Let’s say that you are a homeowner and you are ready to sell your house. To your distress, your property has a lien on it. How will this affect the sale? Is it possible to sell your home at all? In this post, which concludes our two-part series on property liens, we will examine how liens can affect home sales and what homeowners can do if they are trying to sell a property that has a lien on it.
Selling a home that has a lien
Fortunately, having a lien on your home is not the end of the world. It will not necessarily ruin a home sale, but it can still have negative ramifications. Before a sale, the title company will search for any liens against the property; if it finds any, the sale will be temporarily suspended. Simply put, mortgage companies don’t want to finance a home that has a lien on it. Until you pay the lien, the sale will be on hold.
You do have the option to contest the lien. This process can be interminable, and while it may buy you some time to figure out how to deal with your debt, the sale may not go through until the lien is paid. If you refuse to pay the lien, the buyer can either back out of the sale with their deposit intact or they can accept responsibility for the lien themselves.
How to deal with a lien
There are a few steps to follow if the property you are selling has a lien:
1. First, find out whether the lien even belongs to you. It is possible that a family member with a similar name has actually incurred the lien.
2. If the lien does belong to you, resolve it as quickly as possible. Work with the lien holder to pay it off as quickly as possible.
3. Consulting an attorney is also a wise step. If you are having trouble with this thorny legal issue, an attorney may be able to help find a solution that is in your best interest.