Florida Short Sales Require A Title Search
A title search is required for a short sale to check for outstanding liens that would prevent the buyer from receiving clear title at closing. Distressed homeowners sometimes know there is a lien against the property and sometimes they are unaware.
A lien is a legal claim placed on property claiming the owner of the property has an outstanding debt to be settled before the property is sold and the title transferred. In order for the buyer to receive clear title, you must address all legal claims against the property before closing.
What Liens Are On My Property?
There are various types of potential liens possible and sometimes sellers may not be aware the lien exists. Alma Korshak, owner of Short Sale Facilitators in Casselberry Florida, explains how the title search works during the short sale process.
“Normally what would happen is once the property goes into contract we will order what’s called a title search. The title search costs us $75 – not us, but the title company. It’s a fee of $75. A lot of times the lenders will not pay that $75 so that fee is passed on to the buyer if it goes into contract.”
The title search shows what liens are outstanding and how they must be resolved before the sale. This title search is no different from a standard title search in any real estate sale.
“When we do a title search it’s a 30 year search and when that comes back it shows us what type of liens are on the property and what needs to be done and cleared so that when we do get approval from the short sale lender and the title company gets ready to go to closing, those liens and requirements are already taken care of,” Alma said.
The Title Search Tells All
If you have liens against the property, whether you know about them or not, Alma tells sellers those liens will show up on the title search.
“Normally when you conduct a title search it’s a 30 year full blown title search and in there it will list – in schedule I believe it’s B – the title company will have a list of requirements. And in that list of requirements it will show every lien that is on the property and what needs to be done in order to clear title and give the buyer clear title to the property.”
“If for some reason the seller doesn’t know what type of liens they have on the property once we do that title search, yes, we will be able to you know share with the seller what liens popped up when the title search was done.”
“So the list of requirements on that list once we do the title search it’s going to show what type of liens are on the property and what the title company is going to have to do in order to insure that the buyer is getting clear title to the property.”
Tax Liens Show Up in a Title Search
Unpaid property taxes, code violation liens, and unpaid IRS taxes will show up on the title search. Sellers are not sure how to handle those liens when they are experiencing such financial difficulties. Alma has processed short sales for over seven years, so she can offer some guidance to short sale sellers.
“A lot of the federal tax liens that we see have to do with personal and also business. So but yes, they will usually send us a copy of the liens and the years of taxes that haven’t been paid.”
“So what that means is that we would have to – if it’s a short sale – doesn’t mean that you can’t short sale the property still, but there are some special forms that we would give you here at Short Sale Facilitators that the seller would have to fill out and then we would submit those to the IRS and see if the IRS would be willing to release that lien from the property so that the seller could move forward with the short sale.”
“It doesn’t mean that they’re forgiving any amounts by all means. All that means is that the IRS will work with us and try to release that lien so that you could move forward to with the short sale.”
Short Sale Facilitators negotiates every aspect of the short sale with the short sale lender. If you have questions about a short sale, schedule a time to meet with Alma Korshak in her office in Casselberry Florida.
Short Sale Facilitators. The Power of Negotiating.