There are two big concerns that most people have when preparing to sell their house: selling the property quickly and getting the most money on the home sale. Of course, it can be hard to learn how to sell your home fast, for a price that you’ll like. Even once you manage to find the right buyer for your home and get to the closing table, there are still some things that can stall your home sale — including having an active lien on your home. If you are wondering whether you can sell your house with a lien, you are not alone. There are many different types of property liens that can stop or slow your sale, which can be devastating if you thought that you were about to close the deal.
The good news is that you can sell your home in this situation — but you will likely need to deal with the lien before you can finalize the sale. If a potential buyer discovers an active lien on the home through a title search, it can quickly drive them away and leave you back at square 1. If you want to avoid this, then here are the steps that you can take to make selling a home with a lien against it go as smooth as possible:
1. Discover Any Liens
It’s very possible that you might have liens against your home that you don’t even know about. There are many different claimants that can levy liens on your house, often because they believe that you owe them money. Examples of common liens include mortgage liens, IRS liens, and liens held by craftspeople who have constructed your home or renovated parts of your house.
If you don’t put in your due diligence and discover active liens on your home (and the creditors who hold them), then you might be in for an unpleasant surprise when trying to close the deal on your property. So make sure you speak to your real estate agent about how you can discover any potential liens before you list the home.
2. Figure Out Whether the Liens Are Legitimate
It’s possible to have liens on your home that are not up-to-date and accurate. If you have settled up with the creditor, it is their responsibility to remove the lien to signify that your financial obligation has been fulfilled. However, it is possible that they will not do this, which can be a big shock when you run a title check on the home. This is another reason why it is so important to check on liens before putting your house up for sale — if there is a lien that has not been released, you’ll want to speak with the former creditor and make sure that they release it.
If you believe that the liens against your home are fraudulent or illegitimate, there are avenues to dispute the debt and have the lien released by official order. It’s better to try to solve the dispute outside of court if possible, but it’s vital that you know what your options are before you try to sell the home.
It’s a good idea to try to discover any liens and whether they are legitimate as quickly as possible. Maximizing your home sale price can depend on knowing the best time to sell your home — and you don’t want to miss your ideal window because you waited too long to deal with your liens.
3. Deal With Any Outstanding Liens
Although it’s possible to sell your home with active liens, there’s a high likelihood that potential buyers will be turned away by the risk. There are some liens, such as the one your home lender will levy with your mortgage, that are common and standard. But if you have unusual liens, there’s a higher chance that the home buyer will be unwilling to take on the lien and will find a different house to purchase.
With this in mind, it’s vital that you resolve any liens on your home before you sell it on the open market, in order to maximize your chances of a successful closing. There’s no singular way to deal with all active liens on your property — different types of liens will require different solutions. However, because they typically are assessed due to outstanding debts, the first step to take is to pay what you owe to the creditors. If the amount you owe is relatively small, such as outstanding fees to a contractor, then you can just pay the remaining balance and get the lien released. Just be sure to get a letter from the creditor detailing their intent to release the lien.
If the amount you owe is too large to cover out of pocket, you can try speaking to your real estate agent about the possibility of writing a clause into the closing agreement that uses part of the closing costs to pay your outstanding debt and release the lien. If the buyer is understanding, this could greatly reduce the risk to them and put their mind at ease.
There is a possibility that you will have a lien on your home that was assessed by government bodies, most commonly the Internal Revenue Service or the Department of Revenue. These tend to be related to tax concerns rather than simply HOA fees or other debts. If you discover that one of these liens has been placed on your home, then you might have bigger concerns than getting your home listed. In this instance, you should contact a CPA and attorney to see what your options are for getting the liens released.
Once you have gone through these steps, your home should be free of non-standard liens, and all that’s left to do is get it on the market and sold. You might be tempted to deal list the home before getting the liens released, but we would strongly advise against that. If you want to get the full amount of what your home is worth, it’s important to not let it sit on the market for too long. Having active liens on your home and listing it for too long both can both be disastrous for your leverage — and when you lose leverage, you are less likely to get a price that you want for your home.
The most important way to get the most out of your home sale is to work with a real estate agent that knows how to maximize value. At the Keri Shull Team, we specialize in helping homeowners sell their house faster, for a higher price, and with absolutely zero stress!
Thanks to our unique team structure, world-class marketing technology, strategy, and robust system of selling homes off-market, we are able to sell homes faster and for a better price! Our mission is to help you get out of your house — no matter what!
If you are interested in selling your home in Arlington VA, Alexandria VA, Washington DC, or anywhere else in the DMV, then make sure to work with the area’s top-selling team, the Keri Shull Team! Our expert agents are standing by to make sure you get the full amount of your home’s value, so contact us today! Just click here to schedule a time for a free, no-pressure Home Value Consultation with one of our experts!