Sign In | Create an Account | Welcome, . My Account | Logout | Subscribe | Submit News | Staff Contacts | Home RSS

Seller concerned about IRS Notice of Lien

January 31, 2020
By ERIC FEICHTHALER - Real Estate Law , Cape Coral Daily Breeze

Dear Mr. Feichthaler:

I am planning to sell my home, and wish to finance about half of the purchase price for the buyers. I plan on seeking an attorney locally to assist with the contract and loan documents, but my question is this: If I sell the home and finance it, then the IRS records a Notice of Lien against the buyer for an amount exceeding home value, could I be left with nothing?

- Anthony C.

Dear Anthony:

The Internal Revenue Service has powers to lien property in many ways, including all real estate in the county where the lien is recorded. Thankfully, an IRS lien will not take precedence over a purchase money mortgage, which is what you are thinking of offering your buyer. This is the case because your buyer only was able to purchase the property because of your loan, so the IRS lien will only impact the value of the home above your mortgage value. In fact, this is the case even where the IRS Notice of Lien already exists your mortgage will still be superior to the IRS lien. Keep in mind, it is essential that the requirements for a purchase money mortgage are carefully followed, or the priority of your mortgage may be in jeopardy. As always, just make sure you obtain a sufficient down payment so that, if the buyer ever defaults and a foreclosure is required, you will be likely to receive all the money you are entitle to under the note and mortgage.

Eric P. Feichthaler has lived in Cape Coral for over 30 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Historical Museum, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 18 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator.

Mr. Feichthaler can be reached at, or (239) 542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.



I am looking for:
News, Blogs & Events Web