Re: IRS Lien and Foreclosure - Posted by Troy M
Posted by Troy M on March 14, 2001 at 12:39:59:
Who’s willing to cooperate here…buyer, seller, or both? If the buyer and not the seller, I see no play. If the seller or preferably both will cooperate, you may have a shot. ??
I recently purchased a home from a guy in almost the exact same situation. Originally, the buyer (on the CFD) wanted to sell to me, but he had $40k in IRS liens. So, we did a simple cancellation of contract between buyer and seller, and I purchased the home directly from the seller (who did not want the home back). And I ok’d it with a title co. first (got title policy when I purchased). BTW, the first title co. I talked to would not do this, but Stewart Title Co. agreed to insure it.
If the buyer is not cooperative, you may be able to work out an agreement with the seller on some type of delayed closing purchase after the foreclosure (i.e. L/O or CFD w/ no money down until title is clear). You’ll have to be sure you’re guaranteed marketable title after the IRS lien is released. As part of your due dilligence, be sure that the proper notice is given to the IRS and proper receipt of notice is returned by the IRS PRIOR to the foreclosure sale so that the lien will expire in 120 days.
Alternatively, you may want to apply with the IRS for a release of lien right away (after the foreclosure). I’ve never done this and am not sure how long it may take (120 days perhaps?). I chose to wait the 120 days on another property I purchased at the Trustee sale rather than deal with the IRS beauraucracy (sp?). HTH