A deed sale parcel with a city demolition lien and what looks like a federal tax lien, and which one usually kills the deal.

Take an upcoming deed sale in a county where the construction side is easy to read. The parcel is a 1940s balloon frame house with an opening bid of $9,400, which is four years of taxes plus fees. From the street the roof sheathing is visibly gone over the rear addition and the porch is separating. A reasonable scope is $65k to $80k assuming the framing is salvageable, and comparable finished houses on that street run about $140k. The encumbrances are what cannot be resolved from the index alone. The city has a recorded nuisance abatement and demolition lien for about $18,400. There is also an entry that looks like a federal tax lien against the owner. In most states a tax deed wipes most private liens but municipal claims can survive, and the federal government has a redemption window after the sale, which means a buyer could sink money into stabilization and then be bought out at the purchase price plus a statutory rate. Three things a bidder would want settled before registering. Whether a demolition lien recorded by the city survives a tax deed in a state where the deed is issued by the county, since they are different taxing bodies. Whether title insurers in that state will write a policy on a tax deed at all before a quiet title action, and what a quiet title runs when the former owner is deceased and heirs are unlocated. Quotes range from $2,500 to $9k. Whether an open demolition order transfers as an obligation to the new owner, meaning the buyer is purchasing a countdown clock instead of a house. The answers vary by state and a bidder should pay a real estate attorney there to read the statutes first. The useful question for the room is which of these three usually turns out to be the deal killer, so the consult time goes where it matters.