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Finance > Real Estate > Promises, Promises. Promises Made…Promises Broken?
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Article rating : 0.00, 0 votes. Author : Bryan Benson
There are many things you may promise a seller. Of course you want everything to work out perfectly when it comes to a sale you are involved with. I’d like to give you an example you should be wary of and give you a possible solution.
Say you have a short-sale happening and you should find out shortly if the seller is going to agree to your price. Now you know the seller has had a multitude of problems. He is considering giving you a big drop and handing the deed over. He’s even given you the figure of what his mortgage currently is, and what the IRS has on it for lien.
The first promise-this is a mess!!
Number one-Do not promise him that you're going to pay off his IRS Lien. And seeing as how he is willing to give you the deed; that seems like the next logical step. If he does hand it off-you will have to pay it off!
Number Two-You will have to verify the ARV.
Number Three-The IRS may not release that lien if they have a lot of equity in that property. But in reality-you don't have a shot at it until you can show them a copy of a recorded deed. In fact, you can tell the seller that. You can tell the seller the only way you can make this thing work is if you get this lien released off this property and you can't even do that without a copy of the recorded deed. And if it doesn't work out, you can give it back to him.
In fact, you can also promise the seller some money, but only when you get paid!
Think about it. If you promise too much you can get yourself into trouble! You really should only promise him that you will pay off the IRS Lien upon re-sale of the property.
You should then forget about trying to get it released and that's what the seller gets out of it. But keep in mind... if you are still going to buy this house... under no circumstances do you go do a "tabletop closing". Never!!
You should always get a Purchase and Sale Agreement that you will purchase the property for the underlying mortgage plus the second.
Why should you do this? I’ll tell you, with the Purchase and Sale Agreement that you will buy it for what's owed on the first, plus the IRS Lien, and then you go have an attorney do the closing and make it crystal clear... in writing for him to sign... that you're not going to pay off the IRS Lien until the property is sold. And that’s a promise you can take to the bank!
About the Author:
When it comes to real estate investing, I highly recommend information from Ron LeGrand . For valuable information regarding investing in homes visit http://www.RonLeGrand.com. You can also find useful investor resources in the free newsletter at http://www.MillionaireMakerNewsletter.com.
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