Lien Sale
Categories: Credit
See: Lien.
We’ve got a big day planned today. We’re packing up the family in the ol’ Subaru and we’re heading out to a lien sale in hopes we can get our mitts on a new house for cheap.
A “lien sale” is what happens after three other things have happened: (1) A lien is placed on a piece of property because the property’s owner owes a bunch of money (in this case, let’s say the IRS placed a lien on a house because the homeowner owed a ton in back taxes). (2) The property owner is unwilling or unable to pay what they owe. (3) The lienee (in this case, the IRS) seizes the property and decides to sell it.
Lien sales are often conducted via public auction. When something like a house or car is seized, the new owner can sell the asset to try and recoup some of what they’re owed. Oftentimes, they’ll sell it for less than it’s worth just to get it off their hands, which is where our family trip in the Subaru comes in. We’ll have to bid against other interested parties for the house, but chances are good that the winning bidder will still end up paying less for the place than its market value.