Expert: liznarr - 11/27/2006

Question
thank u so much!!!! Elizabeth I own this house outright with no mortgage on it...I'm broke with only $25.00 in bank
at closing seller hands me a check for a certified check for $80,000.00 and how do i pay the liens and the closing cost....sorry i'm totally lost....thanks mike @ freelaptopsandcomputers@yahoo.com
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The text above is a follow-up to ...

-----Question-----
I MAY HAVE A CHILD SUPPORT LIEN FOR $18,000.00 AND A CITY TAX LIEN ON MY HOME...SOMEONE OFFERED ME $80,000.00...HOW DO I MAKE THIS SALE HAPPEN? I DON'T HAVE THE MONEY TO PAY IT OFF BEFORE THE SALE....COULD I WORK OUT A DEAL WITH THE BUYER ?- 1-609-843-0144 PLEASE I NEED HELP I'M SUPPOSE TO CALL BACK AND LET THEM KNOW WETHER I'LL TAKE THE $80,000.00 TODAY
-----Answer-----
Hi Mike,

To make this sale happen, the child support lien and also the City tax lien can be paid off AT CLOSING, so long as you have enough equity in your home after paying off your mortgage and any other associated Seller costs of a sale to pay off these two liens.

Your Contract of Sale should have language written into it stating that the child support lien and City tax lien will be paid off at closing.

It is not uncommon at all for Sellers to have the liens paid off AT TIME OF CLOSING.  The closing attorney (or title company if that’s who closes loans in your state) will be able to take care of this for you.

You should probably verify the PAYOFF balances of both these liens just to make sure that over time, any interest and penalties that might have been added to the original lien amount will not exceed any equity in your home after paying off the mortgage.

Please write back as soon as you receive this so that I will know you have read this answer.

Good luck to you, and write again if you have additional questions.

Regards,
Elizabeth


Answer
Mike,

At closing, the closing attorney or closing title company will write AND MAIL checks to pay off the liens for you.  This money never comes into your hands, and this is the buyer’s protection when an attorney or title company is used to close the transaction.

Since you own your property outright and have no mortgage, say your costs to sell are $1,000 … deductions for pro-rata taxes, any City/State taxes due, for example.  This leaves you a balance now due of $79,000.

If your child support lien is $18,000, added to a City tax lien of $2,000 (I’m using a fabricated number here), that’s another $20,000 that will be deducted from the $79,000 above, now leaving you with a balance of $59,000 due.

The closing agent would then give you a certified check for $59,000 and mail certified funds to pay off the child support and City tax liens.

I’m also going to email this information to you at the address you provided, but don’t forget to rate my answers.

Good luck to you.

Elizabeth