First up, Rob's right. Don't panic!

If you have used a local 98117 (Seattle) agent and NWMLS paperwork, then the standard is that all the liens will be cleared before you buy the home. Talk to your agent if you have one. If you're dealing with the listing agent alone, then see a lawyer.

However, if there are builder addenda (pages) in the contract, then you'll need to check with a lawyer regardless to make sure that the above remains true.

Seeing a lawyer even if the above is not true may well be a worthwhile $100 spent.

Also, make sure that title will cover unrecorded mechanics liens as at the date of close. Title insurance is just that - insurance - and you need to find out if a plumber or such comes along later and says they weren't paid, that the insurance will cover the issue.

Finally, notify the closing agent (escrow) if you have concerns. They will be able to answer the specific question as to whether the property will close with liens itnact. It's escrow's job to make sure the letter of the contract is followed and they (theoretically) work as an independent body for all parties equally.

A Few, (love the name by the way)

First things first. DO NOT PANIC!

Second, have your agent contact escrow.

Third, continue not panicing.

Fourth, if you are still concerned, talk to the escrow rep yourself until you get the answers you want. You don't know enough yet to make an informed decision, so ask the questions of the title and escrow company until you get the facts. Then make an informed decision.

Rob

I understand your panic! Apparently, you've received your title report, and have not had enough explanation of it from the Title Dept. That report gives you the status of the title, PRIOR to close of escrow. When it closes, the seller's equity would normally be paying off any liens and taxes that you are not supposed to be assuming or paying. The Title Dept., and the Escrow Officer, and your HUD statement should be able to relieve your mind. They have to give you a "good title" at closing, and they are liable and insured, as well. If they and your Realtor and Manager don't relieve your fears, by all means take the contract & title report, etc. to a RE Attorney.

Enjoy your new home,
Jean Bradford
Associate Broker, ABR,GRI,CRS,CRB
John L. Scott RE
Silverdale, WA

I just had a question like this come up in my own business...a title officer pointed me to the possibility of bonding the liens, so the title can be cleared. There are bonding companies that do this. I do not know if they will handle tax liens, though. They are different and may need to be paid before closing.

Good luck!

-Diane

I would definitly walk away from this purchase now! This is a big headache waiting to happen!

It doesn't sound like title is marketable, therefore, the seller hasn't fullfilled his obligation to you the buyer, but if there is language in the P/S Agreement that says seller has until closing to clear title, you might have to wait until that day. You need to talk with a real estate attorney immediately! It will be money well spent!

I have unfortunately been involved in a similar case (I'm one of the lienholders) and the home was sold without my lien being cleared. As you could imagine it's quite a mess for the new owner, but it just goes to show that it can happen...even with all the safeguards and a title policy that wasn't scrutinized very well by escrow or the title company.

Make the call...get a real estate attorney on this quick.

Best of luck.

James

Dear Afewquestions,

Hopefully, you are working with an agent and have your sale in escrow and are getting title insurance. The Northwest Multiple contract states that title must be "marketable" at closing. That means all liens that have been recorded are cleared at closing.

Title insurance covers you for unrecorded liens, which are often "mechanic's liens". Those are liens that can be filed within a certain time frame for work done on the property. I think the time fram is 8 weeks, but I recommend you double check that. If you bought this house before it was completed, you would be wise to ask the builder for "lien release" confirmation forms from the subcontractors. Some subcontractors file liens automatically when they do Work, just to insure they get paid.

Talk with the builder about lien releases. Also talk with the title company about status of liens showing on title. All title companies have title officers who make decisions about the insurability of a property.

If the builder has been struggling, he / she may have negotiated with sub-contractors regarding payment that is less than the full amount owed and it is possible those payments will be made at closing. We see this in markets where prices have been falling.

Good luck,
Warm Regards,
Karen

is there an escrow company handling the closing?

I don't think they can close the deal with liens on the title. .. Talk to the escrow closing agent and see where they are in the process of getting those liens satisfied. If you used standard NWMLS forms for this purchase, .. page 2 on Form 21 paragraph D .. Condition of Title would cover your situation.

If you do not have an escrow company handling this or did not use the standard NWMLS forms ... yah ..take Bill's advice and talk to a lawyer.

The final HUD will have all the answers. I'm not advising you but if I were sitting at a closing table and I noticed things on the HUD that weren't the way they should be according to the mutually accepted agreement, I would not sign off on the transaction. Ask your agent to get you the most recent HUD from escrow and see if the liens are on there. Ask them also to check with the title company to see if the liens have been cleared. If the funds from closing are to be used to satisfy these liens, it should appear on the HUD.

Afew.

This is one of those times when your best inrterests may be served by consulting with an attorney. They will be able to best advise you.

Good luck