Can I sell a house with a lien on it?
It’s Nick with Sell My San Antonio House. If you got a property and you know it has a lien or liens on it and you’re worried about selling it because you know those liens are there, well, you probably don’t need to be because you can sell a property with a lien on it. It’s just that you need to get those liens cleared before you be able to get clear title to sell that property.
Why is there a lien on the property?
There’s a lien on the property because whoever put that lien there feels like the owners of that property owe them a certain sum of money. Most common type of lien is if you got a loan from a bank to buy your property, then that mortgage company or bank is going to put a lien on there saying you owe this much to them still for the property.
There are other types of liens like a federal tax lien. If you haven’t paid your income tax, then Uncle Sam can put a federal tax lien on there, something called a mechanic’s lien, which is most often used by contractors. If they feel like they’ve done some work and they haven’t been paid for that work, then they have the option to put a mechanic’s lien on the property. Also, there are things like child support liens, and there are several other things that could show up.
What do you need to do?
Here’s how the process goes. Say you came to me and you said, “Nick, we’d like you to buy our house.” We make an agreement. I will then take that agreement over to the title company that I’m going to buy your house and you want to sell your house to me. They’re going to do all their research. And what they’re looking for is different liens, judgments. We want to make sure that you’re the legal owner, but they’re going to find all that stuff that’s tied to the property or to the owners of the property and they’re going to have to get those things cleared off. In order to show clear title to the property.
Now, the people that put the liens, really just want the money that’s owed to them. So we need to contact them. If they’ve been paid, then we need to get them to sign a release of lien. Or, and say like the case with the mortgage company, maybe there’s a lot that’s owed. You still owe them $50,000, but you’re selling your house for $75,000. Well, what’ll happen is that $50,000 that is owed to them will goto the mortgage company at the time of sale and then you’ll get the proceeds of what’s leftover($25,000). Then they will sign a release.
Don’t be afraid that you can’t sell a house if you know you have liens on your property or if you say you recently inherited a property and you think there are some different liens and judgments on there. It can still be sold. You just need to walk through the process and make sure you get all the right releases signed.
A couple of special circumstances that do sometimes show up especially with inherited properties. If you’ve inherited a property and say there are two brothers and a sister, Joe, John, and Susie, and Joe and Susie don’t have any liens against them but John maybe has a child support lien. Then that’s also going to have to be cleared before anybody can sell the property. Sometimes you have to get a partial release.
There’s almost always a way to work through it. You just have to start the process. And it might take you a little bit longer than you’d like if they weren’t there, but you can absolutely still sell the property.
The other one is every once in a while, there’s a lien that’s so big that it’s worth more than the property is. That is going to take a little more time, but you can still sell it and get a release to sell the property and then send whatever is agreed upon as the proceeds to those folks. Sometimes it’s the whole amount, sometimes they’re willing to take a smaller portion. But don’t be scared. Don’t think you can’t sell a house just because you know there’s a lien or liens on it. I hope this helps. If there’s anything we can do for you, don’t hesitate to give us a shout at (210) 201-6644 or sellmysanantoniohouse.com. Thank you.