It turns out that the seller had the half acre parcel as a part of a larger parcel with a mortgage on it. I believe that the broker knew this, but that's a different rant. The problem is that, even if they didn't know it, they should have. While it may be possible to apply the proceeds of the sale to free the parcel from the loan, it isn't something you negotiate with a lender with three weeks to closing. It could take more like three months, and still not be acceptable to the lender.
My buyer will be canceling the offer and getting earnest money refunded. Maybe there will be a new deal in the future, but not until the property is free and clear for resale. If the seller can't get the money together to buy it out of the loan, then possibly there can be some arrangement to have it happen as part of a closing, but it's tricky, as the lender wants to be protected, and my buyer isn't going to let funds go if there's not an immediate clear title.
It's just a good practice to ask sellers about liens. It could be something they've forgotten about, like a lien for repairs or remodel that involved a payment dispute. Or, there could be a tax lien hiding out there. If it's not a lot of money, it can be paid off prior to or at closing. But, as is the case many times, if the seller is strapped with little or no money coming out of closing, there could be a problem.
