Re: Will IRS sell their right of redemption? - Posted by Dave T
Posted by Dave T on July 04, 2002 at 22:46:58:
I don’t know if the IRS will sell their redemption rights, but the IRS will exercise their redemption rights if there is a guaranteed buyer for the property at an IRS tax sale.
In this case, if the IRS exercises their redemption rights, the property will go to an IRS tax sale. The minimum acceptable price for the property will at least cover the full amount of the $8K tax lien, the $150K they will have to reimburse the foreclosure buyer, plus any other costs the IRS may incur. The IRS will list the property for sale at auction with a list price at FMV, and at auction they will not accept less than their minimum bid price.
You can offer to be a “guaranteed buyer” by offering to pay the IRS minimum bid price for the property and putting up a substantial deposit. As the guaranteed buyer, you promise to buy from the IRS only if the IRS is not successful in obtaining a higher price at their auction (assuming you do not attend the auction and become the winning bidder yourself).
In practice, the IRS does not exercise their redemption rights unless a guaranteed buyer is waiting in the wings. If the foreclosure buyer is concerned about protecting his equity in the property, he could just pay off the IRS liens himself to preempt the IRS from exercising their redemption rights.