Releasing The Liens
Kim's got some hoops to jump through if she wants to get some liens released for a foreclosure home she's buying.
QUESTION: Kim sold one of her two homes and is buying a foreclosure. The foreclosure property has 3 liens; the Georgia state lien and homeowners association liens are less than $4,000, while the federal lien is for $197,000. She asks Dave about how to work around all this to buy the property.
ANSWER: The IRS will release their lien at closing for proceeds. Look at each of the 3 liens and see which one is first, according to the date. If the IRS is third, you can pay off the first 2 liens and then offer $1,000 to the IRS, they’ll release for proceeds. A certificate of discharge will need to be done. If it has been done and they are willing to discharge the lien for some reason, check with your title company to make sure they are willing to issue title on that. You need to do this through a title company and have a proper closing so that you are sure that you have clean title. You absolutely want a clean title and title insurance.