We received an email from the President of our preferred Title and Escrow Company in regards to a recent incident relating to an IRS lien recorded against the previous owner of a foreclosed property. It reads:
"Dear Investors:
An interesting issue occurred today pertaining to an IRS Lien that I wanted to share with you. As you know, when an IRS Lien is recorded against the owner you have to hold the property for 120 days before we can insure a subsequent transaction. Alternatively, we can request a Waiver of Right of Redemption from the IRS. In this situation, the investor requested that we pursue the Waiver and then proceeded to market the property anticipating the Waiver would be forthcoming. The property was sold and escrow was opened. Here is the problem... Based on our request for a Waiver, the IRS researched the property, checked the listing amount and has requested a copy of the contract. Because this particular property has a pretty good margin, the IRS either wants a cut of the profit or they will redeem the property; they want an offer for the Waiver! You may want to consider that if the property has a particularly high margin that is alluring to you, it may also be alluring to the IRS, especially when they can review the listing online that illustrates they can easily recover a good portion of their lien, if not all... In some situations, it may be better to wait the 120 days, keep the property off the MLS and not incite the IRS.
An interesting issue occurred today pertaining to an IRS Lien that I wanted to share with you. As you know, when an IRS Lien is recorded against the owner you have to hold the property for 120 days before we can insure a subsequent transaction. Alternatively, we can request a Waiver of Right of Redemption from the IRS. In this situation, the investor requested that we pursue the Waiver and then proceeded to market the property anticipating the Waiver would be forthcoming. The property was sold and escrow was opened. Here is the problem... Based on our request for a Waiver, the IRS researched the property, checked the listing amount and has requested a copy of the contract. Because this particular property has a pretty good margin, the IRS either wants a cut of the profit or they will redeem the property; they want an offer for the Waiver! You may want to consider that if the property has a particularly high margin that is alluring to you, it may also be alluring to the IRS, especially when they can review the listing online that illustrates they can easily recover a good portion of their lien, if not all... In some situations, it may be better to wait the 120 days, keep the property off the MLS and not incite the IRS.
Good information for all of the trustee sale buyers / investors / flippers!!! Let's get the waiver before you put any rehab monies into the property and especially before we list it for resale!!
