Dealing with debt can feel frustrating and scary. What if this debt is tied to your property? Fortunately, you can sell a house with a lien on it. Liens can vary widely from small overdue water bills to expensive mortgages. Depending on how much you will make in profit from the sale, you can still sell your house with liens tied to it. Ideally, as the seller, you will have enough equity in the home to pay off the liens at the close of escrow. Do sellers always pay the liens off themselves? Not always. Everything is negotiable, but typically sellers pay off liens on the property. Note: certain liens can prevent the sale of your home! It all depends.
Here is a complete real estate guide on how to sell your house with a lien on it.
How to Sell My House with a Lien on it
Selling a house with a lien on it is easier than you think. Once you find the right homebuyer, your final step is to calculate how much money you will make from the sale. This is also known as your net profit, which can be found on the HUD or seller net sheet. When trying to sell a house with liens on it, you will find all of the financial details regarding the sale on this sheet. For example, if you have to pay off your mortgage, that will be listed here. Once you see your bottom line from the sale, that will show all of the liens that are getting paid off from the sale of your home.
Types of Real Estate Liens
Liens on properties come in all different shapes and sizes. A mortgage is the most common lien and typically the largest in real estate. Mortgages are usually paid off by the seller with the funds from the sale. Other liens can include:
- Property tax lien
- Hospital bill lien
- Water bill lien
- Judgment lien
- Estate tax lien
- Mechanic’s lien
- Bail bond lien
- Municipal utility lien
You can sell your house with a lien on it by using the proceeds of the sale to pay off the debts. This is calculated by determining how much your property is worth and subtracting any debts or costs associated with it. Feel confident going into the sale of your property by running the numbers to calculate the total lien amounts. The title company that you plan to use will order payoffs from all the respective debtors that money is owed. If lien holder approval is needed, the title company should let you know. They will coordinate with the title company to have them take portions of the funds from the sale of your home to pay off each lien.
Who Will Buy My House With a Lien on it
Finding the right homebuyer is the secret to any successful home sale. The goal of trying to sell your house with a lien on it is to find someone who will pay the right amount. What is the right amount of money for your home? Ideally, you receive an offer from a buyer that allows you to at least break even. Coming out of pocket to pay off liens tied to your property is no fun.
Working with first-time homebuyers may be more challenging when trying to sell your home with a lien tied to it because they are looking for simplicity. These types of homebuyers don’t have much experience and it may also take a while for certain loans that they will use, such as an FHA loan, to get approved. They may be open to buying your property with liens tied to it but their loan may not get approved by their lender. Banks can cause delays during the home-selling process. Finding a credible homebuyer is important when preparing to sell your house with a lien on it.
Contact us for more information on how to sell your house fast with liens tied to it. Our goal is to help provide a fast and seamless experience of selling your home.