Contracts
An Idaho purchase contract specifies that the buyer will receive the property 'free and clear of all liens.' If a lien is discovered at closing, the seller must:
ADeliver the property with the lien
BPay off or arrange to have the lien removed at or before closing✓ Correct
CGive the buyer a discount equal to the lien amount
DRequest IREC to resolve the lien
Explanation
If the purchase contract requires delivery free and clear of liens, the seller must satisfy all liens (or arrange for their payoff from closing proceeds) before or at closing. Failure to do so is a breach of contract.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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