How long does it take to clear tax liens?

Asked by Taken, 93010 Fri Jun 25, 2010

In escrow on a bank approved short sale. Ecrow discovered $40K in liens on home? How long does it take to clear state tax liens? If the seller pleads "broke", will the bank cover the liens since they approved the short sale?

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Loan Do’s answer
Loan Do, Agent, Oceanside, CA
Fri Jun 25, 2010
That's up to the bank to decide whether they want to pay it out or not. In many cases, they don't and let it go into foreclosure. Just looking at the $40k, it is rather a large amount. How large the bank sees that amount is, otherwise, relatively depends on how much the offer offsets the current loan. To clear the lien it takes only days after paying it off.
1 vote
Tracey Hamps…, Agent, Valencia, CA
Sat Sep 7, 2013
Once someone agrees to pay the tax liens it is fairly quick to have them removed from title. The bank will ask the seller first, and then the buyer. If both parties say no, the bank may hold out for a buyer who will at least contribute. The bank is trying to get every penny it can because it's lost so much already.

I have always had the bank pay but you never know with each new transaction.
0 votes
Tom Thompson, Agent, New York, NY
Wed Sep 5, 2012
Tax Liens can be cleared immediately upon being paid off and in most cases they do. If you didn't negotiate for the bank to cover those liens before you signed your P&S, then you're essentially on the hook for that $40K. IF you purchase a home that has back tax liens still on it such as at an auction tax liens will generally fall off after 90 days.
0 votes
Loretta Leib…, Agent, West Lawn, PA
Wed Sep 5, 2012
It is best to have the title company find out the exact date that the lien would be removed.
0 votes
Cyndi Lesins…, Agent, Valencia, CA
Wed Sep 5, 2012
In my experience additional liens on a short sale have been paid primarily by the buyer of the home. I did have one case where the seller did contribute some funds.
0 votes
Laura Coffey, Agent, Santa Clarita, CA
Tue Sep 14, 2010
The bank can agree to pay off the tax liens and in most cases they do. You usually only run into problems with back HOAs not being paid. If you are waiting for short sale approval the only way to get clear title is to pay the liens wether it is you, the seller, or the bank holding the other liens.
If you purchase a home that has back tax liens still on it such as at an auction tax liens will generally fall off after 90 days.
0 votes
Tony Lewis, Agent, Valencia, CA
Fri Jun 25, 2010
Tax Liens can be cleared immediately upon being paid off. These records are updated right away and you will have proof of payment as well!
Web Reference:  http://www.TonyLewis.com
0 votes
Dp2, , Virginia
Fri Jun 25, 2010
All one has to do to clear a lien is to pay it off, so it doesn't take much time at all to clear a tax lien.

If you didn't negotiate for the bank to cover those liens before you signed your P&S, then you're essentially on the hook for that $40K. Another option is to negotiate with the seller and government to get the liens removed from the property, and transferred to the seller (as unsecured notes).
0 votes
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