Following

sushipup1 is right. It is only an issue if the sales price is lower than the total liens (including mortgage lien) on the property. According to your original post that's not an issue. Is the seller contesting the lien? Otherwise this is SOP - paying off all liens to deliver clear title.

I would not be worried about the lien, as it can be paid off at closing. But you need to find out if the mortgage company had already started the foreclosure process. If they had, then this could get in the way of your sale. And, if so, the seller and listing agent would have been required to disclose this fact up front.

It has been my experience, that once the foreclosure process has started, that banks will not stop it.

Wow, thank you for all of your comments. ncrealestateguy, the house was listed up front as a "notice of default opportunity". From my research I've gathered that her mortgage company issued the NOD in 2017 and there is an NOS that was issued in January 2018. I'm not sure if this means the foreclosure process has officially started or not. I'm assuming she is trying to get the home sold on the market before that happens. Denita, I am not aware that the seller is contesting the lien, but it was only disclosed to us on her counter offer, and all the line item said was "Electric solar system through the HERO program". It didn't ask us to do anything with it.

I would ask your agent to get clarification from the listing agent to see where in the process the lender is.

And you should be getting a preliminary title report which will spell out more details.