I need help understanding a wholesale deal with a lien. Comps say the house is worth $280k. They mortgage balance is $116k and the lien is $70k. The seller is willing to take $200k, Great.
At this point how does the process of paying the lien work? When the end buyer pays at closing, does the title
Company distribute the fund to the lien holder, the mortgage holder and the seller? Or is there an extra step I need to do to pay for the lien?
Also, do I have to say something about the lien in any of the sale and purchase or assignment contract?
Thank you in advance for any help
The seller should be delivering the property to your buyer with clear title. That said, all debts, including a lien would be paid for out of the sellers assets at closing, unless there is something different written into the contract. The escrow person will do that in many states, or in some title or an attorney will do it. But whoever is doing the closing will make sure that the lien and mortgage are paid off...and always buy title insurance to ensure everything is paid off!