Due to the popularity of our article, “Can You Sell A House With A Lien On It?” we decided to write a follow up article with more information.
How a Lien Works
Budgeting.thenest.com has some great suggestions on resolving liens. A lien is a filing against a property to secure repayment of an obligation. When you get a loan from a lender to finance property, the lender files a lien with the county clerk. This gives the lender the right to seize the property if you don’t pay the loan. Although a mortgage is the most common type of lien, there are variations such as tax liens for unpaid property taxes and mechanics lien for unpaid construction contracts. Liens have priority in the order of filing.
Removing the lien simplifies the sale process by providing the homeowner with a clear title.
Removing the Lien
First you must verify valid liens. Liens are filed in the county where the property is located. Look up the appropriate county’s website to see if it contains an online search function. Once you verify an existing lien, you need to satisfy it to sell your property. Contact the lien holder for a payoff figure. This is the total amount owed, including interest and other charges. Paying the debt is only the first half of the process. The lien holder must cancel the lien. This can take up to several months.
Completing the Sale
Once the title is clear, you are free to sell the property!
What if you can’t satisfy the lien on your property, but need to sell your house fast?
Traditionally, liens on any property are paid by a closing attorney who represents the seller based on the money that the buyers have purchased the property. Most of the time people will figure in the cost of the lien into the total purchase price of the property. The negative result of this is that the property value doesn’t quite match up to the amount being asked for purchase. And as such, many of these type of sales tend to take longer periods of time to find that perfect buyer who will pay more than the house is actually worth.
Consider working with a company that deals with as is properties: Research and find a company that handles as is properties and will help you reduce the liens and judgments of the sales. Believe it or not, there are a few reliable and trustworthy companies like this who will purchase homes and provide their owners with a quick and market-value sell of their property without collecting huge percentages of their profits.
When you’re in the position of having to sell a house with a lien, the best advice we can give is to look at all your options, never rush into it, and find the best option that will provide you a quick sell and minimize your financial losses. If you want more facts about how we help sellers who have liens on their homes, you can give our friendly staff a call at 713-574-0570 or visit our FAQ page to get more information.