How to pay off lien before going under contract?
Hey SF BP,
I've got a question I could definitely use some advice on. A wholesaler ran a SFH property here in Miami by me that looks like it could be a great fix and flip or BRRRR. The only issue is that it comes with an ancient lien from the city from 1992 that has been accumulating up to the tune of about 1M. To give you some perspective this property has an ARV of 180 - 200K and we've agreed on a wholesale price of 100K. Obviously with this kind of price there is no way any lien of this type could be paid off unless it were dismissed or negotiated down. From what the wholesaler tells me the seller is in very bad financial shape and there is no way they could pay off the lien before hand so it would be my responsibility to take care of it.
Now I'm all for doing the legwork to take care of a lien if it means getting a great property for a great price I just want to be certain that I CAN actually negotiate it down to something reasonable or get it dismissed BEFORE going under contract to buy the house. The problem is that I don't know how exactly to construct a deal where I pay to clear a lien on a property I don't currently own and my fear is that I could get caught helping the seller clear the lien and then they turn around and try to not sell me the property.
I had thought about adding an addendum to my standard purchase and sales agreement stating that if i cleared the lien the seller would be obligated to sell me the property for the agreed upon amount I just don't want to risk shelling out 5 - 15K clearing someone else's lien to only discover that I can't force them to continue with the original agreed upon contract.
Any suggestions or anyone with experience clearing city / other liens on properties would be greatly appreciated.
Jason