Foreclosure in Pennsauken>Question Details

Segafour, Other/Just Looking in Jersey City, NJ

When a house is listed as a short sale. Then it states tax lien on house. Can the house still be sold by owner?

Asked by Segafour, Jersey City, NJ Thu Sep 15, 2011

Info about houses with tax liens.can house still be sold by owners without paying back taxes or does that mean bank has forclosed and taken house back

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Is the tax lien a IRS or NJ State Tax lien or a property tax lien? These are handled quite differently.

IRS or State Liens can be removed to proceed with the sale. But these liens will stay withe the sellers.

Property Tax liens will need to be paid before title can be transfered and will probably be paid at closing. The bank proceeds should allow for these payments and should be on the HUD statement.

I cannot tell what stage you are in at this point. But it sounds like you found a listing that states it has a tax lien on it. Maybe meaning they want the buyer to pay the lien. Not likely!? need to clarify...

But to answer your questions yes an owner can sell a house with a tax lien on it but that is why you need proper representation when buying a home. Title insurance will protect you from this.

No it does not mean the bank has foreclosed but who ever owns the tax lien can foreclose if the redemption period is over. usually 24 months. Banks will generally protect their investments and pay those liens off.

Larry Sarlo
RE/MAX Preferred
Turnersville, NJ

1 vote Thank Flag Link Thu Sep 15, 2011
1) When a property is sold the title must be clear for the new owner. That means all liens must be satisfied. When it is a short sale the lender must approve the sale with all tax liiens satisfied. If the bank agrees with the net yield recovered, all liens & closing costs will be paid & the sale will go through. If not the sale will be denied and in most cases the lender will inform what amount is needed. The buyer has the option of increasing the purchase price to meet the net or backing out. If they opt out the Real Estate Agent has the ability to remarket the property knowing what the bank needs. 2) A tax lien occurs when the homeowner has not paid their taxes. The municipality will set a date each year to sell off the tax liens. Investors can attend & pay the unpaid taxes for the home owner. In return they will earn as high as 18% interest on their money. They are guarranteed to get paid but never know when that will happen. They can foreclose after 2 years but usually the first mortage company will do it first. If a house is sold at sheriff sale the tax liens may or may not be satisfied.

Joseph Yaniak
1736 Rt 70 East
Cherry Hill NJ 08003
Office (856) 424-4040 Ext 187
Fax (856) 751-2791
Cell (856) 296-4999
0 votes Thank Flag Link Thu Sep 15, 2011
It can, but the tax lien will need to be paid off as part of the sale, before title can be transferred. If the Seller has no funds, the bank or Buyer will have to take responsibility for it. Are you also asking if the house can be "For Sale by Owner"? While it can, there is no need. Since the Seller has no funds, the bank will pay the Realtors' commission. It would be in the Seller's best interest to hire a Realtor to help this navigate this process and price the home aggressively to sell quickly before a tax sale of the finalization of foreclosure.

Hope this helps! Feel free to contact me with more specific questions. Eric
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0 votes Thank Flag Link Thu Sep 15, 2011
In order to be issued a clean title at closing, all exisiting liens need to be satisfied beforehand...
0 votes Thank Flag Link Thu Sep 15, 2011
The house can certainly sell but the lien will need to be paid at closing. The owner's bank may or may not contribute money to cover that lien, and if they do not then the buyer will need to pay for it.

You can learn more about the short sale process here:
0 votes Thank Flag Link Thu Sep 15, 2011
Short sales mean the home is still owned by the individual homeowner not the bank. Foreclosures are when a bank owns the home. Tax liens need to be satisfied either way and the bank evaluating a short sale will be well aware of the lien and will take that into consideration in accepting an offer. So, no, the home can NOT be sold unless taxes are satisfied.
0 votes Thank Flag Link Thu Sep 15, 2011
Tax leins do not have anything to do if they were foreclsoed. it depends if tehy ar an irs lien or a property tax lien. A house can be sold as a short sale if the property taxes are paid with the proceeds of the short sale and approved by the sellers lender. An irs lien would either have to be removed, negotiated or paid and can take 120 days extra just to hear. I would ask what type of lien before jumping in.
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0 votes Thank Flag Link Thu Sep 15, 2011
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