Jim Curry - Seller Book

taxpayer can request that the IRS discharge the lien to allow the sale to take place. Taxpayers or lenders can ask that a federal tax lien be made secondary to a lending institution’s lien to allow for the re fin ancing or restructuring of a mortgage. Th e IRS currently is working to speed requests for discharge or mortgage restructuring to assist taxpayers. LIEN PRIORITY A federal tax lien resulting from unpaid federal income tax trumps all other liens in terms of priority, unless subordinated as discussed above. Mortgages are the most common type of lien; however, there are others, such as tax liens for property taxes and mechanics liens for outstanding construction contracts. Other than tax liens, liens have priority in the order o f fi ling. For example, if you have a mortgage with Bank A from 2013 and a second mortgage with Bank B from 2015, Bank A has priority (fir st rights) to the property. If you satisfy Bank A’s mortgage, Bank B becomes top priority. Any future fi lings will become secondary to Bank B . Th e exception is a tax lien, which always takes priority. You can’t sell your property to buy another while valid liens are in place. Before a home is transferred from seller to buyer, it must be free of all liens, such that the buyer receives a clear title to the home. If you owe lienholders and have less equity in the house than it sells for, you might have to bring a check to the table. Once a lien is ver ifi ed, you need to satisfy it to sell your property. Contact the lienholder for a payo ff fig ure, which is the total amount owed, including interest and other charges. Paying the debt is the fir st half of the process of clearing a lien. Th e lienholder must then cancel the lien. Th is can take several months, depending on how quickly the lienholder acts and the volume of requests at the County Clerk’s O ffi ce. To avoid problems with the 112

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