$40,000 down payment has been made. How do I insure that this isn't lost and how long does the seller have to clear up the liens and close escrow? The house is in Washington STATE. Thanks.
2007-10-17 19:11:39 · 6 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
The $40K downpayment was paid directly to the seller who gave us a receipt. I know, in the future, pay directly to the escrow co. But any advice on what we can do now will be appreciated.
2007-10-18 13:30:58 · update #1
i think you need to talk with a realtor. they specialize in that stuff. doing a title search would find all the liens on that place if they were recorded anywhere. i think they even offer a type of title insurance too. i would NEVER buy without a realtor to back me up, or advise me.
2007-10-17 19:16:18 · answer #1 · answered by Anonymous · 1⤊ 1⤋
Before you take title to the property the Title company you have selected will make sure the title is clear of all liens and any other things on the title that should not be there.
This is the duty of the title company, escrow and the current owners of the property.
What ever money they are getting will go toward paying off all liens. After all the liens are satisfied the remaining money is theirs.
An example of this would be, if they had a first mortgage of 250,000, a second mortgage of $50,000, a tax lien of $1,500 and a mechanical lien of $25,000. The liens equal a total of $326,500.
The sales price of the house is $425,000. In this case the seller would pocket $96,500 for the sale of his house to you. Now of course there are escrow and title fees that will be deducted also, but this will give you a rough idea of what will happen with the title company and escrow.
The title company will receive all the funds from the lender, they will then deduct all that is necessary to pay off all liens. Once this has been done they will transfer the remaining money to escrow to distribute the appropriate individuals.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-10-17 20:38:16 · answer #2 · answered by loanmasterone 7 · 1⤊ 0⤋
It is not clear from this question whether you have already purchased the house or you are going through the process. Can you clarify this please so that we can provide accurate information.
First, a realtor is not going to help you. Most realtors know little about liens and rely on the title company. In this case you will need the title company and a lawyer to ensure that your interests are protected.
The above poster is correct in stating that the liens will be satisfied from the proceeds of the sale. If the sale is not enough to satisfy the liens, then the seller will have to come up with money out of pocket to pay them. If you have a valid contract, the seller probably cannot back out because of liens. I have never seen such a contingency in a contract for sale.
If you want the property, get a lawyer to take a look at all of the paperwork. It is just an extra layer of protection for you and it will ensure that your closing goes as planned. Make sure that you get an owner's policy of title insurance (NOT just a lender's policy which is required by the lender).
2007-10-18 00:12:24 · answer #3 · answered by Anonymous · 1⤊ 0⤋
Always ask a Realtor, buyers in WA state have the upper hand in a RE transaction. To insure that your money is not lost you must have a solid purchase/sale contract that protects you and leaves you many different routes to walk away from the deal if needed. I am assuming escrow is holding the funds and it is a mortgage down payment and not earnest money(this is important). If you are financing thru a traditional lender you will be required to have title insurance and the bank/lender will do a title search to find recorded liens . In your purchase/sale contract you should have a clause that says you will only close on the deal if the property is free of liens. Usually if there are recorded liens on a property they will be paid from the sellers proceeds at closing. It depends on the contract you have with the seller in regards to liens. I am a Realtor in WA state questions are welcome.
2007-10-17 20:45:08 · answer #4 · answered by sorinrealty 2 · 0⤊ 1⤋
The liens must be satisfied or the property can not be transferred. As long as your down payment is being held by the realtor until closing, you should be fine. And when you get title insurance, make sure that a policy is issued for you as well as for the bank. If something doesn't get cleared up, that's your protection.
Chicago Title Insurance is one of the largest in the nation and has good basic information on their website -- see below. (No, I do not work for them. But I've been through two purchases, a sale, a failed contract, and had a really good realtor through it all who was the one who told me why I needed to make sure that the title policy would take care of me and not just the bank.)
Good luck.
2007-10-17 19:21:01 · answer #5 · answered by mariamnorthmore 2 · 1⤊ 0⤋
In Illinois, the title company indemnifies you against this. That means that they do a search and make sure there are no liens. If liens come up later, you have title insurance, so if it's the same in your beautiful state, it's not a concern. If you gave them 40,000 in escrow they will have to refund it if they can't get those liens cleared up. It's their problem, not yours (except that you might have to find a different house).
2007-10-17 21:05:24 · answer #6 · answered by Anonymous · 0⤊ 0⤋