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Brian J. Burds' Blog

By Brian J. Burds | Agent in El Paso, TX

The Federal Tax Lien

120 Days 

That is how long you must wait if there is a federal Tax Lien against that great little foreclosure you just decided to put a offer on. So buyers beware. I just had to inform a client that the great deal  he is getting will unfortunately have to wait a few extra months. 

The previous owner who was foreclosed on had three outstanding federal tax liens and the title company will not insure the property until the IRS's right to redeem expires which is 120 days after the foreclosure deed is signed. 

After hearing this the first question that came to my mind was what if the IRS decides to redeem. 

 I did a little research to try and make some preliminary measures incase they do decide to redeem and I came across a few interesting facts. First most title underwriters will actually still underwrite homes when they have small tax liens because the IRS very rarely redeems in fact I could not find one case where they had. It appears that the underwriter only worry about it when the home has over 35000 in liens. 

So on that next foreclosure purchase make sure to take a look at the title commitment asap to ensure there are no a liens Happy Buying 

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