Iowa Tax Sale Question

[John C]

When a property is acquired by tax sale, does that remove all leins?

Seller has  deed to the property and wants to sell as is/ where is. Iowa is abstract state and seller wants me to handle that cost.   I have heard around town there may be an IRS lein attached to the property. The seller said the act of tax sale/foreclosure wipes away all leins. Is this true or does a specific act need to take place?

Just wondering if I need to figure abstracting and title opinion into this?? Not a major expense really, also I just want to know for my own info.

Any other suggestions appreciated!!!

[Roy Oliphant]

@John C

I assume from your question that the seller acquired the property through a tax sale. Tax sales usually clear most commercial liens but very few government liens.  From IRS to city mowing, if the lien was originated by a government entity and it not specifically ad valorem it will probably survive the tax sale.

Due diligence is ALWAYS required.  Whether you obtain a title commitment or search the property records yourself should depend on your experience and risk tolerance.  But one or the other needs to be done or you are gambling not investing.

Also, recommend you understand the Iowa code as there may be an open redemption period.