In short sale, does the buyer assume all the liens and/or back-taxes from the seller or buys a clear title?

Answer 1

Short sale in Real Estate means that a compromise has been made between the existing mortgage company and the seller. The mortgage company allows the seller to sell the property with a clear title even though the sale does not produce enough money to pay off the mortgage.

If you getting a title insurance policy and are getting a new mortgage then they will not allow any tax or mortgage lien to survive closing. You will be protected.

If you are paying cash or assuming a loan or doing one of those "rent to own" things, then you may have problems.

Answer 2

A 'short-sale', still is an assumption of full liability of what is due on the purchased parcel or real-property. Clear title is only given if nothing is reporting once the title work is accomplished (ordered). It does not mean that there isn't a lien or tax issue in the process of being recorded and has not been before the new title is written. In some states/cities, the recording process takes a long time, and in those instances, you could possibly end up with a cloud on the title afterwords. If that occurs, your title insurance should take care of those issues if you make a claim on them.

Answer 3

you appear to have mixed up your terms.

"short sale" refers to selling stocks or other financial instruments that you borrow for the purpose, betting that their value will go down and you can then buy them back cheaper.

afaik, liens and back taxes refer only to properties. Since properties are unique parcels, they can not be sold short in the same fashion as financial instruments.


can you clarify your question?