Newsflash: 2 weeks to close, now LIENS

First time home buyer here! We just received our lender’s clear to close and are officially 2 weeks out from our closing date. Yesterday, we received a call from the title company, stating that due to multiple liens on the home, they are unable to clear the title at this time and we will be unable to close as planned. We knew of 3 liens on the property that the seller and title company agreed to pay at closing with funds from the sale. However, the 4th lien is for a child support judgment of 100k and we were completely unaware of this. The title company explained that all of the liens combined are far greater than the funds from the sale of the house will be able to cover, and the seller is unable to pay the remaining balance out of pocket. Due to this, title has spent the past month working with the seller and his attorney to get a “partial release” of the child support lien so that we can move forward with the sale. They are still in that process and there’s no telling how long it will take. Yesterday, our agent (who was also unaware of this 4th lien) had it out with the sellers agent, who stated that they didn’t tell us about the 4th lien because she and her seller thought it would be taken care of in plenty of time to close. The seller and his agent are now asking us to move closing until mid-June and have offered to cover the cost to extend our loan rate lock. Our agent says this is a breach of contract and we are well within our right to walk at this point. However, per our lender we’d have to start all over getting pre-approval for another home and start the mortgage application process all over again (another hard credit pull). If we walk, we’d get our earnest money back but we’d be out almost 2k for the option fee, appraisal, and inspection fees we’ve already paid. My partner and I are understandably pissed off and worried that extending closing to mid-June will only prolong the inevitable- seller can’t afford to fix this problem and we end up without the house anyway. It feels like that might be inevitable and maybe we should save ourselves the time and walk now. Any advice??

Read more at https://www.reddit.com/r/RealEstate/comments/1co1weh/2_weeks_to_close_now_liens/?utm_source=ifttt

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