Home Buying in Sacramento>Question Details

Cds, Home Buyer in Sacramento, CA

'can a house be purchased if the buyer has tax liens'?

Asked by Cds, Sacramento, CA Fri Dec 18, 2009

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Years ago there was a family who had back taxes owed to the town. They were going to lose their house. They sold some of their land to someone else. They did this in front of one of the town officials who saw that the taxes were paid off and the property tax lien was removed at the same time the land was sold.

It may be possible to do this in a similar way in your area. if you do not use a realtor for help.
0 votes Thank Flag Link Fri Dec 18, 2009
Hi Dds, It sounds to me like Elizabeth and Tamara got the question (and answer) right. You are wanting to buy a house and you (the buyer) have some general tax liens against you. I would just add if you are in a position to pay cash why not pay off the liens and then buy.
Web Reference: http://www.elysemetune.com
0 votes Thank Flag Link Fri Dec 18, 2009
Ok Cds. I am not sure I understand your question correctly. It sounds like you are asking if you can buy a house if you (the buyers) have tax liens on another house. Is that correct? Normally, it's the seller that has the tax liens on the house, but you asked about the buyer having tax liens. If you have tax liens on another house that you own, it may cause a problem because the title companies will run a check for outstanding liens (such as judgment liens, child support arrearages and such). I have to admit that tax liens on another property is a case of first impression for me. You should contact a title company and ask to speak to customer service. They'll be able to give you an answer. Please come back and tell us what you find out.

If you meant to ask about the seller's tax liens on the house that you want to buy, refer to the answers below. I was just going by what your question was.

Best of luck.

Ute Ferdig
DRE # 01326917
Ferdig Real Estate Solutions
(916)751-1267
Web Reference: http://www.themlshub.com
0 votes Thank Flag Link Fri Dec 18, 2009
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
The correct answer as the others have stated is: Yes, if you are buying in cash. Here is some information you will hopefully find helpful:

The only time a person would buy a house with liens on them is if they are getting a great deal on it, but don't currently have the money to pay off the liens. Either they expect to have money at a later point in time, or will refinance the home after six months at which time the bank will force the liens to be paid off at closing.

While it is true that you can't get title insurance if there outstanding liens, you can and should get a title company to issue insurance with exeptions to the known liens. This way if an unknown lien appears after you purchase the property, you will be insured against it.

If you don't get this limited insurance then at some point in time you may find a foreclosure notice on your door because of a lien you never knew about.

Also, be aware that tax liens generally collect interest-sometimes at a very high rate. If they don't get paid the interest can accrue very very quickly.

Hope this was helpful.

Good luck.
0 votes Thank Flag Link Fri Dec 18, 2009
What Elizabeth said is exactly right. It's important to remember that we have title insurance to make sure that there are no liens on property. Remember, "specific" liens stay with the property and "general" liens go with the person they are against. This is really important because even if you were paying cash, why would you want someone else to have a vested interest in your property? You wouldn't!! My advice, without knowing more about the situation, is to find a house that is lien-free and that can qualify for title insurance. There are plenty of great buys and lots of inventory.

Good luck!
Tamara Dorris
Real Estate Agent and Professor
0 votes Thank Flag Link Fri Dec 18, 2009
You can but you better find out how much they are first and order payoffs on the tax liens so you know know how much your getting into the home for, Once you find out how much all the liens are that you can find you can ask the title company if they will sell you insurance above and beyond those liens.
0 votes Thank Flag Link Fri Dec 18, 2009
Not in the buyer's name if the buyer is obtaining financing. If you're paying cash, it won't matter unless you're planning on title insurance. In that event, the title company may refuse to insure you or may except the tax liens from coverage.

But if you're paying cash and not obtaining title insurance, sure, you can buy a house.
0 votes Thank Flag Link Fri Dec 18, 2009
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