I found a motivated seller. I'm going to look at his property today and I think there's a very high likely hood he's going to want to sell.
He told me the home has an 50k lien from a business deal gone wrong, in which he used his home as collateral. The home is worth about 300k.
Here's my question. Knowing the lien is in place, should I go ahead and get him under contract. Or should I wait and try and figure out the lien situation first?
I would try to figure out the lien first. Do you plan to wholesale this home or buy it yourself? Is he going to payoff the lien from the proceeds of the sale? Before putting it under contract I would at least want know who has the lien and what the seller is planning to do about it.
I don't understand the reason for not tying it up and putting it under contract. Give yourself a long option period for due deligence. Your contract should say something about getting a cleared title etc. If it has a lien on it, wouldn't they have to pay it off to get a cleared title? you can always add an escape clause to it that gives you even more latitude.
That was my initial thought. When I had a similar situation, the seller would not go for a long due diligence period, and he then refused to pay the water bill which was about 2K. It was a short sale and left up to me to clear or not to clear. I walked away for that reason among others.
Assuming you're talking about a straight sale, not sub2/seller finance, etc., it's irrelevant as others have said. The lien gets paid out of the seller's proceeds at closing. Is there a mortgage, other liens?
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