Can you sell a house with a lien?
This is a common question many homeowners may be wondering…
It’s possible to sell your home or property with a lien, but there may be a few challenges and roadblocks you must overcome to do so.
Having a lien is a legal claim on your property by either a creditor or an entity that the property owner owes money.
It’s important to understand there are different lien types, including involuntary liens (which most people want to avoid having) and voluntary liens, which is what your typical mortgage is…
If you want to sell your home with a lien, you have a few options available to you, and below, we’ll go over them.
- It’s possible to have a lien on a property and still sell it.
- A lien on your home can complicate the selling process.
- Your best option is to resolve and pay off the lien, if possible, before your home sale.
- Another option (assuming you have enough home equity) is to use the proceeds of the sale to pay to resolve the lien.
- Understand the different types of liens that can be placed on your property.
Can You Sell A House With A Lien?
In general, having a lien placed on a property can complicate the selling process more, but it’s entirely possible to sell a house with a lien. You can either remove a lien by paying the lien in full, or in some cases; you can use the proceeds of the sale to deal with the lien.
But keep in mind…
Sometimes, buyers may have a difficult time obtaining financing from a lender if there is a line on your house. In this case one option you may have is to sell to a real estate investor where they can purchase your home in cash instead of relying on traditional funding from a lender.
If you want to learn more about selling your home to an investor, check out this post on selling my house fast for cash in Las Vegas.
How To Sell A Home With A Lien on It
Below are the three strategies to sell your property if you have a lien on the property…
Resolve And Pay The Lien Up Front
If you have an unwanted lien on the property and want to avoid any issues or hiccups throughout the sales process, take a proactive approach and resolve the lien on the property before listing the home on the market.
This is great if you have the resources and funds to remove the lien on your house.
Once you pay the debt, you should get a release of lien (lien release document). This will clear the title on the property and ensure you have a very smooth process when your home is put on the market.
Consider Negotiating The Debt Owed
Another great option, if you don’t have the resources or funds to settle the debt that is owed from the lien, is to try and reach out to the lien holder to negotiate a lower amount. Working with someone who has negotiating experience, like a real estate attorney, can help increase your chances of a better agreement.
Negotiating your debt can allow you to continue with the sale of your home and avoid any issues when it comes to buyer financing.
Just Sell Your House With A Lien
There are a few cases where having a lien on your home can make it difficult to find a buyer or even cause problems with listing the home for sale together.
In this case, you might want to consider working with a cash home buyer or a real estate investor. These people will often buy homes as is, even with liens.
And working with a cash home buyer can be a great way to sell properties with liens. You can learn more about our We Buy Houses in Las Vegas program here if you want to sell your house for cash to an investor.
Involuntary Lien Vs Voluntary Property Lien
It’s a good idea to understand the differences between different types of liens. There are usually two types of liens people will get placed on a property. (1)
Involuntary liens: a lien that is typically placed without the consent of the homeowner. This can be from unpaid debts, tax liens, mechanic’s liens, or judgment liens.
Voluntary liens: This, on the other hand, is a lien on a house where the homeowner willingly entered into the agreement. Your mortgage is an example of this type of lien.
Understanding The Type Of Lien Your Property Might Have
When you sell the property, it’s important to understand the type of lien placed on your home.
Some liens can cause certain issues during the sale of your home…
below are the most common types of liens people will have on their home:
The most common is a mortgage lien. This is a voluntary lien against your property once the homeowner obtains a mortgage from the bank or lender.
It’s possible to sell a home with a mortgage lien, and it is actually a very common practice to do so. Especially if you have built a substantial amount of equity on your home or your property has increased in value over the years.
It’s common practice to pay the lien at closing with the proceeds from the sale of your home.
But keep in mind if you owe more than your home is worth, then you may need to come out of pocket for the remaining balance of the loan if you choose to sell at that time.
Property Tax Liens
This is a lien that is placed on your home or property when the homeowner fails to pay property taxes. In some cases, you may be required to resolve this lien and pay any unpaid taxes before the sale of your house can be completed.
It’s best to work with a real estate professional in order to ensure you have a successful sale of your home.
Another common type of lien is a judgment lien. This type of lien is usually filed by a creditor who was able to obtain a court judgment against the homeowner of the property for unsettled debt.
In most cases, you’ll want to work with a real estate attorney or professional in order to ensure you have a successful sale of your home.
Final Thoughts On How To Sell Your Home Or Property With A Lien
If you have a lien on your property and still want to sell, understand that it can be done, and you do have a few options to do so, as we’ve mentioned in this article.
The key to a smooth transaction is to understand the type of lien you are dealing with and check out the different options you have for resolving that lien before continuing with listing your home on the market.
You also have the option to sell your home with a cash home buyer.
But working with a real estate professional so you understand all your options and what you can do in your situation is the best bet. They can be helpful and guide you throughout this overwhelming process.
If you ever need a professional to talk to, don’t hesitate to contact us at the phone number above this page.