Tax Lien before closing…

In February, I accepted an offer on a short sale house (another blog entry) that I have been attempting to sell for nearly nine months!  The home is a great buy, but has issues with power lines and could use a touch of paint.

The home went through the normal process of inspections and appraisals.  During this time, the buyer did their job with financing, and everything went well with the short sale from the lender.  Everything looked really good, until…

The home was scheduled to close April 1st, but on March 25th, I received an email from the title company that stated they needed my assistance with an issue that just came up.  The problem was the seller’s husband, who had passed and had some IRS issue’s.  The seller stated that she had paid them all, but one was getting flagged by the IRS.  Why, did this come up just now?  We opened this escrow nearly 45 days earlier, and now the title company is coming at me with this… less than a week from closing???

So, who’s to blame on this one?  The seller? The Title Company?  When I went to inform the buyers about the issue, they were furious and decided to back out of the sale.  So, I was left with a property that only received one offer in nine months.  Needless to say the IRS did have an error with their systems, but will still not send a waiver for the lien.  What can I do?  If you have ever had this issue, please let me know, and when I, or if I get this resolved I will post my conclusion.

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