It’s estimated that 62% of Americans sometimes struggle to make their mortgage payments on time. Failing to pay your mortgage or property taxes can have some serious repercussions for you and your family.
Specifically, the government or a creditor can put an involuntary lien on your home. This can make the possibility of selling the home much more difficult.
But what exactly is a lien? And can a house be sold with a lien on it? In this guide, we’ll answer these questions so you know all of your potential options when an involuntary lien is placed on your property.
What Is a Lien?
Before we learn more about whether or not you can sell a home with a lien on it we first need to understand exactly what it is. A lien is essentially a legal claim on your home.
This claim might be from an individual, like a creditor, or an entity like a bank. Liens can be broken down into two main categories: voluntary and involuntary.
A voluntary lien is one that you sign up and agree to. For example, a mortgage would fall under this category. To authorize the mortgage the lender will put a lien on it.
That way, if your property is foreclosed the individual with the lien will still get a portion of the sale for repayment purposes. The other type of lien is an involuntary lien.
This can happen if you’re part of the more than 40% of Americans who didn’t pay an income tax or property tax.
When this occurs the government can put a lien on your property that will remain there until you pay for it. Creditors and contractors might also seek judgment liens in court if you fail to make payments for loans and work.
Can a House Be Sold with a Lien on It?
The answer is yes, you can accomplish a house sale with a lien on it. This is especially easy if you have a voluntary lien like a mortgage.
In this situation, you’ll typically use the money from the sale to pay off the remaining balance on your mortgage. More often than not, you’ll even be able to make a profit.
But what happens if you have an involuntary lien on your home? Selling property with a lien that’s involuntary can be more complicated since the lien will need to be paid off.
This is especially tricky if you have a tax lien as there’s no real workaround for these options. If you don’t disclose this information to a buyer, they’ll likely walk away from the sale.
The good news is that you can still sell a home with an involuntary lien. The bad news is that it will likely eat into your bottom line.
What Are Your Options for Selling a House With a Lien?
You have options when it comes to selling a home with a lien. In this section, we’ll go over some of the steps to sell with lien.
However, we always recommend meeting with an attorney before pursuing any of these options. That way, you’re sure it’s the right decision for you.
Pay Off the Lien
The first option is to simply pay off the debt you owe that caused the lien. If you have the available funds to do this, it’s always the preferred option.
Unfortunately, most people with a lien on their house don’t have the means to do this. One option you might have is to get the buyer to help you pay off the lien.
The housing market still favors sellers currently, so you might be able to talk them into this if you have a good property in a favorable location. Just keep in mind that this will eat into any profit you make off the sale.
Negotiate the Lien or Dispute the Lien
Another option is to work with the lender to negotiate the amount on your lien down. Or, if you believe you were wrongly charged you can dispute the lien entirely.
Keep in mind that both of these options will require the help of an attorney who specializes in real estate lien resolution.
So if you can’t afford the legal costs you should consider a different option that doesn’t result in legal issues with lien sale.
Sell the Home for Cash
There’s no way to sell a house faster than with a cash-for-homes service. Many companies, like DBC Home Buyers, will purchase your home outright even if it has a lien attached to it.
Typically you’ll receive a cash offer from the company in under a day. Then, if it’s a good fit the home sale can be finished in less than ten days.
This is a great option if you inherited a house with a lien attached to it. It’s also worth considering if you need to move somewhere for a job quickly and don’t want to get bogged down by the selling process.
How to Find the Best Cash for Homes Service
When looking for a cash-for-home service you want to make sure that they treat you fairly. Many of the services take advantage of people in vulnerable positions.
The quickest way to do this is by checking their reviews.
If most of the clients seem happy with the service it’s a good sign that you can trust them. You also want to make sure that they can work fast. The best cash-for-home services can finalize the offer in under a week.
Need to Sell a Home With a Lien On It? Check Out DBC Home Buyers
We hope this guide helped you answer the question, Can a house be sold with a lien on it? As you can see, it is possible. However, you will likely need the help of a lawyer or a home buyer to help you.
Even if it’s successful it will be a difficult process. If you want to make the home selling process easy, your best bet is DBC Home Buyers.
Regardless of a lien, we’ll make you a cash offer on your home within days. So get started with the process today to get fast cash for your property.