So, we signed today for our closing & are ready to record the transaction. The title company did a date down search before recording & found a brand new judgment filed against the seller for $3,500.

The seller apparently doesn't have the money to pay it. How will this affect the property title & my buyer? My buyer is not going to pay off the seller's judgment.

I don't understand why a personal judgment against the seller will affect the title. It's not a lien.

Any insight?

TIA!

Maybe not; but if it looks like a lien, and smells like a lien, and is located in the Land Records where the Title Company found it "attached" to the Subject Property . . . . then it still puts a Cloud on the Title just like a Lien.

Can your Buyer purchase Title Insurance with that Judgment on the property ? . . . . Probably not !

Can he finalize a Mortgage without Lender's Coverage Title Insurance ? . . . . Probably not.

The "attachment" is there to insure that the Seller pays off his debts BEFORE he leaves town. Someone must have been alerted to the fact that this Closing was coming up and they took the initiative to collect while they can still hold the property hostage as a bargaining tool.

PS: As a final option, you could always pay it off with part of the Commission . . . . hate to mention it; but it has worked when all else fails. We do a lot of strange things in this business to grease the skids.

Thanks Vermont. I appreciate the insight! My commission will barely be over $3,500 so I'm not going to grease the skids on this one.

Sounds like a lien to me. Your buyer is not going to get title insurance without it being cleared up, either paid or removed.

Will the seller pay? If not, seems like the seller's agent needs to step up and help handle it.

We just had this very same thing come up on two transactions, but luckily the judgements were found during our review of the preliminary title report.

Why, its not the sellers agent debt?

Make sure it is the sellers debt. Many times these blanket judgments are based on the name which can be the same, ie. John Smith and not the SS# etc.. I see it come up weekly at closings, the title company needs to follow up to make sure.
If the debt is the sellers, they can take out a loan to pay off the debt, or negotiate the amount down, maybe both agents can contribute a little?
Good luck to you and the seller.

Thanks everyone. Miraculously, the seller came up with the $ & paid it. We got a satisfaction of judgment signed off by the attorney who filed the original judgement. All is well! YAY!