No Situation Too Big
Experts at Big State have help homeowners with every type of financial problem. Bankruptcy, divorce, liens, we’ve seen it all. But one of the most common obstacles to selling one’s home is when there is a lien attached to it. So, can you sell your house if you have a lien on it? Of course. Here’s how we do it.
First, what is a lien? The purpose of a lien is to secure repayment of an obligation. When you take a loan from a lender to pay for your house, the lender files a lien against your property with the county clerk. If you do not pay back the loan, the lender can take away the house. There are liens for just about everything. Medicaid, child support, repairs. So the first thing you need to find out is: do you have a lien attached to your house, and what kind is it?
A common occurrence is some homeowners can have liens on their property without knowing. A creditor can file a lien against your home and are not required to inform you – so you may not know until your selling process begins. If you think you may have a lien, you can search your property on your county’s website. You can also call your county clerk’s office to identify existing liens. Finally, you may need a professional to pull title for you. When they pull title, they use what is called title resource data. A title plant is typically an office with professionals who search until they find title and everything that comes up against you personally, and against your home.
Once you’ve identified the type of lien you have, you’ll need to determine if you qualify for a homestead exemption. Texas has a long tradition of protecting the homestead of a family or single adult from forced sale for purposes of paying debts and judgments. So if your property is your homestead, there is a strong possibility that you can sell your house without paying your lien. Thanks to Texas laws, your Homestead will most likely provide protection. There are exceptions to this protection to look out for, and can included these cases:
- Purchase money
- Taxes (both ad valorem and federal tax liens against both spouses)
- Owelty of partition (divorce),
- Home equity loans
- Reverse mortgages
- Liens predating the establishment of homestead
- Refinance loans
A Special Story
We worked with a couple who had numerous liens against them that far exceeded the value of the home. They had a litany of troubles with their small business and went bankrupt. But they had a homestead on their property. Our in-house title experts were able remove the liens from against their property. The liens still existed; the couple still owed the money, but the partial release allowed them to sell the house without being required to settle the debt first.
Our Process Simplified
To begin, let’s explain the the protocol for that process. This is a tried and true process that we recommend:
- Request the lien release
- Send the notice
- File on record that you’ve sent the notice
- In about 30 days or later, if you do not receive a partial release, it’s automatically recognized as a partial release
- Weed cutting liens – these you just have to pay as well.
Types of Liens
A common question we receive is what if a property isn’t your homestead? How do you attain a partial release or get a lien partially lifted from your house so you can complete your sale? The key is negotiation. Big State is the only home buying company that offers custom solutions that many title companies or even attorneys can’t offer. We in-house title professionals that track down creditors and negotiate debt reduction on behalf of our customers. We deal with and resolve multiple title issues that include:
- Child support liens – It’s common that the person to whom the child support payments are owed will take partial payments and settlements. The key is negotiation.
- Mortgage lien – The proper course of action is to short sell your home.
- Tax loans – Paying the debt is required.
- HOA liens – HOA’s typically resist negotiating, but our experts will discover opportunities to influence negotiations.
- Weed cutting liens – Paying the debt is required.
- Home equity loans – Appeal to the creditor’s bottom line. Only the senior mortgage holder has first lien, right? So if someone has two mortgages, or a mortgage and a home equity loan, the second loan is the junior lien holder. So if they don’t lift the lien, the house is going to go into foreclosure by the first lien holder, and the second lien will get wiped out. That means it is simply in the creditor’s best interest to negotiate on their liens if it’s delinquent. You need someone who is good at negotiating to present an organized case with your HUD statement and all your other liens. For instance, let’s say you have a $44,000 mortgage loan on your property, and a $64,000 judgement against placed against your home. We would tell the creditor with the $44,000 mortgage, “Your mortgage is a junior lien to the $64,000 judgement. So why wouldn’t you negotiate a settlement in this case, to recoup some of your losses?” We make the creditor see that it is in their best interest. This technique requires someone who can intelligently speak to the creditor, because creditors are not the friendliest people to deal with. They’re bullies. You need someone like Big State on your team to haggle them down.
- Medicaid liens – Medicaid can apply your nursing home charges against your home, meaning that if your loved one passes away they’ll apply a Medicaid lien against the estate. When the heirs sell the house, Medicaid will want to be paid something. But they do negotiate, and we negotiate with them all the time.
- IRS – The IRS is not easy to negotiate with, but they will negotiate. For instance, we had a case where our client told us she owed the US government 2 million dollars, and she was selling her house to us for $100,000. 2 million dollars! It turns out her husband had committed Medicaid fraud, and he fled the country to Bermuda, and he was a wanted criminal. The wife stayed back, so she wasn’t found guilty. But now she was stuck with a $2 million debt against a $100,000 house. So what we did was, we made an offer to the feds: if they’d be willing to do a partial release of lien on the house, we would give them all the proceeds of the sale. Now, our client wasn’t thrilled to be receiving nothing for the house, but at least she escaped any further debt. So the lesson here is, if the lien exceeds the value of the home or the sales price, then you negotiate to make a partial payment. Because why wouldn’t a creditor take something rather than nothing?
We’re On Your Side
The takeaway: Selling your house with a lien is possible. Some liens can be difficult or need to be paid before the sale, but Big State can make the process, the paperwork, and the negotiations easier for you. Big State has a suite of services, complimentary to you, that attorneys charge thousands for and with no guarantee of help or resolution. We can buy your house, provide title resolution, and you can close in days, and not months. No other home buying company provides this suite of services. Big State has unique, custom options to help you sell your house for cash today. If you have a lien hanging on your back and need to sell your house, call us for a no obligation, hassle-free consultation. Remember: Homestead laws are your friend, and always appeal to a creditor’s’ self interest when you negotiate down a lien.
To get a no risk, free quote from your friends at Big State, call us at 713-574-0570 or fill out our Quick Offer form, and we will have a quote to you within 24 hours.