Tax lIens

I am the buyer on a short sale...6 months in we find out the seller has state and federal tax liens against the property. The house is in Orange County, CA. We are hoping to get the HUD-1 from the bank this week. Apparently the tax liens cannot be dealt with until we get this. Does anyone have any experience with this and can tell me how long it actually takes to have the state and the irs remove the tax liens. Is here any secret to expediting it? We were told by the sellers agent it would be 3-6 weeks. We thought we might be able to close in June and now this comes up ugh.....

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Permalink Reply by Edwin Acevedo on November 7, 2012 at 12:00pm

Hi Linda, is there a direct number for this special desk that is set up for short sales? Any info is appreciated it. We just need the appraisal which is happening tomorrow. Then off goes the package but it would be helpful if we can get the FTB out of the way. IRS will take weeks. I appreciate the help. Thank you. 

Permalink Reply by Pete Reese on June 17, 2012 at 6:42am

In my opinion, tax liens from the Franchise Tax Board and the IRS are fairly easy to get removed.  The only problem is that these entities will not start the process to remove these liens until you have the short sale approval letters.  In addition, the CA Franchise Tax Board requires a full appraisal....IRS just wants a BPO which you can do.  You can use the buyer's appraisal, but the FTB will not evaluate a package until it is complete.  This creates a bit of a time crunch sometimes especially if you are dealing with expiring ss approval letters and foreclosure sale dates.  Also, the FTB will require that the seller be in "compliance".  Meaning, they will have to call the FTB and go over their options.  Hope this helps...

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on November 11, 2012 at 6:39am

First, the agents are not doing their job.  They should have asked the Title company to keep the prelim updated every two weeks and you would have known about this earlier.  That said, the SELLER needs to walk into the Laguna Niguel IRS office with the HUD and the Purchase Agreement.  The IRS will make arrangements with the Seller as to the debt.  Regarding the CA-FTB lien, the SELLER will have to contact the FTB and work the same thing out with them.  Both of these should take about 6 weeks total IF the seller cooperates.

 

I just had one like this and the Seller would not take action to do anything about it because once they meet with the IRS or FTB, they have to agree to a repayment plan and most people in that situation don't have a way to pay it back.

 

My transaction fell apart and is being Foreclosed simply because of these liens.

 

I would suggest you start looking for another non-short-sale property ASAP.  If you were my client we would have known about these liens a while ago!

 

Best of luck!

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