Finding the right home for your family or for an investment can be a difficult process. Once you’ve found a property that checks off everything on your list, you hope everything goes off without a hitch, but that’s not always the case. If the title abstract search comes back with a tax lien on the property, you may worry that this means you need to move on and find a new home to buy. But that’s not always the case.
At Liberty Title in Minnesota, we offer title insurance and title abstracting services to help home buyers when issues like tax liens come up during the closing. Here’s what you need to know about tax liens and your property.
Understanding Property Taxes
Homeowners in the United States are expected to pay property taxes on their property. Those property taxes can vary based on state and local governments, and they usually go to fund local services including education, park systems, and first responders like fire departments.
Property taxes are owed on all homes even if the home is owned outright. If you pay a mortgage, your mortgage holder includes your taxes in your bill and then pays them. But once your mortgage is paid off, you are responsible for taking care of your taxes.
What is a Tax Lien?
If a homeowner has fallen behind on their property tax payments, it can add up over time. Eventually, the amount owed could end up costing the homeowner their property even if they own the home outright. A tax lien is a claim from the government against your property when you’ve failed to pay your tax debt.
This can be due to failure to pay property taxes, but it can also be due to other tax debt. When the title search is run before closing, the abstractor may discover that your home has a tax lien on it. You will not be able to purchase the home until the tax lien is cleared.
Title Insurance and a Tax Lien
Purchasing buyer’s title insurance will protect you in case of a tax lien down the road that may not have come up during the discovery period. That means rather than having to worry about hiring an attorney or paying off the tax lien, your title insurance company will take care of everything.
Title insurance also protects you from these title problems:
● Missed heirs
● Title errors
● Property description errors
● And more
Minnesota Buyer Title Insurance Protection
If you’re buying a home, the last thing you should have to worry about is problems with the title from a previous owner. At Liberty Title, we offer closing and title abstract services as well as title insurance for lenders and buyers. Whether you’re purchasing a home for your family to live in or you’re buying a home to flip, we can help you handle any problems that arise during the closing.
Don’t take a chance when it comes to such an important investment. Let us take you through the entire process and help you with a smooth closing. Purchase your title insurance by calling our title insurance agents at 763.494.0340, or contact us to learn more about how we protect home buyers.