Lien (chattel) question - Posted by LP

Posted by Karl (Oh) on December 02, 2005 at 15:12:14:

Long Play,

As the saying goes, never assume. I’ve done this many times. You and the seller can call a lender together and tell them what you’re doing. Say that you’ll be sending the payoff directly to them, and that they are to send the released title directly to you. They will. Get the seller to sign a power of attorney now, so you can transfer the title into your name when it arrives.

Don’t forget to ask the lender for a discount on the payoff.

Karl Kleiner

Lien (chattel) question - Posted by LP

Posted by LP on December 02, 2005 at 12:02:03:

I am curious how others on this forum are handling purchases when the seller has a lien on their home.
DOW touches on this to the extent that it?s the sellers responsibility to present the buyer with a clean negotiable title at closing. True, but if the seller is relying on funds from the sale to clear the lien how does the purchaser protect themselves? Obviously it?s ?suicide? to give the seller the funds and pray that they pay off the lien and then present the purchaser with a clean title. Further, a Greentree or some other institution won?t (I assume) send a clear title to a third party if that party pays them directly. Has anyone enlisted the services of a title company to aid in this sort of transaction? What other ways are you protecting yourself?

I?ve just completed my second deal (bought & sold). Luckily, both sellers had free and clear titles; going forward, I?m sure I?ll be running into lien situations.

Thank you.

Re: Lien (chattel) question - Posted by James

Posted by James on December 04, 2005 at 03:21:33:

You are right never to trust the title will get cleared if you pay the seller and just use hope as your tool to complete the job.

The situations fall into 2 areas.

  1. Physically accessable lienholders.
  2. Not physically accessable lineholders.

Just Friday I had a conversation with an investor friend. He had bought a home with a substantial amount outstanding in arrears to the park. This falls into category 1 above. Having spoken to the PM about working the park, he could just go in with the seller and take care of that problem. about 60% of the purchase price went to the park. The PM also was aware of the taxes, and rechecked their status, and added other services. That went smoothly.

In the case of Greentree, as Karl stated, you need to have a conference call to be sure you have it all squared away. I would record the call, myself, and announce that to all. Get the POA Karl mentioned, and take any other steps you need to to be ready to proceed never seeing the seller again, once the money changes hands.

You’ll find that once its apparent you are not going to be foolish with the money, the seller will usually just want to cooperate enough to get done with the headaches, and move on. Just don’t present them with an opportunity to undo some payout, and recover the funds.