If you’re a homeowner looking to sell a home in North or South Carolina, you will want to make sure that there is nothing that could jeopardize the sale of your house, especially if you need to sell quickly.
Liens are some of the most notorious issues that can pop up unexpectedly when trying to sell your home. Some sellers aren’t even aware they have liens on their property until they’re uncovered last minute during the title search as the deal moves forward in the closing process. Sometimes, homeowners are already aware of the lien but lack the funds to pay it off and feel stuck.
When liens pop up unexpectedly, they can be very frustrating for both the seller and the buyer. A lien against the property can definitely have a severe impact on any pending or proposed real estate deal and at times may make the sale of the property fall through.
What is a lien?
What can I do to remove one?
Can I still sell my house?
A lien is a financial claim on a house or property that gives a party the authority to place a claim against an asset (in this case, your home) due to unpaid bills to secure the payment for the debt. Liens are obtained through a court process. Their main purpose is to prevent the sale of a property until the debt is paid in full. They can also be used to take ownership of the property to pay off the debt.
Sometimes finding out you have one isn’t as scary as it seems. In some cases, liens can just mean a slight delay in the sale of your property. The sale can still happen, but the lien is going to eat into the seller’s profits from the sale of their property. Sometimes, unfortunately, there isn’t enough equity in your home to cover the liens which can cause big issues.
Not sure if you have a lien against your property or just want to make sure there isn’t one, conduct a preliminary search on the property before listing it for sale. This way you will be prepared and able to take the steps needed to clear the lien or work with someone who can help.
There are several types of liens. Below are just some of the most common types we see to help provide you with an idea of what you can expect when listing your house when you find out you have a lien.
- Tax Lien – A tax lien is a government claim against assets, including a home. It happens when a homeowner is unable to pay their property taxes. These types of liens will take priority over all others if there are multiple liens against a property. Tax liens will halt a deal if the seller doesn’t have the funds to pay off the lien immediately.
The best way to find out if you have a tax lien to perform a preliminary search to find out if there is a tax lien attached to the title.
- Mortgage Lien – Also known as a property lien, lenders will place mortgage liens against homeowner property when the owner is behind on multiple mortgage payments. The bank uses the property as collateral so that it can get compensated in case the borrower fails to pay the loan.
- HOA Lien – If you’re a member of a homeowner association and you’ve fallen behind on your dues, the association may place a lien against your property.
Every state has different laws for the statute of limitations for a lien. Even if the lien expires, in most states, creditors can re-file the lien to extend it.
If you want to move, but have a lien on your house, you still have options. You can try and deal with them yourself. Without a doubt, liens can be a nightmare to anyone trying to clear them. It can be a very long, complicated, stressful, and financially and mentally draining process for those who try and handle it themselves.
Judgments from creditors are rarely set in stone. Smart lien-holders will always take something rather than nothing. Consider negotiating with your creditors. Know your rights before you contact them so you don’t give creditors more information than they need.
You can seek the services of a professional lawyer in North or South Carolina. They will work in conjunction with companies such as escrow to negotiate it down or have the title cleared.
Once the debt is paid or cleared, a Letter of Satisfaction is issued by the party that filed a lien against the property.
Another option is to sell the property “as is” when there is a lien or judgment against the property or seller.