Home Buying in 19145>Question Details

Philly.phan, Home Buyer in Springfield, NJ

Inability to clear a lien by settlement

Asked by Philly.phan, Springfield, NJ Wed Jul 11, 2012

My parents always lived with my fathers parents. 20 years ago my grandfather passed away so the house went to my parents. My father lost his business and now needs to sell his house. He has already gone at least 50k under market value. He was not aware of a lien for inheritance tax on the house. It is about 15k which my father does not have and was told he needed to go to settlement. He is being told (threatened from the buyer) that he will be sued if he doesn't "come up" with the 15k. My parents are 70 years old, have no way to get this money. Can they be sued if they can't complete the settlement/closing transaction? This lien just came to light 3 days before settlement.

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al rappa’s answer
I read the other replies and as a 31 year veteran of the Real Estate Industry, I agree with their postings.

I've seen "estate" matters "gum up the works" several times. Usually when the heir(s) did not seek legal advice upon the demise of their loved one. Most recently I had worked on a similar problem of an unpaid inheritance tax. that was found to be owed from; THE ESTATE PRIOR TO THE ESTATE I was getting ready for the closing. It had to be addressed and cleared for the title company to insure the Title.

I hear statements such as "i was given the house in the will", "I'm the executor" , etc.
My opinion: The decedent should be respected and their affairs cleared that, "in my mind" is also paying your inheritance tax as soon as possible. Also, the losing his business part makes me wonder. Will there be creditors looking for money too?

With that said, take your father, with all the paperwork you can find and go over everything with an attorney. The appointment should also include getting the attorney's opinion on the buyer having a valid breach of contract suit and how to handle that.

Good luck with your transaction.
0 votes Thank Flag Link Wed Jul 11, 2012
Obtain a real estate attorney. All liens or judgements must be cleared or escrowed prior to selling. In Pennsylvania if its the standard agreement of sale and a seller can't clear title their obligation under the contract is to pay the buyer back any costs they incurred
0 votes Thank Flag Link Sat Jul 14, 2012
by the way, you say he has already gone "$50,000 under market value"......not quite sure what you mean, as market value is what a buyer is willing to pay, not what a seller thinks it may be worth........it also is not what the town assessment is........that has nothing to do with true"market value", even if homes may be selling in the vicinity of their town's assessment.

It's only worth what a ready, willing and able buyer will pay for it......and what an appraiser will appraise it for..

Or......although I doubt it..........do you mean he owes more than the house is selling for?

Those are 2 very different scenarios.

Any liens must be cleared before a closing can take place.
Read the contract - it will usually state that the seller will provide clear title to the home.........and that they have sufficient funds to do so.
0 votes Thank Flag Link Wed Jul 11, 2012
Aren't your parents using a real estate attorney to handle their closing?

That is the typical way it is handled in this part of NJ.

Who is representing them?

Email me, and I will give you the names of several local attorneys - your parents need representation.

No one on Trulia can, or should, give you a legal opinion, or legal advice, and that is what you need at this point.

Best wishes........

0 votes Thank Flag Link Wed Jul 11, 2012
All thought your in N.J. and I'm not an Attorney and I'm in PA I would recommend you contact the closing officer and see if this can't be put in escrow and then escrow can close. Your agent should be able to handle this for you. Please feel free to call me at 215-725-5700 X49

Philip J. Cunningham Sr
V.I.P. Realty Corporation
7942 Bustleton Ave
Philadelphia,PA 19152
Web Reference: http://www.GreatPaRE.com
0 votes Thank Flag Link Wed Jul 11, 2012
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