How To Sell A House With A Lien

selling a house with a lien

Having a lien on your house is not the end of the world if you are looking to sell. There are steps you can take to get top dollar for your property. All you need to do is to first decide how you want to handle the lien. Should you pay it off yourself? How about finding a buyer willing to take on the responsibility of getting the lien cleared? Before we answer those questions, it is imperative to figure out what a lien actually is and what kind of lien is on your house.

What is a lien?

A lien means a creditor has the legal right to sell your property to cover the balance of a loan if you fail to make your payments or default. In other words, the house in question was used as a kind of “insurance” that you as a borrower would be responsible and pay off the amount you borrowed. Although this doesn't sound too terrible, there are times when liens are brought against a property as a negative. This is why knowing the kind of lien placed on your property is crucial to how you will need to move forward with selling a house with a lien.

Determine the type of lien on your house

There are basically two different types of liens attached to properties. The first, and easiest to deal with, are voluntary liens. Sometimes borrowers are asked to use the property in question as collateral in order to secure a loan. The homeowner actually chose to put the lien on the house. These liens are less frowned upon in comparison to involuntary liens.

Involuntary liens are instruments used by another entity to use the homeowners property as collateral. There are three different types of involuntary liens: tax liens, judgement liens, and finally mechanical liens. Typically, these liens will need to be settled before you can sell your house, but there are ways around this. Once you've determined the kind of lien on your house, it's time to make some serious decisions about to how to proceed.

What steps should you take now?

There's no reason why you can't move forward with selling your house if it has a lien on it. It may prove more difficult, but once you've overcome certain hurdles, you should be able to sell your house quickly and get the price you want. Let's take a closer look at your options for selling a house that has a lien on it.

Clear the lien yourself

Once you've determined the type of lien on your house, you need to decide if you want to clear the lien yourself. This can be accomplished by simply paying off the debt held by the lien holder or lender. This process will typically add more time to the sale of your house, but having a property free and clear of liens will look a lot more attractive to a potential homebuyer. Once you have paid off the lien, it is just a matter of time before you can sell your house normally. If you do not have the cash or ability to deal with the lien, you will need to find someone who will buy your property with the lien attached and take the responsibility of getting it cleared.

Find a buyer willing to assume the lien

This may be advantageous to both the seller and the buyer. Since you must disclose any liens attached to the house you are selling, the buyer will know all the details of the lien. If they believe the property value exceeds that of the lien and they are willing to assume the lien, you can move forward with the sale. It is important that all of this is documented thoroughly as to avoid any future litigation from the purchaser. They need to sign off that they are willing to assume the lien on the property in question and that they are knowingly aware and of sound mind and body.

Follow the advice of a professional

Trying to sell a house with a lien comes with a large share of details and paperwork. Trying to navigate the process alone without help could lead to disaster. Using a real estate agent or company that specializes in this area will save you, the seller, time, money, and possible heartache due to the sale falling through. Speaking to a professional can help guarantee that you can sell your house with a lien and do so with no mistakes.

Don't throw in the towel!

How to sell a house with a lien all depends on your specific situation. Learning about or knowing that there is a lien on your house doesn't mean you shouldn't try to sell your property. There are options available, such as paying off the lien, securing a buyer willing to take on the responsibility, or even getting a solid all-cash deal from a we buy real estate cash buyer. You stand a better chance of selling your property to investors that buys houses for cash if you’re unable to payoff the lien. These types of home buying companies have a lot of experience dealing with properties that have all types of liens attached. Its important to keep in mind that cash buyers have the manpower, resources, and capital to do the heavy lifting to quickly get liens removed a lot faster than most homeowners. One thing to note is that, the cash offer that you will receive will typically be lower than if you were to sell the house with a realtor. On the positive side you get to sell the property quickly with the lien and you could potentially walk away with some cash at the closing. Depending on your specific situation, this article has provided you with multiple options of how to sell your house with a lien.