Federal Tax Lien
hello,
I came across an opportunity to purchase a property in foreclosure, where the deal breaker is with this federal income tax lien of roughly $90K.
FMV = $425K - 440K
1st mortgage & arrears = $260K
fed tax lien = $90K
Since I do not have IRS negotiations experience, I figure I ask this question in this forum. I have heard 2nd hand that even if the property is sold at the auction, the federal tax lien is still attached to the property! Is this the case? If so, what kind of success rate will I have against the IRS?
Thank you.
IRS liens have priority over all other liens. So if the bank takes back the property. They have to pay that lien off first.
If the property sells at auction, the IRS receives their funds first then all other lien holders are paid accordingly.
He should contact a local real estate broker... determine what the house is worth, and speak with his soon to be ex about how they will divide the equity. A retail sale may be the answer.
Agreed---even a half ass realtor can get an extension on a preforeclosure to market and selll the property
If legal action has not yet been initiated, your friend needs to contact his mortgage company and beg for forebearance.... ask that the foreclosure be delayed while the house can be sold. Listing with the best Selling Realtor in town will help him move the property.
If his house has equity, a FSBO will move it fast to an investor even if fix-up and clean-up is required to make it ready to retail.
If you want to help your friend, organize a clean-up crew and put the best face on the house. Shampoo carpets, paint, clean, cut yard, etc.... so however he sells, he will get top dollar for the situation.
Also, help him make decisions. When I went thru my divorce many years ago, I was too caught up with my own emotions to make rational decisions. Help him decide what to do and help him do it. Ann Landers is now signing off.
[addsig]
Thank you all for great advise I will put some your responces to use. thanks
Well I spoke with my friend and it looks like his bank is going to help him .He will need to make a couple of catch up payments, but after that the bank has there own realtors or work with realtors, they will help him sell his home.
absolutly correct. 7 years. 10 would be BK
panic,
to your earlier reply. The guy is not looking for a deal. He is trying to help his friend sell his place before foreclosure. You need to read post instead of the headlines.
OOOOH!
If you buy the property, try to do a short sale if possible. That way you can sell the property back for the same amount that was owed. If you sale back for more than the original balance, then you will be seen a usury lender. Very dangerous.
Use an attorney like panic advised.