Let the Buyer Beware... Anything to Salvage? - Posted by Steve Heller

Real Estate Investing
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Posted by Irwin on May 27, 1999 at 03:40:30:

My thoughts are:

  1. If title insurance is available in your city, the sellers should have agreed to provide it rather than building a new abstract. They cost themselves several hundred dollars.
  2. Only sellers sign deeds, and it should be a Warranty Deed, not a Quit Claim.
  3. The I.R.S. will probably accept the money and release the lien, unless they feel that the lot is being sold too cheap. If I.R.S. won’t release,or if you don’t agree to pay what they require, you are entitled to your $500. deposit back. Hopefully, you won’t be out anything in the end.
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Let the Buyer Beware… Anything to Salvage? - Posted by Steve Heller

Posted by Steve Heller on May 26, 1999 at 20:04:20:

Hi everyone,

I entered a purchase agreement to purchase a lot in a nice neighborhood around April 14th. The owners agreed to sell for $4,100, I put $500 down. I required that they bring the abstract up to date so I could have it review by my attorney. They wanted to do a ‘Quit Claim Deed’ right on the spot. About 7 weeks later the abstract was built (from the ground up) at a cost of around $600. One of the owners called me and said the abstract was complete and asked if I was ready to sign the ‘Quit Claim Deed’. I said not until I had my attorney look at it. She brought the abstract to my office and I took it to the attorney. Later the attorney called and said page #209 was missing. He and I agreed that we had to know what was on the missing page. He called the abstract company and they said that page contained a federal IRS tax lien for $12,000, which I would have assumed had I signed the ‘Quit Claim Deed’ the owners previously suggested.

I realize this post is a little long but I wanted to share the experience with you in case you are ever tempted to cut corners. The attorney suggested that the owners go to the IRS office (which they agreed to do) and see if the IRS would apply the purchase price of the lot to back taxes owed in exchange for the IRS releasing their lien. I’ll let you know what happens. If any creative minds have a solution, please let me know.

Thanks,

Steve Heller