to do your own research. For my investing I ran an in-house title plant that essentially did prelims (not as formal as the title co, but the same basic research), on 400-500 properties a month. I know other trustee auction buyers who rarely look at more than a property profile, though they fully understand the cost/risk tradeoff they are making. I don’t know of any auction buyers that actually buy pre’s on every property they might bid on. Math just doesn’t work at the typical prices for a pre - and remember those prices just get you the research, you still have no title insurance. ?