A lien is a legal right or a claim a creditor has against assets or properties used as collateral to satisfy a debt. It is the right to take another person’s property to repay an unpaid mortgage or unfulfilled obligation.
A lien shows that there is a fundamental obligation to repay a loan owed; where this obligation is not discharged, the Lien empowers the creditor to legally seize such a house or property used as collateral to meet the requirement on the property.
The house becomes the Lien’s subject matter, and as such, you cannot sell that house without the consent of the creditor or lienholder. Once there is a lien on your home, it creates a cloud on the title of such a house. A diligent prospective buyer has the right to investigate how genuine your ownership of the house is, and since lien filings are public records, they can easily be detected.
Of course, hardly any buyer would love to buy a property with a lien against it, and so this begs the question of whether or not you can sell your house when there is a lien on it.
Selling your House with a Lien against it.
It is possible to sell your house with a lien against it; however, it is challenging as there are numerous financial and legal hurdles to overcome before you can proceed with your house’s sale. Again, these legal hurdles have to be resolved timorously too.
Here are some important steps to take to enable you to sell your house even when there’s a lien against it:
Investigate the Lien:
There are different types of Liens, and each Lien is unique. You can sometimes discuss with the lien holder and agree for a certain percentage of the amount owed to be paid.
You can also discuss with the lien holder to lift the Lien to enable you to sell your house and repay it. These options are not automatic. Sometimes, the lien-holder may decide not to budge until you pay him the amount owed or transfer ownership of it to him.
If you succeed at clearing the Lien, ensure that you collect a letter in writing that is duly executed as proof that the Lien has been cleared. In some circumstances, lien-holders forget to remove the Lien on the house even after receiving payment, and your letter will serve as a defense if such situations arise.
Dispute any Incorrect Lien:
After investigating the Lien and noticing that the Lien was incorrectly placed on the property, you should report to the lien-holder. Be sure to go with all the necessary financial documentation to authenticate your claim.
Where the lien holder refuses to release the Lien, you can hire an attorney to file a legal case in court for you. If you can prove your case in court, then the Lien would be released. If not, then you’ll return to the stage of settling with the lien holder.
Contact a Real Estate Expert:
If you could not get your Lien released and still want to sell your house on the open market, one option is to contact a real estate expert aware of the situation. Such a real estate expert will help you negotiate with the lien holder and help you acquire a partial or full release on the Lien.
Searching for a Real Estate expert to buy your house on a lien? We buy houses in Florida. Lien or otherwise.
Sell your house to an Investor:
If you cannot satisfy your loan requirement, you can sell to an investor who will take the house off your hands by buying it as-is (meaning the house won’t be repaired or improved before it is sold). The investor gives you a fair cash offer and takes the house off you, and you don’t have to bother about repaying the debt anymore.
Selling a house with a lien against it is a difficult job. Yet, it’s not impossible. Following the steps above would help you scale through this challenging task depending on how determined you are to achieve your aim.
To avoid issues of this sort, you may decide to use land trusts to protect your assets from legal action. Do not forget that we buy houses in Florida. Contact us today.
About the Author
Okonkwo Noble understands the need for sustainable travel. He is a foremost travel enthusiast, electrical electronic Engineer, and adventurer. He also volunteers as a part-time English teacher for Internally displaced children.
Bonus Material: Can I Sell a house in Colorado with a Lien on It?
Wondering if you can sell your Denver home with an existing lien?
The answer is yes. The caveat, the lien must be paid in full once the sale goes through. Typically, a title company will find out if you have a lien on your property during a house sale.
The team at Watson Buys is well known for working with the title company to ensure the lien does not slow down the process of getting your house sold. So, if you are selling property in Denver, Colorado, we want to buy your home and make it as simple as possible.
Find a house for us to buy, and when we close, we give you $1000 CASH.