A lien on your home can cause you stress in any situation. But when you’re getting ready to sell your house it can really push you over the edge.
Selling a house with a lien on it definitely makes the process more complicated. However, it doesn’t mean that you’re going to be unable to sell your house altogether.
Here’s what you need to know if you are selling your house and discover that you have a lien.
Understanding a property lien
A property lien is placed on your property when you owe someone and have unpaid debt. There are many different types of liens that could be on your property. Some of the people who may have placed a lien on your property include contractors when they have done work that they were not compensated for, an ex if you are not paying child support, local government for unpaid taxes, and even credit card companies.
This is one of the reasons why doing a title search is so important for home buyers. If this check isn’t completed they could purchase a house without ever knowing that there was a lien on the property. As soon as they purchase the property they become responsibility for the lien.
If you are getting ready to sell your house and have a lien on the property, it’s up to you to get it cleared. The process can slow how long it takes to close on your house, so it’s best to get started early.
How do I remove a lien?
To remove a lien, your first step is to find out who placed the lien on your house and how much it is for. The easiest way to remove a lien is to simply pay your unpaid debt.
However, there have been times when liens have been mistakenly placed on a property. If you find that the lien on your property shouldn’t be there, then you will need to contact the party that placed it and correct their error.
If you can’t afford to pay the entire amount that you owe you may be able to contact whoever you owe the money to in order to work out a deal. Contact them to see if they can remove the lien if you pay a portion of what you owe. Or, you can work with them on setting up a payment plan that will allow you to pay off the debt over time. You never know until you ask.
Can I still sell my house if it has a lien?
You can actually continue with the process of selling your house even if you have a lien on it. But, you will need to pay the lien out of the proceeds of your house sale.
This isn’t a problem if you have enough equity in your home. However, if you don’t have enough equity in your home you are still going to end up owing cash once your house is sold.
You can talk to the buyer to see if they are willing to take on the lien. This is an unlikely scenario, but in a hot seller’s market you may be able to find a buyer that is willing to do that in order to have you accept their offer.
