Seller now wants lien to pay closing?

[empiror22]

this type of lien/ closing situation is common in cities/areas that are in growing or repopulation growth areas ( common here just means it happens and not a one time thing).  My father is President of a NON-Profit that rehabs houses and then sales them....  He has done this a few times (or something similar) to conform to funding or local laws or special program requirements.  He has done this about 4 out of 100 (or 150 homes, number could be a little more, i only know about the last 15 years or so).  Basically the rules state something like you must live there for 2-10 years (depends on the program/law etc) after which the lien is released.  This also happens with some special programs that help with down payments.. I think San Fran had a lien system like this for teachers ( i could be wrong, but wife is a School worker and was looking at moving to the bay area and they said something about down payment help)

[Lemmus]

...it is important to know whether the op signed a separate buyer realtor contract with the seller's agent ...if the op does not have a buyers contract with the agent, then afaik the realtor is legally obligated to represent the seller's best interests and not the ops ...it may or may not be important in the present situation but every buyer should be aware of exactly who the realtor represents ...it sounds like there is a bond program involved and mass confusion has ensued as a result ...the op needs to set down with the realtor and the lender immediately and separate rumor from fact ...then and only then should the op be making any decisions regarding the transaction ...hth 

[Anonymous]

Tha's exactly why I included tha bit of information, haha.  It's a false security for them.  I guess their thinking is that the whoever bought the house wouldn't be willing to pay off the lien to sell for profit, or wouldn't be able to.  Why they would think selling a house to someone who couldn't afford to save $4500 over a period of a few years would be a good idea (smells like foreclosure to me if someone can't budget that amount of money) is also... strange.  

My lender has said if we have to include the lien we have to go through basically the entire process again, which is lengthy enough that my interest rate lock will expire.  This is a USDA loan and has already taken a ridiculous amount of time anyway.  I asked the current owners if they would be willing to do anything else for their sense of security and they suggested putting the lien on after everything has been signed and gone through.  I still have to make sure that by doing that I don't put myself at risk, but at the moment, it is the most popular deal on the table.

[Anonymous]

That is exactly what we are dealing with, empiror22.  We would have no issues if we had been informed about it beforehand.

And yes, we signed a separate agreement with the realtor apart from the sellers. 

[frugalQ]

Color me slow...are you saying that the seller wants to give you 4,500 in closing costs, but if you re-sell the home before an agreed upon time, you are required to pay it back?

[Anonymous]

NACA places a $25K lien on mortgages they close to enforce their owner occupied rule. 

[Anonymous]

Yes, because we are getting the property for much less than its value because of income qualifications.  So, to insure their interests in the property are protected, they put a lien on it.   Which is totally cool with us!  We just had no idea and... our lender was also clueless.

[compassion101]

---

@Anonymous wrote:

Yes, because we are getting the property for much less than its value because of income qualifications.  So, to insure their interests in the property are protected, they put a lien on it.   Which is totally cool with us!  We just had no idea and... our lender was also clueless.

---

So this is some sort of a home buying program? Is the seller a government agency or associated with the program? If the seller is an individual, I am not seeing how they are deciding to sell it to you for under market value due to an income qualification and put a lien on the property. Kinda confused and thinking wondering if there is a government agency involved here in subsidising the property

[empiror22]

As a former Real-estate agent, whom has worked with a few of these programs (sold 2 houses for father).   It sounds like your lender and agent were clueless, if your agent had worked with these people or in this area before he should have told you and informed your lender of this type of lien.  Many programs that have this type of requirement are "usually" disclosed during the first meeting with the seller (ie agreement to list home). 

Sorry that you are having this problem.  If the value is really almost double that of selling price, than it may be a good deal and worth continuing to purchase and go thru the hoops again.  You will have to do this again with another house anyway.

Good luck,

                 Emp

[frugalQ]

CompAssion, that's my question also. I thought the seller was an individual...and requiring a lien makes no sense to me.

If it's a govt program, it makes more sense.