Buying and selling homes is not most people’s idea of a good time. The process can be very difficult and stressful, especially for first-timers. Even with the help of a real estate agent, there is tons of hard work that goes into getting a house ready to sell. The challenge of selling a home becomes even more difficult if you need to sell a home with a lien.
There are some things that make selling your house even more difficult. Maybe there are structural issues within your home, or it’s in an undesirable neighborhood. A good real estate agent can help you navigate these types of issues. But there is one issue that can make your life really miserable when it comes to selling your home, and that is liens.
What Is A Lien and Do I Have One?
A lien is when someone else has a legal claim on your real estate, typically caused by some sort of debt. Basically, if you owe someone money, they can lay claim to a piece of your property or collect the money that you owe them when you sell your home. Sounds scary – but not all liens are bad. A common lien that nearly every homeowner has had at some point is a mortgage lien. If you borrowed money to purchase your home, the bank has a lien on that property until you finish paying off your mortgage.
There are many types of liens, and not all of them are created equally. Liens can be voluntary or involuntary, depending on whether you entered into the lien willingly. If the lien is only attached to your house, it’s a specific lien, whereas a general lien is attached to everything you own. Here are a few examples of less favorable liens you may have on your home:
- Judgment lien – put into place by a court
- Tax lien – when you fail to pay your taxes
- Mechanic lien – for unpaid workers
- Vendor’s lien – when a home buyer fails to make payments
- Bail bond lien – if you use your home as collateral to make bail
- HOA lien – when you don’t pay your fees or break any rules
- Water lien – unpaid water bills
Is It Hard To Sell My Home With a Lien?
Assuming you’ve kept up with your payments, a mortgage lien won’t have any effect on you selling your home. However, any other liens will come up during a title search, and most buyers will want nothing to do with homes that have liens. Buying a home is already a lengthy, difficult process. Trying to buy a home with a lien on it only makes things more complicated and confusing. The best game plan is to remove the lien before you start the selling process.
Not only do buyers get scared off by liens, but if you have a tax lien, lenders will not give a loan to a buyer to purchase your property. Tax liens take priority over other liens, including a mortgage lien, so the bank runs a big risk of not getting paid back.
How Can I Remove a Lien?
If the lien is valid, you will have to get the lienholder to remove it. Typically, the only way they’ll do this is for you to pay off your debt. Depending on who you owe and your relationship with them, you might convince them to remove the lien after negotiating some sort of payment plan. Once you have settled your debts, you will then need to file a release of lien form.
If you feel that the lien is not valid, you can hire an attorney to help you remove the lien. This is only an option if the lien was obtained through illegal means or some sort of error. You must have solid proof for a judge to be willing to remove the lien.
Paying your debts as soon as you can is definitely the best option for getting rid of the liens on your property.
Options For Selling Your Home With a Lien
If you cannot afford to pay off a lien, you can ask your real estate agent to negotiate it into your closing costs. Basically, you’ll be paying off your debt using some of the proceeds of the sale. This option only works if you can find a buyer who is willing to purchase a home with liens attached.
Depending on the type of lien, you may be able to substitute collateral. This can be tricky, however, as the new collateral will need to be of similar or greater value than your home. This would likely only be a valid option if you owned another home.
While selling a home with liens against it is technically possible, it is not an easy task. Each situation is completely unique and you will need the help of someone who can understand all of the legal and financial processes. There is no one size fits all solution to the problem. If you’re hoping to sell your home that has liens attached, you should consult a professional. Talk with a real estate agent or lawyer to discuss ways to work out your situation. Just keep in mind that you’ll like be facing lawyer fees or commission when you seek professional help.
How Can I Sell My Home With a Lien Today?
If you’re looking for an easy way out of a tricky situation, Property Pals USA has got you covered! Our goal is to take all the stress and expenses out of the home selling process. If the thought of navigating all the legalities of getting your liens released makes you sweat, you have come to the right place.
We buy hard-to-sell homes as-is, liens included. We will handle everything on our end so that you can feel a huge weight off your shoulders and move on with your life, no lien attached. We handle all of the legal fees and manage the process to resolve outstanding debts on your property.
Take the first step today and request a fair, cash offer on your home now!