Possible to “subject to” with lien on property?

Question

I found an off market property in which the owner had stopped paying her mortgage and foreclosure was imminent. I put in an offer to purchase the property for how much she owed on the mortgage. The day before closing my realtor contacted me and said that the lawyer had discovered a lien put on the property. Long story short, the seller could not close and the deal fell through at that point. This would have been my first investment property and would have been a good deal. Right now, I’m still trying to figure out if there is a way to make that happen.

My question is whether or not a “subject to” purchase would be possible in this situation? Does a lien prevent this type of deal from happening? If anyone has experience or insight into this I would appreciate your thoughts.

Thanks!

My question is whether or not a “subject to” purchase would be possible in this situation?  Does a lien prevent this type of deal from happening? If anyone has experience or insight into this I would appreciate your thoughts.

Thanks!

Account Closed · Answer

If you take the property Subject To you inherit the lien as well. If it is a small lien it may still be worth doing. There are options of the seller paying off the lien, negotiating the lien payoff and other techniques depending on the source of the lien, how old it is and the amount.

Adam Z. · Answer

@Mike M. Thank you for your input!  The lien is about 3 months old and approximately $8000 which is more than 10% of my offer price. Apparently the owner owed money to a contractor for a bathroom remodel. He got notified she was going to sell and went to the courthouse to put the lien on.