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Preliminary Title Report and Short Sales

ALWAYS Get a Preliminary Title Report

 Beware! Property tax liens – and other liens, I’ll get to that in a minute – can put the kybosh on your short sale.

Bottom line is this: a property can’t be sold, because the title can’t be transferred, IF there are any outstanding liens on a property.  And, there are a number of liens that can show up on a title report and cause your short sale to go ‘belly up’.

When putting together a short sale (or any real estate sale for that matter), be sure to request the title report right at the beginning of the process. Look for ANY liens against the property, including property tax liens, home owners’ association liens, abstract judgments and delinquent loans and IRS tax liens.

Any of these can cause your short sale to go south. Don’t take the word of the homeowner and assume that asking them whether there are any liens against their property is adequate. There could be liens against the property they are unaware of; it could be a big surprise for them and for you. Always better to know exactly what you’re dealing with upfront and not expend the effort to put together a deal that has little chance of happening.
Here’s what you need to know about some specific liens:

  • Some lenders will pay for home owner association liens, Bank of America, for example, typically will NOT pay for these. We recommend the seller to keep these current throughout the short sale process if possible.
  •  Most short sale lenders will not allocate funds for abstract judgments, so these need to be settled before closing. Depending on the lien and on the dollar amount, these can sometimes be settled for less than the actual amount. These negotiations can be time consuming so it’s important to get the negotiations under works as soon as possible.
  •  The majority of short sale lenders will pay for delinquent property tax liens, so those are not typically a barrier to get a short sale completed.
  •  Most lenders will not pay IRS tax liens. However, these can be removed following an IRS process and you can learn more about this through IRS Publication 783 or by going to: http://www.irsvideos.gov/Individual/IRSLiens

We’ve heard about too many instances where a preliminary title report wasn’t requested and everyone was very sorry later. Most liens can be handled and cleared and the short sale can move forward – but the operative concept is to be aware they exist so that they can be handled.
Don’t be intimated or concerned if you pull a preliminary title report and there are many outstanding liens. The majority of them can be released or negotiated off. It just takes persistence and experience in working with these additional liens to clear the title. Just DON’T wait until the last moment, this could potentially derail your short sale.
AND, if you’re working with Short Sale Experts, you don’t have to worry about the details, because we handle them for you. Since it’s all we do – all day, every day – you benefit from our expertise, not just in the details, but in the relationships we’ve built and our knowledge of the process. We navigate the waters so you don’t have to. Short Sale Experts give Short Sale Assistance a whole new meaning. Call us to see how easy it can be to complete a short sale when you work with us. We’re here to make your life easier and your transactions simpler. 888-SHORT-20   Info@shortsaleexpertsinc.com

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San Diego, CA 92101

Phone: 1-888-746-7820
info@ShortSaleExpert.com