Part of the excitement of moving is the opportunity to put down roots someplace fresh and avoid mortgage payments. Another perk is avoiding the associated closing and selling costs which can run hundreds of dollars or more.
However, selling a house with a mortgage is not as uncommon as you may think. Before you dive into the world of selling a house with a lien on it, you should have some basic understanding of what that means and how it works.
If you are considering selling your house while it is still under mortgage, keep reading to get the low-down on what you will need to know if can you sell a house with a lien on it.
What’s a Lien?
A lien is a legal claim made against a property when there is a debt attached to the asset. A lien can be publicly recorded and will need to be paid off before a house can be sold.
Typically, this debt is from taxes to utilities. Liens can be placed on a house by a creditor wanting to be compensated, and can also be placed if the seller has not yet paid off their mortgage.
What Are the Types of Liens on a Home
It is possible to sell a house with a lien on it, but it’s important to first understand the basics of what types of liens exist. There are several types of liens a home can have. These include state or federal tax liens, mechanics liens for unpaid labor or services, and judicial liens for unpaid judgments.
Property liens for unpaid mortgages or unpaid homeowner association dues are others. It’s important to determine which lien applies and how to resolve it before attempting to sell a house with a lien. Depending on the scope of the lien, the seller may need to make payments to the creditor or a third-party administrator.
Does a Lien Affect the Price of the House
Yes, a lien does affect the price of the house. A lien holder has the legal right to seize and sell the property if the debt remains unpaid. When a house has a lien against it, it affects how much buyers are willing to pay for it.
The primary reason for this is that the buyer wants to avoid the potential delay associated with liens. Furthermore, the buyer doesn’t want to assume responsibility for any outstanding debts that may remain after the purchase.
How to Sell a House With a Lien
You must contact the lienholder, typically a bank, and look into your payment options to do this. You may be able to negotiate a lower payment, or you may need to refinance the loan to pay off the lien. Once you have taken care of the lien, the next step is to list the house with a real estate professional and the local MLS.
Finally, you must negotiate a contract with a buyer and close on the sale. If you’re a cash property buyer, it is best to do research and get a realtor.
Knowing if Can You Sell a House With a Lien on It
In conclusion, it is possible to sell a house with a lien on it, but it is not an easy process. If you are thinking of selling a house with a lien, it is important to seek legal advice to ensure all steps are taken to ensure a successful sale. So don’t wait, contact a realtor and see how can you sell a house with a lien on it!
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