Question: My Prescott, AZ home is set for auction and there are two liens. One, IRS and the other is an HOA lien. I was told most likely, it will not sell. Is this true?
Answer:
There are “junior” and “senior” IRS liens. If the IRS lean is a senior lien, it means they filed it against you before you obtained the loan on the house. This is typically unpaid taxes. This will stick with you no matter what. If the lien is junior, this means the lien was filed after you obtained the loan on the house, and the IRS will have 120 days to redeem the house from the new owner after it auctions. (Meaning they’ll buy it for whatever was paid plus repairs)
Liens against property exist only because you’re not paying someone. They cannot necessarily procure your home just because they file a lien. For instance, the HOA can not claim your house for $300 in non-paid HOA fees. However, if you sold the house and received any profit, the filed judgement will show up during a title search, and will need to be satisfied during escrow.
Whomever said, “it will likely not sell” is correct, and incorrect. “Likely” being the key word. Some people do not want to risk the IRS redeeming the property during the 120 days after the trustee sale. However, the budgeting for redeeming properties is so low, it is very unlikely that the IRS will attempt to redeem the property, unless a significant financial advantage for redemption exists. Meaning if someone were to not have an emotional attachment to the property, the investment is likely to be a good one; knowing that either way the financial investment will be recouped by flipping or redemption.
Posted in: Foreclosure, Prescott
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