Closing with Seller

• Many tax lien contracts are considered closed when both parties, buyer and seller, sign the agreement for the sale. The terms are then binding and money exchanges hands. In a tax lien sale, this is often done because a seller has few other options than to sell a house with a tax lien on it. If the government is selling the tax lien itself, then the contract is closed when the buyer signs with the government representative and receives the tax lien instead of the title to the house.
  
  

Transfer of Property

• For most buyers, a tax lien sale is not truly closed until they receive the property itself. If an investor is buying a tax lien from the government, this can mean a waiting period. First comes a redemption period in which a seller can pay off the lien and reclaim the house. After that has passed, the buyer must use the lien to foreclosure. When the foreclosure is completed, the title will finally be transferred to the buyer and the contract can be considered to have closed successfully.
  
  

Ending Tax Lien

• From the government's point of view, a tax lien is settled when the property taxes have actually been paid off. This is one of the easiest ways to close a tax lien contract when selling the tax lien itself, because the buyer pays cash for the lien at the auction. By assuming responsibility for the lien, the buyer pays the property taxes and holds the lien personally. The government's debt, however, has been satisfied and the deal has been closed successfully.
  
  

Payment Arrangements

• If the house itself is switching hands because of late property taxes, the issue can become more complex. The seller may agree to pay property taxes -- but only by a date in the future when he has earned enough money. The buyer may agree to purchase the property as long as the taxes are paid by this set date.
  
  Details vary based on the contract, but the government can seek payment from the buyer, who by purchasing the property directly has assumed responsibility for the taxes as well. These cases can become complicated as each party seeks payment from another, but in the end the matter is closed when the terms of the contract have been met and the lien is satisfied.