That lien comes out of the seller’s proceeds, not yours. You don’t need to do anything, except close. The title company will pay off the lien (as instructed) and the original seller will get his money, less the amount of the lien, and less the fees required to process the pay off of that lien.
Don’t worry about it. The lien is not added to your price; it’s included in the seller’s price.
All that said, if your option price is the balance of the underlying loans, and represents a net proceed to the seller of $23,600, then the lien will be tacked on to the $23,600, and then you do have to adjust the end/user’s price to cover your assignment fee.
Is the price you’re paying a ‘net proceed to the seller,’ or just the sales price? It makes a difference.
Hope that helps. Otherwise I don’t understand what’s happening.
My price to the seller was 23,600.00 which is only amount on his 1st deed. My attorney just informed me of an additional 2,100.00(an equity line of credit) that the original seller had with a different bank. Making the total needed to clear the title 25,700.
Our original option to purchase wont cover that amount. It was only 23,600. Its is going to take 25,700 to clear the title.
Anything’s possible, but not necessarily practical. Why offer to pay the seller’s lien? You do this deal and then end up owing the seller money? Really?
All three parties have to ‘win’ but they don’t all have to win the same thing. The seller wins debt relief. You win a finder’s fee. The buyer win’s a good price.
However, it all depends on the fact that you’ve actually found a good deal. This may be not be a good deal. What’s your time worth here? Maybe it’s worth your time to learn to not waste time on marginal deals? I don’t know.
Meantime, you can attempt to get the buyer to pay more. Likely ‘that’ deal will fall through, so it’s off to the next buyer, but at a higher price that includes the lien. It’s just that simple.
Or recognize that this isn’t a good enough deal to assign. Frankly, if there’s not a $2,100 margin on either side of this deal, it’s probably not worth shoe-horning to a closing. Just saying.
That all said, you need the experience of closing on even a bad deal. So, just take what you can get, and forget the rest.
NOTE: You might be working too hard on too little upside. For the future, set higher profit margins for yourself, so you’re not left trying to twist a minnow through the eye of a needle.
In the old days, before we knew better, we focused on smaller deals. We could have gone after bigger deals, but it’s a mindset thing. Once we discovered that the world’s axis wasn’t going to shift and flit us off the face of the globe, if we aimed higher, we also discovered that the percentages remain the same on both big deals and on small deals.
For example we can make 10% off a $30,000 deal, or $3,000. Or we can make 10% off a $300,000 deal, or $30,000. It takes roughly the same effort, negotiating skills, and time to make $30,000, as it does to make $3,000. So we rather stick with the $300,000+ deals.
Hope that helps. Make ‘this’ deal work, and then move up the food chain (and keep moving up).