A lien can complicate a house sale, making it difficult to move forward with closing the deal. An unpaid contractor, unpaid alimony, or taxes can halt a real estate transaction, putting a dent in your plans.
The good news is that you can still sell your house fast if a lien is on the property. You can work directly with a company that buys houses to sell your house as-is for cash. In some cases, the buyer may assume responsibility for the liens, giving you the flexibility to sell your property regardless of your situation.
What Is a Lien on a House?
A lien is a right or claim made by a lender or other party against a property. A lien on a property places certain limitations on what you can do with your house. In some cases, the lien may stipulate that you cannot sell your property until you satisfy the lien.
Examples of property liens include
- Mortgage lien
- Attachment lien
- Corporate franchise lien
- Contractor lien
- Judgment lien
- Estate tax lien
- Federal tax lien
- Vendor lien
How Does a Property Lien Work?
A creditor or lienholder gives public notice when placing a lien on a property. The creditor files and records the lien with the county clerk’s office in the same county as the property. The intent of the lien is to use the property as collateral if you do not pay the debt.
In some situations, liens are transferred to the buyer, such as when the property is bought through an auction or foreclosure. In these cases, the liens become the responsibility of the new buyer. Property liens can be negotiated for less than the amount owed because creditors usually feel that receiving something is better than nothing.
Can I Legally Sell a House with a Lien On It?
Yes. You can legally sell a house with a lien on it.
However, you will need to address all of the legal issues related to the property. For instance, you may need to work out an arrangement with a lender or lienholder before moving forward with a house sale. If you are going through foreclosure or bankruptcy, you may need to get approval from the court.
If you have outstanding debt associated with the house, the lienholder may agree to a sale if the proceeds pay the debt. Or you may be able to work out an arrangement if the buyer assumes responsibility for the lien after buying the house.
Resolving Lien Issues
Your house must have a clear title to sell a property. A clear title means that you have paid off all existing liens. You can clear the property liens by negotiating with the creditor or lienholder.
Simply obtain a lien release from the creditor and provide evidence that the existing lien has been removed and the creditor has given up its claim against the real property.
There are several ways you can resolve lien issues.
- Pay the lien and clear the title as quickly as possible to avoid having problems closing escrow.
- Use part of the equity in the property to pay off existing liens by having your escrow office include instructions to pay the lien as part of your settlement agreement.
- Hire an experienced attorney to dispute tax liens or negotiate a settlement with creditors, then ensure that a lien release is recorded.
How to Sell a House with a Property Lien
The best way to sell your house fast if there is a property lien is to sell your house as-is for cash to a company that buys houses. Instead of hiring a real estate agent and listing the house on the market, you can sell your house for cash directly to the buyer. You pay no closing costs, realtor commissions, or repairs.
In a cash sale, the buyer will often agree to purchase the house regardless of your situation and assume responsibility for any liens on the house. They can work with the lender, lienholder, or court to satisfy the lien. You can get out of the house or mortgage and walk away without strings attached.
Sell Your House Fast to We Buy Real Estate
If you have a lien against your house and can’t sell your house, contact We Buy Real Estate. We buy houses as-is. No repairs or upgrades. Call 502-458-2722 to get a guaranteed offer.